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Performance Management Case Study: Fossil Group

Jocelyn Stange

February 4, 2021 | 2 minute read

In this blog, we'll share how Fossil Group evolved its performance management process and 3 simple steps.

The Evolution of Fossil's Performance Management Process

Fossil Group was using a complex, 100% paper process for performance reviews and check-ins for more than 15,000 global employees. They wanted to move toward a digital performance management strategy, but knew they needed to simplify the process first.

Fossil Group set up four traditional components that were stretched across three strategic touch points throughout the year. These touch points were supplemented with ongoing performance conversations that could be initiated by any employee, at any time.

As Fossil Group evolved its company-wide performance appro a ch , they were happy to see immediate progress.

92% of employees were participating in goal-setting reviews, setting an average of six goals per employee.

However, when they dug into the data, they found that 35% of individual goals created were misaligned or did not have an impact on the organization and its strategic priorities. They knew they needed to get better at goal alignment if they wanted to meet important business objectives.

Explore the three ways Fossil Group simplified performance management.

1. They scheduled ongoing performance conversations and continuous feedback.

Although the three formal performance touch points in place were working, Fossil Group knew teams needed to have goal conversations more frequently. They implemented informal “check-ins” that could be launched by any employee at any time.

To ensure  adequate time was made for important performance conversations and other performance related activities, Fossil Group implemented "Performance Days" — days strictly dedicated to employee performance. On these days, n o task-related meetings are scheduled, and all work is set aside for the day. Conversations between managers, employees, and teams are all centered on performance.

2. They created intuitive goal conversation templates.

Fossil Group recognized that simply having more performance conversations wasn’t enough — the conversations needed to include healthy dialogue, debate, and collaboration from managers and employees. They created 1-on-1 templates to help guide managers and employees through an effective and productive goal conversation.

Check-in templates could be customized to the needs and work of individual teams and team members. The templates helped ensure conversations were focused on creating clear, aligned, and motivating goals. 

3. They used recognition to keep performance conversations fresh.

Fossil Group wanted to bring performance conversations full circle by recognizing employee performance daily. They created recognition toolkits for managers including fun notecards, gift cards, and employee recognition tips. They  also  launched an online, peer-to-peer recognition program that generated an average of 140 recognition stories each week.

By  taking time to uncover the needs of its employees, and delegating time for managers to focus on perf ormance,  Fossil Group  was able to listen and act on employee voices and evolve their performance strategy f or  succes s .

Download our latest ebook: Making Time for Performance Management to get more tips for simplifying your performance management process.

Published February 4, 2021 | Written By Jocelyn Stange

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Performance Management Case Studies: Revolutionaries and Trail Blazers

Five com­pa­nies that have led the way in set­ting new per­for­mance man­age­ment trends

Note: This blog post was updat­ed in July 2019 for accuracy.

Per­for­mance man­age­ment is an ever-evolv­ing field. The more we learn, the bet­ter we can adapt our per­for­mance man­age­ment sys­tems to make our com­pa­nies health­i­er, more moti­va­tion­al places to work. This is why it is so impor­tant to keep up with the lat­est per­for­mance man­age­ment trends . Com­pa­nies who fall behind lose out to their com­peti­tors. They also run the risk of los­ing their best per­form­ers along the way.

Since 2012 , com­pa­nies all over the world have been mov­ing away from old-fash­ioned annu­al appraisals and towards con­tin­u­ous per­for­mance man­age­ment . More than ever before, human resources exec­u­tives and line man­agers alike under­stand the human need for reg­u­lar feed­back, effec­tive coach­ing and human interaction.

A num­ber of rev­o­lu­tion­ary com­pa­nies have led the way in dra­mat­ic changes to how organ­i­sa­tions — both For­tune 500 multi­na­tion­als and SMEs — con­duct their per­for­mance reviews and moti­vate their employ­ees. In their wake, com­pa­nies the world over are adapt­ing their per­for­mance man­age­ment prac­tices and read­just­ing their once-fir­m­­ly held beliefs regard­ing per­for­mance rat­ings and annu­al per­for­mance appraisals. Here at Clear Review, we have helped over 200 organ­i­sa­tions effort­less­ly shift away from tra­di­tion­al annu­al appraisals.

Below, we have col­lat­ed five notable per­for­mance man­age­ment case stud­ies. These organ­i­sa­tions have shak­en up their exist­ing process­es and have reaped sig­nif­i­cant ben­e­fits in terms of pro­duc­tiv­i­ty, employ­ee engage­ment, morale and performance.

1 . Adobe Intro­duced Con­tin­u­ous per­for­mance Man­age­ment in Place of Per­for­mance Appraisals

Adobe was the fore­run­ner of change when they aban­doned annu­al per­for­mance appraisals back in 2012 . They felt that while they were forg­ing ahead and evolv­ing as a com­pa­ny, their per­for­mance man­age­ment sys­tem was archa­ic and inef­fec­tive. It was a waste of time and had, ulti­mate­ly become a box-tick­ing exer­cise. Adobe esti­mat­ed annu­al appraisals con­sumed 80 , 000 man­age­ment hours each year . This was the equiv­a­lent of near­ly forty full-time employ­ees work­ing year-round. Clear­ly, a change was needed.

Adobe replaced annu­al appraisals with reg­u­lar one-on-one check-ins , sup­port­ed by fre­quent feed­back  — both pos­i­tive and con­struc­tive. There are no per­for­mance rat­ings or rank­ings and they allow dif­fer­ent parts of the organ­i­sa­tion to deter­mine how fre­quent­ly they should hold check-in con­ver­sa­tions, based on their work cycles. Now that forced rank­ing has been abol­ished, employ­ees at Adobe are assessed based on how well they meet their goals . Man­agers are also trained on the nuances of giv­ing and receiv­ing feedback.

The result has been a marked increase in employ­ee engage­ment, with vol­un­tary turnover decreas­ing by 30 % since check-ins were intro­duced. This makes Adobe a per­for­mance man­age­ment case study we should all be aware of.

Take a Tour of Our Con­tin­u­ous Per­for­mance Man­age­ment Soft­ware .

2 . Deloitte Saved 2  Mil­lion Work­ing Hours per Year with Week­ly Employ­ee Check-Ins

In 2015 , Deloitte was the first big name to announce it was scrap­ping once-a-year per­for­mance reviews, 360 -degree feed­back and objec­tive cas­cad­ing. This change occurred after the com­pa­ny cal­cu­lat­ed these process­es were con­sum­ing a remark­able two mil­lion hours a year across the organisation.

Deloitte’s new per­for­mance man­age­ment process requires every team leader to check in with each team mem­ber once a week to dis­cuss near-term SMART goals and pri­or­i­ties, com­ment on recent work and pro­vide coach­ing. The check-ins are ini­ti­at­ed by the team mem­bers, rather than the team lead­ers to ensure these check-ins take place fre­quent­ly. This also serves to give employ­ees a sense of own­er­ship over their work, role and time.

These week­ly employ­ee check-ins are sup­port­ed by quar­ter­ly reviews when team lead­ers are asked to respond to four future-focused state­ments about each team mem­ber. Rather than ask­ing team lead­ers what they think of the team mem­ber — which is what tra­di­tion­al per­for­mance rat­ings do — they ask what the team leader would do with the team member.

