How to design effective performance appraisal questions

How to design effective performance appraisal questions

Your employees are as engaged as the feedback they received regarding their performance. According to Gallup, teams that receive constructive feedback are 12.5% more productive and 14.9% less likely to leave the company. The statistics demonstrate how performance review is more important than ever in high-paced economies. 

Most employees feel engaged and motivated at workplaces when they receive regular performance feedback. Therefore, companies tend to benefit from implementing an effective performance review system. It allows business managers to streamline the performance review process and provide employees with growth opportunities in the organization.

One of the key factors to holding an effective performance review is designing the right performance appraisal questions. Doing so allows you to uncover actionable insights, increase productivity and ensure your employees are happier at work. 

However, every company has a unique blend of workforce personalities, and creating questions for performance review is a delicate process. This article will discuss different evaluation approaches that help you conduct effective performance reviews in your company. 

Set the performance appraisal goals 

Before we go into the intricate details of performance review questions, it’s essential to be clear about the goals of performance appraisals. 

Performance appraisal was never about putting your employees down with punishment, criticism, or a dispiriting affair. When done with the wrong intention, they become wasteful sessions that rob employees of every ounce of their motivation. Negative feedback and penalties are detrimental to personal and professional growth.

Instead, you’ll want to design the appraisals in a positive manner, and that means aligning them to the right goals. Start by asking how performance appraisals can add value to your employees and company. These are the right reasons to conduct performance reviews. 

Improve performance

You conduct performance appraisals to help your employees grow, both individually and as a team. Smart employees are open to constructive criticisms and recognitions where credits are due. Performance appraisal provides the opportunity for managers to help employees understand their weaknesses and strengths. 

Uncover problems

Performance reviews enable a conducive channel for employees to air their grievances which they usually keep to themselves. When left unaddressed, these problems might affect their productivity and relationship with co-workers. Therefore, allow employees to speak their minds during the appraisals. 

Goal alignment 

Some employees tend to lose motivation over time, and it’s perfectly normal. Regular performance reviews serve as a feedback loop that creates a purposeful environment and brings focused energy to the workplace. Leaders measure employees’ performance against the KPI and OKR frameworks with an effective appraisal system. The results help employees to remain aligned and motivated with the predetermined goals. 

Discover upskilling opportunities

Even seasoned professionals need to be competitive to adapt to fast-changing technologies. The performance appraisal process allows you to discover skill gaps amongst team members and address them accordingly. It gives you a better idea of whether signing up for training helps improve work performance. 

Improve communication

Visionary leaders know that building great relationships within the organization is key to sustainable growth. They use performance reviews as an opportunity to break down silos that separate employees and senior executives. Managers get to know each employee as unique persons and strengthen bonds during the appraisals. 

Determine performance appraisal criteria 

Performance criteria serve as a basis for evaluating employees objectively in the appraisals. It promotes fairness, objectivity, and uniformity when appraising employees irrespective of their job scope, position, and business units. We recommend the following considerations when creating the appraisal criteria.

Quantitative vs. qualitative evaluation 

Quantitative means evaluating employees' performance through measurable metrics. For example, how many orders did the sales personnel bring in a month? Meanwhile, qualitative is subjective assessment through observations, interviews, and feedback. Both are equally valuable criteria that help managers gain a complete view of an employee's performance.

For example, you hold appraisals for the sales team to evaluate if their performance is aligned with the company's direction. During the assessment, you receive qualitative feedback through questionnaires, such as the orders, returns, and complaints. These are metrics that allow you to have an objective understanding of how they fare in their job.

However, you'll need a qualitative evaluation to find out if your sales team is connected to the company's values. Subjective evaluation methods like 360-degree feedback provide a balanced overview of how an employee interacts with co-workers. These methods help build a stronger company's culture, improve internal communication and reduce psychological insecurity. 

Vertical vs. horizontal appraisal criteria  

There are two ways to set up questions for a performance evaluation form — vertical and horizontal. Both approaches allow you to gain a different perspective of an employee during the appraisal. 

A vertical appraisal involves setting in-depth criteria related to an employee's job scope. This means you'll need a superior or supervisor with sufficient knowledge about the workflow to set the questions. For example, you can't have an HR manager set vertical criteria for an app developer's assessment. This is because only the software team lead or senior developer knows about the finer details of the developer's job. 