3 . Gen­er­al Elec­tric ( GE ) Put an End to​Forced Rank­ing per­for­mance Management

Under the reign of its for­mer CEO , Jack Welsh, Gen­er­al Elec­tric was the most well-known pro­po­nent of annu­al per­for­mance rat­ings and forced dis­tri­b­u­tion curves. 

For decades, GE oper­at­ed a ​ “ rank and yank ” sys­tem, where­by employ­ees were appraised and rat­ed once a year. After­wards, the bot­tom 10 % were fired. Not exact­ly a recipe for employ­ee engage­ment! Such an envi­ron­ment is a breed­ing ground for unhealthy com­pe­ti­tion, reduced team­work and employ­ee burnout.

In 2015 , under CEO Jeff Immelt, GE announced it was replac­ing this approach with fre­quent feed­back and reg­u­lar con­ver­sa­tions called​” touch­points ” to review progress against agreed near-term goals. This new approach was sup­port­ed by an online and mobile app, sim­i­lar to our own Clear Review per­for­mance man­age­ment tool , which enables employ­ees to cap­ture progress against their goals, give their peers feed­back and also request feedback.

Man­agers will still have an annu­al sum­ma­ry with employ­ees, look­ing back at the year and set­ting goals. But this con­ver­sa­tion is more about stand­ing back and dis­cussing achieve­ments and learn­ings, and much less fraught than annu­al reviews.

4 . Accen­ture Aban­doned Rat­ings for per­for­mance Development

As of Sep­tem­ber 2015 , Accen­ture, one of the largest com­pa­nies in the world, dis­band­ed its for­mer rank­ing and once-a-year eval­u­a­tion process . Like GE , Accen­ture has decid­ed to put fre­quent feed­back and con­ver­sa­tions at the heart of its new process and focus on per­for­mance devel­op­ment, rather than per­for­mance rating.

As Accenture’s CEO , Pierre Nan­terme, stat­ed at the time ​ “ It’s huge, we’re going to get rid of prob­a­bly 90 per cent of what we did in the past.”

As Ellyn Shook, Chief HR Offi­cer at Accen­ture , stat­ed:​“Rather than tak­ing a ret­ro­spec­tive view, our peo­ple will engage in future-focused con­ver­sa­tions about their aspi­ra­tions, lead­ing to actions to help them grow and progress their careers.”

5 . Cargill Intro­duced Coach­ing Con­ver­sa­tions in Place of Annu­al Appraisals

Like Adobe, Cargill, the US food pro­duc­er and dis­trib­u­tor, start­ed to trans­form its tra­di­tion­al per­for­mance man­age­ment process­es back in 2012 , when it intro­duced ​ “ Every­day Per­for­mance Man­age­ment ”.

Cargill removed per­for­mance rat­ings and annu­al review forms and instead focused on man­agers hav­ing fre­quent, on-the-job con­ver­sa­tions and giv­ing reg­u­lar, con­struc­tive feed­back. They have made this work by:

• Reg­u­lar­ly reward­ing and recog­nis­ing man­agers who demon­strate good day-to-day per­for­mance man­age­ment practices.
• Shar­ing the expe­ri­ences and tips of their suc­cess­ful managers.
• Hold­ing teams account­able for prac­tis­ing day-to-day per­for­mance management.
• Build­ing the skills need­ed to suc­ceed at Every­day Per­for­mance Man­age­ment, includ­ing effec­tive two-way com­mu­ni­ca­tion, giv­ing feed­back, and coaching.

The out­come has been impres­sive, with 70 % of Cargill employ­ees now say­ing they feel val­ued as a result of their ongo­ing per­for­mance dis­cus­sions with their manager.

Per­for­mance Man­age­ment Lessons to Be Learned from These Per­for­mance Man­age­ment Case Studies

When we look at what these five organ­i­sa­tions have imple­ment­ed, we can see some evi­dent trends emerg­ing, which are like­ly to form the basis of per­for­mance man­age­ment for the years to come. These trends are:

• Reg­u­lar one-to-one per­for­mance con­ver­sa­tions, or ​ “ check-ins ”, ini­ti­at­ed by the employee.
• Fre­quent, in-the-moment, pos­i­tive and con­struc­tive feed­back from peers and man­agers Near-term objec­tives rather than annu­al objec­tives. Set­ting and review­ing objec­tives reg­u­lar­ly, rather than once a year.
• For­ward-look­ing per­for­mance reviews, focus­ing more on devel­op­ment and coach­ing and less on assessment.
• Drop­ping per­for­mance rat­ings .
• Per­for­mance process­es sup­port­ed by mobile-friend­­ly, online per­for­mance man­age­ment soft­ware .

Move away from annu­al appraisals to con­tin­u­ous per­for­mance management

Find out how our sim­ple, effec­tive per­for­mance man­age­ment soft­ware can help you move away from annu­al per­for­mance appraisals towards a more agile, intu­itive per­for­mance man­age­ment sys­tem. Book a free demo of Clear Review where our expert team will take you through the platform. 

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Case studies: FedEx and HSBC's revamped performance management approaches

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Eric Tan, Managing Director, FedEx Singapore, and Vishesh Dimri, Lead - HR Consulting, HSBC, both place importance on trust, honesty, transparency, and ownership in their approaches, as we find out in these interviews.

Fedex singapore’s new management system drives trust & transparency.

Eric Tan, Managing Director, FedEx Singapore, shares insights into this performance review approach — from its inception, to what it entails, along with what employers could consider in the intended shift to such a model.

Delivery service provider FedEx Singapore (FedEx) is a keen advocate of a culture of continued engagement and transparency at its workplace, one where open communication and trust thrive amongst its over 1,000 employees.

This is done through a series of engagement initiatives such as its ‘Open Door Policy’ and ‘Survey Feedback Action’ (SFA), says Eric Tan, Managing Director, FedEx Singapore (pictured above, left) . “This allows our employees to understand the big picture and the part they play in the success of the organisation. FedEx lives up to our corporate philosophy of ‘people-service-profit’: By taking care of our people, they will provide outstanding service for our customers, which enables business growth, and we reinvest this revenue back into our people. All programmes and policies, at every organisational level, synchronise with this philosophy,” he affirms.

One way the company has been driving this is through a change in its performance management system — from a conventional performance appraisal system that utilised a comparative 10-point rating scale leveraging the bell curve methodology, to an enhanced performance review structure, which focuses on the work that employees accomplish (goals), and how it is accomplished (competencies).

Tan explains: “As a ‘people’ company, FedEx strives to continuously improve its performance management processes to drive individual, team, and organisational performance. To achieve this, we assume a holistic approach towards performance management and the employee experience. With a continuous improvement mindset, FedEx across Asia Pacific proactively anticipates process and technological enhancements so as to enable us to successfully transition into a new performance management process.

"These are all part of our concerted efforts to sustain a workplace culture where our people stand at the centre of our corporate philosophy."

What this enhanced performance review structure entails

According to Tan, this enhanced structure is designed to provide an in-depth understanding of what success looks like for the employee. It adopts an absolute rating scale to evaluate employee performance, based on the ratings of “Exceeded Expectations”, “Met Expectations”, and “Did Not Meet Expectations”.

Competencies refer to observable behaviours that an employee exhibits in their role when applying their knowledge, skills and abilities. To ensure these competencies are applicable to employees’ job roles, varying competency models for frontline employees, professionals and managers have been built for their individual application. To illustrate:

• Frontline employees are customer-centric and team-focused. Hence, the focus for them is to adapt to changes and communicate well to both internal and external customers.
• For professionals, having a business thinking mindset is imperative, so they need to build on their analytical skills and make timely decisions and recommendations.
• As for managers, it is critical for them to be equipped with the ability to lead, influence, inspire, and serve, as well as to cultivate exceptional team performance while ensuring their team members are valued and empowered in their day-to-day responsibilities.

No doubt, this change involved several key considerations, with the most impactful one being to instil a growth mindset that encourages employees to focus on future performance as opposed to reflecting on past performance.

It also came with its own set of challenges, with the main one being to manage this change as well as facilitate it. To address this, the HR team developed a collective approach to help prepare and support all employees through the transformation, ensuring a seamless process from start to end.

The employees responded “very well”, as a result. Tan notes: "We focused on employee engagement and concentrated our efforts on fostering genuine commitment between the manager and employee as we recognise the value in supporting our employees in their learning journeys as they develop and grow professionally. We believe this will, in turn, result in higher levels of productivity by our team members."

Overall, this new system goes hand-in-hand both with FedEx’s rewards framework, and career development framework. Tan highlights: “Building a performance-based work culture not only serves to boost employee morale, productivity, and performance, but also prepares the company for strategic workforce planning. It is especially pivotal for us as industry leaders to look at a blend of individual and organisational components to instil a growth culture for our people to be successful.

"Every employee is given the chance to pursue their dream in FedEx, and support is always readily available to help maximise their potential, through training and development platforms accessible to all."

Words of advice

Like Tan and his team, more leaders are shifting away from “quantitative” rating scales, to a more “qualitative” approach to appraisals. Yet, there are still leaders who prefer the former approach. And as Tan points out, there is no perfect structure to follow, as every approach comes with its unique pros and cons.

Thus, he says, it is more important to look at the direction the organisation is headed and adapt a model that works best for both the employees and the organisation at each stage. "The goal is to move all stakeholders, including employees, in a concerted manner toward our collective goal that serves people growth and business profitability."

At FedEx, this also means that apart from working closely with key stakeholders including but not limited to HR and senior management teams, the management is well supported in performance, development, and management skillsets through avid training programmes.

This encompasses effecting a mindset change by shifting from system-related work to providing resources and tools, to empower managers to conduct effective and meaningful performance & development conversations, build manager-employee relationships, and consistently engage their team members by leveraging coaching and feedback skillsets.

Reflecting on the company’s experience, Tan shares his words of encouragement for employers intending to improve their own performance management processes. "Performance is an ongoing journey, and we need to recognise the importance of continuously looking at improving the overarching employee experience by encouraging ongoing learning and communication rigorously and regularly. In any scenario – whether personal or professional – one should not stop learning, developing and upskilling to make the most of their talents and grow on the right trajectory, thereby bringing value to their teams and peers.

"Human performance is the function of many influences: accountability, feedback, motivation, skills and knowledge, rewards and recognition. These influences are interdependent and ultimately result in the desired performance."

HSBC drives manager-employee ownership of performance & development

Vishesh Dimri, Lead - HR Consulting, HSBC, shares how a focus on digital enablement, process effectiveness, and people manager capabilities helps drive open and honest conversations during feedback, foster stronger relationships, and more.

Banking and financial services firm HSBC focuses on three key pillars in driving the new way of work — digital enablement, process effectiveness, and people manager capabilities. 

These pillars are what help ensure a holistic approach towards performance management and enablement for both its employees and managers,  Vishesh Dimri, Lead - HR Consulting, HSBC (pictured above, right)  shares.

First, as part of digital enablement, HSBC has in place an HR mobile application that allows an "easy and simple" adoption of everyday performance on a real-time basis, where employees and managers are able to capture achievements and share regular, two-way feedback via the use of technology. More than an app, it is "a demonstration of flexible and remote working, without compromising on outcomes or comfort", Dimri highlights. 

With this app, employees are able to access an HR to-do list, their everyday performance & development plans, online learning resources (Learning On-the-Go), manage personal and employment information, as well as view real-time people manager dashboards, HSBC connections, and the organisation chart. 

Additionally, managers are empowered to handle key approvals on-the-go, as well as manage the personal and job details for direct functional reports.

Next, process effectiveness involves the use of everyday performance principles including goal setting and regular check-ins to facilitate the achievement of career aspirations as well as maintain productivity. 

"It fosters stronger relationships between managers and colleagues. Managers can support their team members in the right ways and, at the right times, towards a meaningful year-end assessment," Dimri explains. 

Finally, the third pillar of people manager capability is enhanced through constant engagement, coaching, and providing content support such as training and briefings, support resources, and guides.

One of the key elements of HSBC's year-end assessment is the 'Fairness Review', which has in place the following governance processes to ensure it remains unbiased: 

• seeking risk stewards’ inputs relating to non-financial performance,
• senior management reporting,
• audit checks, and
• evidence of all Fairness Review meeting discussions.

Dimri and his team also make it a point to support people managers in carrying out these reviews, through scenarios-based, bite-sized videos available via e-learning; briefing sessions; by refining the HSBC values to align with its behaviour rating scale to reflect the focus on Fairness Review, as well as via a continuous feedback tool.

Elaborating on this tool, Dimri shares that the feedback functionality enables employees to give, request and receive feedback. This can be done on a continuous basis — for example, when an employee has completed a key meeting or project milestone — or he/she can request feedback on a specific activity.

"We believe that by receiving feedback from their people manager, team members or colleagues can help each employee to better understand how he/she is progressing against his/her goals and what he/she may need to do differently to be successful in the future."

The process also helps to present evidence of employees' performance & development outcomes for their year-end assessment, wherein f eedback employees receive can flow into their year-end review forms.

"With this tool, feedback can be requested and sent to multiple colleagues at the same time across a wider network. This supports teamwork, collaboration, and agile ways of working," Dimri notes.

Top tips for employers

Having benefitted from this revised performance management process, the leader shares his learnings and words of advice to employers looking to improve their own processes in this area.

First, he shares, managers must focus on everyday performance & development by having simple conversations throughout the year supporting performance, development, and wellbeing.

"A two-way open and honest conversation is the key to successful performance management, developing trusting relationships, and supporting career aspirations."

Next, he notes the importance of recognition in driving successful performance management. "Recognising our people not only for a job well done, but also for effort and even for taking up a challenging or difficult task. In HSBC Singapore, we have 'At Our Best Recognition', an online tool for employees to celebrate colleagues who bring HSBC values to life. The programme helps to promote a better understanding of values in everyday practice and enables a consistent and equal way of recognising people globally."

Last, he also adds that having enabling tools to help support the performance & development conversation is critical. At HSBC Singapore, this involves a continuous performance tool that helps employees to stay connected with their manager and colleagues, anytime, and anywhere, playing an even more critical role with the "majority of the workforce working from home.

This tool lets employees take ownership by:

• Creating and tracking key activities, including regular conversations with managers, at their convenience; and sharing daily key activities with managers and documenting progress.
• Facilitating regular feedback such as conversations that can be initiated by the employee, manager, or colleague to request, give, or receive feedback to recognise positive performance and behaviour or support future improvements.
• Raising a topic for discussion — for example: discuss the strengths & development plan and focus on wellbeing development.
• Capturing achievements — celebrate success and share experiences.