The horizontal approach is an evaluation with a broader scope and is relevant across different organizational divisions. To create horizontal appraisal criteria, you'll need to set up a team of different business unit managers. For example, the engineering manager creates a skill map and aligns them with those done by managers from other departments. They use the same criteria to evaluate employees fairly in their respective departments. 

Create precise criteria

Regardless of the approach, it's essential to ensure the appraisal criteria aren't ambiguous. The managers should have clarity on what is being measured during the interview or in the questionnaire. 

These are good examples of clear and concise criteria. 

  • The maximum amount of reported bugs/monthly
  • Number of projects delivered/annually
  • Number of closed deals/monthly

Avoid vague or open-ended criteria like

  • How well does the engineer perform?
  • How responsive are the customer support personnel? 

Build a scalable performance appraisal process

As a company grows, so does the need for performance review across multiple departments. While supervisors are aware of their team member’s performance, it is not feasible to rely on their manual assessment. Supervisors have to deal with tremendous workloads and may miss crucial performance indicators. 

As the business expands, you’ll need standardized, predetermined appraisal criteria to scale performance appraisal. They ensure that all employees are evaluated fairly. Creating predetermined criteria also rules out emotional bias amongst employees during the evaluation. It also allows HR to plan the review cycles without worrying about appraisal bottlenecks. 

Companies use the predetermined criteria with performance review examples and templates to build an effective appraisal system. They leverage software tools that allow managers to streamline criteria, create questions and gain performance data from various sources. This helps managers avoid the tedious work of rewriting the appraisal criteria. 

For example, BetterMe uses Plai to coordinate performance reviews on a single platform to support its growth. 

Use different question types

Creating powerful questions to ask in your performance review allows you to understand the employee’s performance, behavior, and motivation. There are two different types of questions to help you do that.

High-level questions

These are more generic and suitable questions when you’re conducting a performance review for the first time. You don’t require specific knowledge or skill set to create these questions. 

For example:

  1. To what degree [employee’s] level of technical skills and expertise meets your expectations?
    - Exceptional
    - Exceeds expectation
    - Meets expectations
    - Below expectations
    - Unsatisfactory
  2. To what degree [employee] level of ownership, communication, and engagement with other team members meet your expectations?
    - Exceptional
    - Exceeds expectation
    - Meets expectations
    - Below expectations
    - Unsatisfactory
  3. What should [employee] continue doing and/or start to do differently?
  4. If you could give [employee] constructive advice to make him/her more effective in his/her role, what would you say?

Deep-level questions

These highly-specific questions extensively evaluate an employee’s technical ability, skills, and experience. They help you to uncover new knowledge of the employee. To create deep-level questions, you’ll need to put together a committee of supervisors that are well-versed in the subject matter.  

Examples of deep-level questions:

  • How would you rate [employee]’s skill in performing [skill name] from 0 to 5. 
  • Name 2-3 technical skills that might help [employee] in their job. 

Consider asking open-ended questions to develop a better understanding of the employee. For example, ‘what else can you tell us about this person?’ 

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Plan the review cycles  

Most organizations start by holding performance reviews once and twice a year. These frequencies allow managers to have a general understanding of their employee’s performance and skills. 

However, employees have stated that increasing the frequency of appraisals helps improve work performance. This calls for the use of planned questions to speed up the appraisal process. By shortening the review cycle to monthly, employees get quicker feedback on what can be improved compared to the previous month. 

While monthly appraisals benefit both the company and employees, the implementation is tedious. Manually preparing and conducting the reviews can take more than 30 hours each month. Thankfully, managers turn to a user-friendly performance review tool to ease the burden. 

Armed with an intuitive performance review software, managers can manage employee profiles, plan 1-to-1 interviews, monitor progress, and analyze results more frequently. They let technologies do the heavy lifting and spend more time helping their employees grow professionally. 

Summary 

We hope we’ve given you valuable tips in creating appraisal questions. They support the performance appraisal process, which includes determining performance standards, gathering information, and analyzing results. Take a flexible approach by using high-level or deep-level questions, whichever fits your situation.

Also, don’t forget to automate the appraisal process with HR performance reviews software. It saves time and allows you to scale performance reviews with your business’s growth.

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