4 key steps to implement a performance management strategy that supports your business objectives

From the Human Capital Implementation Toolkit , we share a snapshot on how employers can work towards a performance management strategy that cultivates the right environment that connects employees with the organisation and motivates them to excel.

Step 1: Set a strategic performance management philosophy

HR plays a strategic role in ensuring that company goals can be met through Human Capital programmes.

• Establish strategic organisational goals with senior leadership, detailing the key thrusts, KPIs and targets needed in the short, medium and long term to support their vision.

Step 2: Cascade and communicate goals

Provide a clear line of sight to create a more engaged and motivated workforce.

• Cascade corporate goals through business units down to individual employees, enabling them to understand how their actions influence the success of the organisation.
• Communicate strategic objectives and how each performance measure supports those objectives.
• Develop training/development plans for employees to achieve the capabilities to reach these goals.

Step 3: Manage performance

Supporting managers as the main link between employee performance and business outcomes.

Differentiate rewards  

• Cultivate a strong pay-for-performance culture.
• Communicate the wage structure so employees understand how it impacts them and how to change their behaviours.
• Design discretionary monetary or non-monetary recognition schemes.

Empower managers

• Empower managers to recognise and reward beyond targets and goals.

Reinforce desired behaviours

• Address the past year’s performance gaps and set new goals for the next year.
• Reinforce desired behaviours by recognising, rewarding and cultivating them. Identify role models within the organisation to be champions of certain desired behaviours.

Step 4: Evaluate and reward performance

Managers’ ability to evaluate and reward performance, and optimise touchpoints for growth and learning will be key to the success of this step.

Track performance

• Track performance against targets and schedule periodic performance reviews.
• Seek timely and multiple sources of performance feedback, e.g., managers, peers, customers, etc. to provide a fair and holistic assessment.

Equip and train managers to

• Drive and evaluate performance.
• Coach poor performers.
• Conduct performance conversations.

Conduct performance conversations regularly at meaningful points

• These allow managers to manage employee expectations, identify performance gaps, address performance concerns, discuss future growth plans, and enable employees to voice their opinions.

While systems and practices are essential, a key differentiator for an effective performance management practice is the alignment between culture, values and systems. This involves establishing an organisational culture that provides steadfast support to employees in their personal learning and development that views every touchpoint as a growth opportunity.

The performance management process should not be solely centred on employees’ past contributions but perform as future-focused stay conversations that support and engage employees in ways to grow, learn and improve.

FedEx Singapore and HSBC are Human Capital Partners in the Human Capital Partnership Programme .

The Human Capital Partnership (HCP) Programme is a tripartite initiative that brings together a community of exemplary employers in Singapore who have progressive employment practices in their organisations and are committed to developing their human capital.

Photos: Provided (L-R Eric Tan, MD, FedEx Singapore, and Vishesh Dimri, Lead - HR Consulting, HSBC)

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Performance Appraisal

Ivan Andreev

Demand Generation & Capture Strategist, Valamis

October 24, 2018 · updated April 5, 2024

12 minute read

What is a performance appraisal?

The purpose of a performance appraisal.

• How to organize a performance appraisal process

Performance appraisal examples

Performance appraisal methods.

• 5 Modern method of performance appraisal

A performance appraisal is the periodic assessment of an employee’s job performance as measured by the competency expectations set out by the organization.

The performance assessment often includes both the core competencies required by the organization and also the competencies specific to the employee’s job.

The appraiser, often a supervisor or manager, will provide the employee with constructive, actionable feedback based on the assessment. This in turn provides the employee with the direction needed to improve and develop in their job.

Based on the type of feedback , a performance appraisal is also an opportunity for the organization to recognize employee achievements and future potential.

The purpose of a performance appraisal is two-fold: It helps the organization to determine the value and productivity that employees contribute, and it also helps employees to develop in their own roles.

Benefit for organization

Employee assessments can make a difference in the performance of an organization. They provide insight into how employees are contributing and enable organizations to:

• Identify where management can improve working conditions in order to increase productivity and work quality.
• Address behavioral issues before they impact departmental productivity.
• Encourage employees to contribute more by recognizing their talents and skills
• Support employees in skill and career development
• Improve strategic decision-making in situations that require layoffs, succession planning, or filling open roles internally

Benefit for employee

Performance appraisals are meant to provide a positive outcome for employees. The insights gained from assessing and discussing an employee’s performance can help:

• Recognize and acknowledge the achievements and contributions made by an employee.
• Recognize the opportunity for promotion or bonus.
• Identify and support the need for additional training or education to continue career development.
• Determine the specific areas where skills can be improved.
• Motivate an employee and help them feel involved and invested in their career development.
• Open discussion to an employee’s long-term goals.

Career development plan template

This template helps employees and bosses plan together for career growth: set goals, assess skills, and make a plan.

How to organize a performance appraisal process

Conducting a performance review with an employee requires skill and training on the part of the appraiser. The negative perception that is often associated with the performance appraisal is due in part to a feeling of being criticized during the process.

A performance appraisal is meant to be the complete opposite. Often, the culprit is in the way the appraisal is conducted via the use of language.

The way the sender of a message uses language determines how the other person interprets the message once received. This can include tone of voice, choice of words, or even body language.

Because a performance appraisal is meant to provide constructive feedback, it is crucial that appropriate language and behavior are used in the process.

Human Resources (HR) are the support system for managers and supervisors to be trained in tactfully handling the appraisal process.

The performance appraisal process:

• The assessment process is usually facilitated by Human Resources, who assist managers and supervisors in conducting the individual appraisals within their departments.
• An assessment method should be established.
• Required competencies and job expectations need to be drafted for each employee.
• Individual appraisals on employee performance are conducted.
• A one on one interview is scheduled between the manager and employee to discuss the review.
• Future goals should be discussed between employee and manager.
• A signed-off version of the performance review is archived.
• Appraisal information is utilized by human resources for appropriate organizational purposes, such as reporting, promotions, bonuses or succession planning.

Let’s take a look at one example of a Manager speaking to an employee during a performance appraisal. Below are three versions of the same example.

Compare the difference in language and behavior and how it can change the end-result:

1. An appropriate appraisal example with mixed feedback

“We can start the review by looking at how each project went for you this quarter. Does that sound OK? First, every project you have worked on in the last four months has met the expected deadline and were all within their budgets. I see one project here was even early. They were all implemented successfully. Well done. You have succeeded in the criteria expected of a Project Manager here at ABC Company. Let’s take a look at a few areas where you might be able to develop your project management skills further. In Project A, B, and C, a few team members expressed that they were unsure what to begin working on in the first few meetings and felt that they were engaging in their tasks a bit late. When they tried to express this in later meetings, they felt there was hostility towards them. For upcoming Projects D, E, and F, is there anything that can be done to get team members up and running more quickly? Could more detailed task planning be completed prior to the project kick-off?”

Debrief : This example removes the errors from the first example and puts them in a more constructive light.

• The appraisal begins by involving the employee and making them feel like a valued part of the process.
• The appraiser focuses on measurable outcomes, such as each individual project, instead of broad, baseless generalizations.
• Positives are the focus of the assessment.
• Areas for improvement are offered in a constructive and neutral format by referring to specific events in the employee’s day-to-day tasks.
• The employee is given the opportunity to problem-solve the situation and contribute to their own sense of self-development.
• Constructive solutions are offered so the employee has a clear idea on what they can do better next time.

2. An inappropriate negative appraisal example

“Let’s talk about some of the problems. You are never proactive when it comes to the start of a new project. Things are left too late and there are often complaints. I have heard that your attitude has been less than positive during project meetings. You seem to have things going on at home right now, but they shouldn’t be intruding on your work.”

This example is extreme, but it conveys most of the errors that can occur in a performance review.

• The appraisal begins with a negative. It has been shown that starting with the positives can set the tone for the appraisal and helps employees feel more receptive to feedback.
• The appraiser speaks in a negative, accusatory language and bases the assessment on assumption instead of measured facts. An appraisal needs to be based on measured facts.
• The appraiser makes the discussion personal; a performance review should remain focused on the contributions of the employee to the job and never be about the individual as a person.
• Phrases like “ you are ” or “ you always ” are generalizations about the employee; a performance appraisal needs to be about specific contributions to specific job tasks.

3. An appropriate appraisal example for underperformers

“I wanted to talk to you today about your performance during the last quarter. Looking at the completed project schedules and project debriefs here, I see that each of the five projects was kicked off late. Team members reported having trouble getting the resources and information they needed to start and complete their tasks. Each project was delivered a week or more late and had considerable budget creep. Project A was over by $7000. Project B was over by $9,000, for example. These budget overages were not authorized. I think we really have potential to turn this around and I really want to see you succeed. The role of Project Manager requires you to kick-off projects on-time, make sure your team members have the resources they need, and it’s crucial that any budget issues or delays are discussed with myself or the other Manager. For the upcoming projects this month, I’d like you to draft a project plan one week prior to any project kick-off. We can go over it together and figure out where the gaps might be. Did you have any suggestions on how you might be able to improve the punctuality of your projects or effectiveness of how they are run?”

Debrief : This example deals with an employee who seems to be struggling. The appraiser unfortunately has a lot of negative feedback to work through, but has successfully done so using appropriate language, tone and examples:

• The feedback does not use accusatory language or tone, nor does it focus on the person. This is especially important at the start of a performance review when the topic is being introduced. Being accusatory can make an employee feel uncomfortable, upset or defensive and set the wrong tone for the rest of the review. Comments should remain focused on the employee’s work.
• The comments are constructive and specific. The appraiser uses specific examples with evidence to explain the poor performance and does not make general, unsubstantiated comments. Making general, broad comments like “Your projects have a lot of problems and are always late” are unfair as they cannot be proven. The tone also creates hostility and does not help the employee to solve the problem.
• The appraiser offers a positive comment about improving the situation and also a specific solution to improve the performance. The point of a performance review is to motivate and help an employee, not cut them down.
• The appraiser asks for the input of the employee on how to solve the problem. This empowers the employee to become more involved in their skill development and ends a negative review on a positive note.

4. The inflated appraisal example

“I don’t think we have too much to talk about today as everything seems just fine. Your projects are always done on time and within budget. I’m sure you made the right decisions with your team to achieve all of that. You and I definitely think alike when it comes to project management. Keep up the great work.”

Debrief : This example appears like a perfect performance appraisal, but it’s actually an example of how to inappropriate:

• The feedback glosses over any specifics regarding the employee’s actual work and instead offers vague, inflated comments about everything being great. Feedback needs to refer to specific events.
• Any mention of trouble on the team is ignored. A performance review needs to discuss performance issues before they become serious later on.
• The appraiser compares the employee to himself. This could be referred to as the “halo effect”, where the appraiser allows one aspect of the employee to cloud his or her judgement.
• Nobody is perfect; every appraisal should offer some form of improvement that the employee can work towards, whether it is honing a skill or learning a new skill.

There are many ways an organization can conduct a performance appraisal, owing to the countless different methods and strategies available.

In addition, each organization may have their own unique philosophy making an impact on the way the performance assessment is designed and conducted.

A performance review is often done annually or semi-annually at the minimum, but some organizations do them more often.

5 Modern methods of performance appraisal

There are some common and modern appraisal methods that many organizations gravitate towards, including:

1. Self-evaluation

In a self-evaluation assessment, employees first conduct their performance assessment on their own against a set list of criteria.

The pro is that the method helps employees prepare for their own performance assessment and it creates more dialogue in the official performance interview.

The con is that the process is subjective, and employees may struggle with either rating themselves too high or too low.

2. Behavioral checklist

A Yes or No checklist is provided against a series of traits. If the supervisor believes the employee has exhibited a trait, a YES is ticked.

If they feel the employee has not exhibited the trait, a NO is ticked off. If they are unsure, it can be left blank.

The pro is the simplicity of the format and its focus on actual work-relate tasks and behaviors (ie. no generalizing).

The con is that there is no detailed analysis or detail on how the employee is actually doing, nor does it discuss goals.

3. 360-degree feedback

This type of review includes not just the direct feedback from the manager and employee, but also from other team members and sources.

The review also includes character and leadership capabilities.

The pro is that it provides a bigger picture of an employee’s performance.

The con is that it runs the risk of taking in broad generalizations from outside sources who many not know how to provide constructive feedback .

4. Ratings scale

A ratings scale is a common method of appraisal. It uses a set of pre-determined criteria that a manager uses to evaluate an employee against.

Each set of criteria is weighted so that a measured score can be calculated at the end of the review.

The pro is that the method can consider a wide variety of criteria, from specific job tasks to behavioral traits. The results can also be balanced thanks to the weighting system. This means that if an employee is not strong in a particularly minor area, it will not negatively impact the overall score.

The con of this method is the possible misunderstanding of what is a good result and what is a poor result; managers need to be clear in explaining the rating system.

5. Management by objectives

This type of assessment is a newer method that is gaining in popularity. It involves the employee and manager agreeing to a set of attainable performance goals that the employee will strive to achieve over a given period of time.

At the next review period, the goals and how they have been met are reviewed, whilst new goals are created.

The pro of this method is that it creates dialogue between the employee and employer and is empowering in terms of personal career development.

The con is that it risks overlooking organizational performance competencies that should be considered.

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What makes a good team

Reimagining performance achievement

• Call for Change
• When Tech Meets Human Ingenuity
• A Valuable Difference
• Meet the Team
• Related Capabilities

Call for change

Accenture had a long-standing performance management model that was built when the company was primarily a consulting organization in a less global and digital environment. Over time, changes in technology, Accenture’s business services and the company’s workforce led to reimagining performance management for the company.

One need was to engage the newest generation of Accenture’s growing workforce, Millennials and Generation Z, with a digital tool that would facilitate ongoing feedback and dialogue. A second need was to introduce a single consistent tool that could be used across all geographical units and would be globally relevant. For Accenture’s global IT organization , this new program presented the opportunity to develop a new, digital performance application making use of latest scalable and serverless cloud platform services.

When tech meets human ingenuity

Accenture Human Resources designed Performance Achievement, a new performance management approach in collaboration with Accenture’s global IT organization; Fjord, part of Accenture Interactive; and early adopter groups. Human Resources and Fjord focused on applying human-centered, experience design to the concepts, while global IT partnered with Human Resources to develop the functional and technical requirements.

Global IT together with Human Resources solution architects assessed the marketplace for packaged solutions but were unable to find any that would meet this project’s unique requirements. This outcome led the team to turning to build a solution. Development had to be done quickly to meet a tight timeline. To support this objective, a core global IT team started with three main tenets:

• Stay on the leading edge architecturally and use on-demand cloud computing platforms to allow for fast development and experimentation.
• Move toward use of microservices architecture.
• Be cloud-first.

The team applied these tenets to the design and front-end custom development. For the back end, the team applied Accenture’s experience with Amazon Web Services (AWS) to use on-demand cloud offerings that were a fit. The benefit of this approach was in being able to move away from a traditionally structured database and instead move toward the use of unstructured databases. This architecture allowed the teams to be fast and agile, enabling global IT to meet the aggressive timeline set by leadership.

Development followed an agile methodology. The technical architecture work was ongoing by global IT, and as one release was being developed, solution architects in the Human Resources space would be planning the next couple. Global IT development teams in the United States used a responsive framework to develop the back end, holding daily scrums and moving from releases every few months to monthly. Global IT also teamed with rapid global development cells in Spain and Argentina that developed the functional components and teamed continuously with operations teams in India.

New features and changes were continually deployed into production, which included integration with a related Total Rewards application to allow for automated feeds to the Total Rewards teams for administering employee compensation. Over the years, the tool has grown richer in functionality with many new features added. Significant improvements have been made in the following areas:

Real-time performance

• Rolled out near-real-time global reporting capability on performance review process.
• Launched new, innovative features aligned with providing continual, real-time feedback.

High availability and speed

• Enabled cloud-centric architected solutions to ensure designs included fail-forward and self-recovery mechanisms, resulting in zero downtime.
• Re-architected the core service engine to ensure performance optimization, resulting in significant speed improvements, with feature-rich functions.

Operational excellence

• Reduced operating cost by 10 percent year over year, despite the increase in functionality and up-time needs.
• Revamped operating procedures to provide best-in-class, “eyes-on-glass” monitoring and hyper-care support, resulting in response times within minutes.

Using an on-demand cloud computing platform for the Performance Achievement system enables Accenture people to complete the performance achievement process remotely and virtually, from wherever they are in the world. This approach supports a seamless employee experience, making sure our people receive the conversations and feedback they need and as committed. This capability works smoothly even in times when everyone is working from home or when the cycle needs to be compressed.

"Performance Achievement is enabling the strengths and potential of our greatest asset—our people—to achieve greater performance for themselves, their teams and our clients." — Maeve Lucas , Global Performance Lead – Accenture

Reimagined performance management approach

The technology powering Performance Achievement is a mixed-model solution developed with custom Microsoft .NET code and Amazon Web Services. Key components include:

Innovative application architecture

Parts of Amazon Web Services native technology Platform-as-a-Service

Interview-centric technologies

Analytical data model

Microservices back end that communicate with a transactional front end

Components from Accenture’s existing performance management solution

A valuable difference

Tremendous teaming and collaboration led to the successful deployment of a new digital tool and Performance Achievement experience to Accenture’s global employee population. The application receives on average 20,000 visits daily and increases up to 300,000 visits a day during peak time frames.

Since launching, the team has adopted a DevSecOps model to provide agile delivery coupled with application security. Expecting high fluctuation in usage patterns, a "scale at will" approach was devised to allow for rapid scaling movements while also optimizing hosting costs. The team has encouraged a culture of continuous improvement and continuous delivery (CI/CD), which has allowed members to retrospectively identify improvements following each performance cycle to ensure they continually raise the bar.

The resiliency of the solution was put to the test in 2020 when Accenture decided to redesign the performance achievement process aligning to the company’s next-generation growth model. The team tuned processes and condensed the talent cycle by 300 percent compared to earlier periods. As a result, a surge of individuals used the Performance Achievement system, pushing user load up 250 percent in a short time frame. The application held up for an unprecedented surge running one cycle, globally, for more than half a million employees.

Though this performance "super cycle" was the biggest undertaking yet, with usage reaching more than 35,000 site visits per minute, creating and providing close to 2.5 million performance documents, it was achieved with 100 percent uptime and no high-priority issues.

The Performance Achievement journey is ongoing as Accenture’s Human Resources and global IT organizations collaborate to add and refine Performance Achievement elements as the program evolves.

"IT delivered on the organizational imperative—a people-at-the-center application that focuses on where we need to take our people rather than where they have been and a design aimed at elevating performance as we grow rather than measuring it in the past." — HOLLY OBERMAN , Performance Operations Global Lead – Accenture

Meet the team

Maeve Lucas

Rahul Maheshwari

Wesley Schott

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How One Company Worked to Root Out Bias from Performance Reviews

• Joan C. Williams,
• Denise Lewin Loyd,
• Mikayla Boginsky,
• Frances Armas-Edwards

Researchers worked with a law firm to make two simple changes to their process. A year later, they saw dramatic improvements.

An audit of bias in performance reviews at a midsized law firm found sobering differences by both race and gender. The authors identified four patterns of bias in the evaluations and recommended two simple changes for the following year: 1) Reworking the performance evaluation form to break job categories down into competencies and require that ratings be backed by at least three pieces of evidence; and 2) Developing a simple, one-hour workshop in which participants were introduced to the patterns of bias and learned how to use the new form. One year later, people of color and women got more constructive feedback, and the playing field was leveled for everyone: Whereas white men had longer, more complex evaluations in year one, in year two, both word count and language complexity were similar across all groups. While there was still room for improvement, the intervention showed that evidence-based metrics can help companies make steady progress and improve outcomes for everyone.

About two years ago, a midsize U.S. law firm reached out to the Center for WorkLife Law to learn how bias was surfacing in their performance evaluations. The firm’s D&I director had spot-checked a sample of supervisor evaluations for bias and identified several red flags. They decided they wanted to go a step further and take a data-driven approach. (Music to our ears!)

• Joan C. Williams is a Sullivan Professor of Law at University of California College of the Law, San Francisco and the founding director of the Center for WorkLife Law. An expert on social inequality, she is the author of 12 books, including Bias Interrupted: Creating Inclusion for Real and for Good (Harvard Business Review Press, 2021) and White Working Class: Overcoming Class Cluelessness in America (Harvard Business Review Press, 2019). To learn about her evidence-based, metrics-driven approach to eradicating implicit bias in the workplace, visit www.biasinterrupters.org .
• Denise Lewin Loyd is an associate professor of business administration in the Gies College of Business at the University of Illinois Urbana Champaign. Her work on diversity in teams examines how group composition and the social status of group members interact to affect group outcomes as well as dynamics within and between subgroups.
• Mikayla Boginsky is the policy and research fellow at the Center for WorkLife Law University of California, Hastings Law.
• Frances Armas-Edwards is an intraprenuer working in People Operations at Google. Frances’ work focuses on improving diversity, equity and inclusion; she leverages research to shape systemic interventions, design scaled learning solutions and improve people processes across the company. She holds a doctorate in education leadership from Harvard’s Graduate School of Education.

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Performance Management and Appraisal: A Case Study of Gap Inc.

The performance management system is a key process in any given organization. Through the process, firms are able to communicate organizational objectives, promote individual accountability, and track and evaluate the performance of employees (Gruman & Saks, 2011; Selden & Sowa, 2011). With the increased changing competitive business environment, organizations require to regularly review the system, with the aim of improving various points to keep up with the market demand and competitors (Moynihan, & Pandey, 2010). Being a competitive firm, Gap Inc. required to review its performance management for a number of reasons. To begin with, both managers and subordinates disliked the cumbersomeness of the existing method. Notably, they did not like the frequent briefing meetings that required them to explain their contributions to the performance of the company. Moreover, management considered the “nice” culture to be a favorite; however, it was not an honest approach to performance appraisal. Resultantly, there was a need to transform the culture from “nice” to “nice and honest.”

“Traditional” Performance Management System

A performance management system is a method used by a corporation to measure the results of the employees. A traditional performance management system is characterizedwith aspects that have attracted many critics, such as its focus on employee weaknesses, reliance on annual reviews, failure to provide timely feedback, setting of goals that do not align with workers’ needs, and its tendency to reward annual performance and the duration of serving the company (Becker, Antuar, & Everett, 2011). Notably, these aspects make the system to rank some employees highly, yet their productivity may not commensurate with the award they receive. For example, a method such as forced ranking inherently requires that only a few employees rank at the top and bottom while concentrating the rest in the middle (Cascio, 2016; DeNisi & Murphy, 2017). Therefore, this method often fails to fairly reward some of the employees, while rewarding others excessively.

Process Adopted in Setting up GPS System

In the creation of a new performance management system, it is crucial to follow certain steps. Ollander-Krane, the employee tasked with the development of the new policy adopted three stages in the development of the new system, including defining performance, facilitating performance, and encouraging performance. In defining performance, he ensured that every employee understands his or her role in the company. To achieve this, he ascertained that there were clear goals, measures, and assessment methods. According to Cascio (2016), goals direct employees to the achievement of the specific performance target. For example, Gap Inc. had goals of increasing the market share. In addition, the company should be able to determine the level of attainment of the set goals. Vague aspects, such as the success of a company are not measurable; hence, they are not useful in the creation of a performance management system. Moreover, once the measurement is determined, it is necessary to assess how progress is made toward accomplishing the set goals. It is essential to have regular performance appraisals to direct the employees toward the achievement goals.

In facilitating performance, the manager ensures that there are no limiting factors towards the achievement of the set goals. For instance, Ollander-Krane established that the current system demotivated the employers. In particular, they focused on their grades after evaluation instead of their actual performance (Margolis, McKinnon, and Norris, 2015). Therefore, setting up a new system would eliminate hindrance. All the steps were facilitatedby researching and reading books. Specifically, the manager read books such as  Get Rid of the Performance Review ,  Coaching with the Brain in Mind , and  Mindset . The books had unique lessons which aided Ollander-Kane to set up a new performance management system.

Four Main Components of the New System

The new performance appraisal method Gap Inc. adopted had four components: performance standard, goals, touch base, and rewards. The four approaches form the core-components of Grow, Perform, Succeed (GPS) – the new performance management system.

Performance Standard

The performance standard replaces the annual reviews that characterized the traditional system. Instead of the traditional ratings and rankings, employees would adhere to a set performance standard on a daily basis. Notably, the new system set tough objectives that will motivate employees to work hard to achieve the set targets. In such a way, the company will probably increase its market share owing to its hard work, company values. Furthermore, the standard allows the corporation to learn from its failures whenever employees are unable to meet the set targets (Bolden, 2016). In addition, managers can train their employees to equip them with skills that will aid them to effectively achieve the set targets. Feedback will also be provided to employees; hence, providing a basis on which to improve upon their weaknesses and strengths.

To set goals, the new system ensured that employees settled on few goals that are easy to attain. Goals provide a sense of direction for the employees because it dictates what is to be achieved (Pulakos, Hanson, Arad, & Moye, 2015). The goal setting process will be capped at eight, with some goals having a short time spun while the rest lasting for a few years. The company also encourages the employees to evaluate their targets more than once in a year, as opposed to the rigid year-end reviews that characterized the old system.

GPS intended to change the traditional way of discussing performance amongst employees with “touch base” sessions which focused on their performance instead of informal business discussions of reports. Rather than taking notes in these meetings, Ollander-Krane discouraged managers from taking notes during the session, but to concentrate in the meetings. In this way, he hoped to achieve a well-motivated workforce. Interestingly, employees were given an equal responsibility as their managers to ensure they met regularly. In 2014, a survey by the human resource department found out that there were regular touch base meetings (Margolis et al., 2015). Therefore, the regular meetings resulted in better performance of the company.

Employees in Gap Inc. used to receive awards on a yearly basis in the old system. Currently, employees are given rewards on account of how much they contribute to the output levels. When every employee is awarded individually, they are motivated to improve their performance (Arnaboldi, Lapsley, & Steccolini, 2015). Consequently, personal output amount will result in increases in the general performance of the firm. Annual bonuses given to employees will change to a clear structure that identifies company performance as the most critical reward determiner, accounting for 75% of the total bonus. The remaining 25%will be based on individual performance. In this way, the firm’s employees strive to improve the business results of the company since they account for most of the rewards. Moreover, the company increased its delegation of bonus allocation to the managers (Margolis et al., 2015). Since rewards will not be pegged on the annual evaluations, the organization’s reward system offers incentives to employees, eliminating the need for regular update meetings characterizing the traditional system.

Challenges that Faced Gap Inc. in Implementing GPS

Although the management accepted the proposal of Ollander-Krane, its implementation, as is the case with any change in an organization,was not without challenges. The adoption of GPS as a replacement to the traditional appraisal method began in 2014 and was characterized by a few issues. For example, some managers were not aware of the need for a new management system. In fact, some did not understand the rationale of GPS. Even though the managers disliked the “traditional” method that conducted reviews at the end of the year, it is what they understood. However, this challenge was overcome by educating all the managers about the old and new system, aiding their understanding. It turned out that the new system would create freedom for them to manage their employees. The system would promote the acknowledgment of top and low performers.

In addition, even after understanding the new system, some managers considered GPS as a new method by the management to reduce their ability to earn bonuses. They thought the new method would limit their avenues of obtaining more income(Margolis et al., 2015). Regardless of the attitude of the managers, the system proved to be effective in increasing the market share and company performance. It is common for humans to resist any change due to the uncertainties it presents.

Furthermore, managers faced difficulty in adopting and getting accustomed to the new system. In other words, the new system involved a different approach to giving and receiving feedback, which is vital in notifying employees about their performance levels (Sargeant et al., 2015). In fact, discussions about the year performance were easier in the “traditional” system. The previous system allowed managers to give feedback to employees about specific measures that made their performance to be evaluated at a certain level. Nevertheless, this challenge would be overcome with the right amount of training, time, and effort in using the GPS system.

Another challenge is the fact that the regular touch base meetings posed their unique problems, such as disruptions in the course of the year. As a result, the affected employee misses some meetings. When they resume, it becomes difficult for them to be at par with their colleagues because they might have lost a sense of the future strategic direction of the company or department. In such a way, the implementation of the system is hampered directly by even its components.

Performance Management Systems and the Effectiveness of GPS

Most managers mistakenly use the performance appraisal and performance management interchangeably. Unlike the former which is used to identify the strengths and weaknesses of employees in the execution of their job description, the latter is a method applied by the human resource department to give direction to subordinates or seniors. In fact, the adoption of GPS as a new performance management system is a move in the right direction. Ollander-Krane reports that in the first year, the new system had achieved some positive changes in the company. For example, some employees stated that their touch base had increased, while others acknowledged that they had not spoken with their superiors for several months before the adoption of GPS. The increased meetings amongst the employees probably increased the working relationship of the subordinates and their superiors (Selvarajan, Singh, & Solansky, 2018; Duncan, & Malini, 2016; Forrester, 2011). Therefore, the new method was impactful to the organization’s performance.

Moreover, the system is linked to the company’s ticker symbol, reminding employees that their performance is evaluated by the share prices of the company. As a result, they will direct their efforts in the growth of the company’s financial performance. The system also enhances objectivity and honesty in the sharing of feedback between managers and employees. Moreover, it provides employees with a sense of direction. For instance, it gives them their current performance level while providing the expected output from their efforts for the future.

If I were to recommend a new performance management system to a company that is still traditional, I would suggest GPS as a better alternative. The new system is easier to implement than other systems. It requires little participation by the management in deciding the amount of bonus to give to employees. Moreover, the method allows managers to determine how to allocate bonuses amongst their employees. Consequently, some business units were able to invent their own incentive scheme that motivated employees to provide overwhelming performance. The method also increased the efficiency of service delivery within the company and reducing the workload for the human resource personnel tasked with performance appraisal (Tziner & Rabenu, 2018; Tziner & Rabenu, 2018). In this way, the time will be used in other equally important tasks.

The new system is also effective because it has reduced the number of customer complaints. In particular, the complaints reduced to one from between 30-40 calls in previous years. Owing to this, it is possible that the system will blend well in other organizations increasing their customer satisfaction. Since customers are contented, the firm is able to retain customers while growing its market share.

In summary, performance management should not be confused with performance appraisal. The former promotes the strengths of employees by providing an avenue to direct their efforts in meeting the company objectives, while the latter is used to measure performance and offer bases for which promotions and firings in an organization are done. It is important for the management to adopt a good management system since it aids in increasing the productivity of employees and the profitability of the firm.

Arnaboldi, M., Lapsley, I., & Steccolini, I. (2015).Performance management in the public sector: The ultimate challenge.  Financial Accountability & Management ,  31 (1), 1-22.

Becker, K., Antuar, N., & Everett, C. (2011). Implementing an employee performance management system in a nonprofit organization.  Nonprofit Management and Leadership ,  21 (3), 255-271.

Bolden, R. (2016). Leadership, management and organizational development. In  Gower handbook of leadership and management development  (pp. 143-158).Routledge.

Cascio, W. F. (2016).  Managing human resources: productivity, quality of work life, profits  (10th ed.). New York: McGraw-Hill.

DeNisi, A. S., & Murphy, K. R. (2017).Performance appraisal and performance management: 100 years of progress?  Journal of Applied Psychology ,  102 (3), 421.

Duncan, M. S., & Malini, N. (2016). Best practices of sales force compensation within small, to medium sized enterprises: The metrics associated with performance appraisal.  The Association of Collegiate Marketing Educators ,  123 , 120-127.

Forrester, G. (2011). Performance management in education: milestone or millstone?.  Management in Education ,  25 (1), 5-9.

Gruman, J. A., & Saks, A. M. (2011).Performance management and employee engagement.  Human Resource Management Review ,  21 (2), 123-136.

Margolis, J., McKinnon, P., and Norris, M. (2015).Gap Inc.: Refashioning Performance Management. Harvard Business School

Moynihan, D. P., & Pandey, S. K. (2010). The big question for performance management: Why do managers use performance information?.  Journal of Public Administration Research and Theory ,  20 (4), 849-866.

Pulakos, E. D., Hanson, R. M., Arad, S., & Moye, N. (2015). Performance management can be fixed: An on-the-job experiential learning approach for complex behavior change.  Industrial and Organizational Psychology ,  8 (1), 51-76.

Sargeant, J., Lockyer, J., Mann, K., Holmboe, E., Silver, I., Armson, H., …& Power, M. (2015). Facilitated reflective performance feedback: developing an evidence-and theory-based model that builds relationship, explores reactions and content, and coaches for performance change (R2C2).  Academic Medicine ,  90 (12), 1698-1706.

Selden, S., & Sowa, J. E. (2011).Performance management and appraisal in human service organizations: Management and staff perspectives.  Public Personnel Management ,  40 (3), 251-264.

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21 Engaging Performance Review Examples [+ Tips From an HR Manager]

By Victoria Clarke , Oct 12, 2023

Performance review season can be a daunting period for both management and employees.

One-sided conversations, mixed messages and wordy documents leave both parties feeling like they have the same, stressful conversation each time.

But if you take the right approach, quarterly or annual performance reviews are an awesome opportunity to reinforce solid habits, redirect poor traits and drive professional growth for your employees. My trick? Venngage’s free Online Performance Review Generator .

In this post, I’ll give you tips from my own experience as an HR manager to make the performance review process a lot more painless, plus human resource templates you can customize now.

Performance review examples and advice:

What is a performance review, how to write a performance review, performance review examples and templates, performance review examples for managers, performance review examples for employees, self performance review examples.

• Quarterly performance review examples
• Annual performance review examples

Simple performance review examples

• Useful performance review phrases
• What’s the purpose of a performance review?

A performance review is a regulated assessment in which managers evaluate an employee’s work performance to identify their strengths and weaknesses, offer feedback and assist with goal setting.

The frequency and depth of the review process may vary by company, based on company size and goals of the evaluations. It could be annually:

Or quarterly, to name a few:

Watch this quick, 14-minute video for performance review tips, templates and best practices:

This quarterly performance review example has sections for both achievements and areas of improvement. It also has a section for core values, as this must be a key performance indicator at this company. Different companies will have different measuring sticks for success.

Q: Can I customize the performance review templates in this post?

A: Yes, you can! All the templates are easy to edit. Some templates are free, some are paid.

Click any template and you’ll be asked to sign up for free. You’ll enter our online editor. Edit the text, apply your brand colors, add pages, upload your logo and more. Share a link for free.

Upgrade to our Plan for Professionals to download in PDF or PowerPoint format and access premium features and templates, such as real-time team collaboration and one-click branding.

Having an employee-friendly performance review process can not only make or break the development of your employees but also disrupt the relationship between managers and their reports.  

Beyond creating a robust performance review strategy and performance review form, managers must also consider their delivery of the appraisals. Communicating a performance review effectively is the final touch to executing a constructive, celebratory and effective review process.

When creating an effective assessment, it’s important to include the following:

• Calculate an overall rating for the employee; although a manager will be highlighting both the strengths and weaknesses of an employee’s behavior , it will aid the employee’s morale to communicate how the employee averaged on this rating scale.
• Ensure the employees are engaged in their own reviews; thus, be sure to include the employees’ goals and developments toward reaching such goals in the assessments .
• Celebrate employees improvements; highlighting an employees’ developments are a powerful way to impact employee engagement and boost overall team performance .
• Company culture and values; dedicate a section of the assessment to evaluate how employees align with the company’s core values thus contributing to a positive company culture .

Based on my involvement in building out our own effective performance review process at Venngage, I suggest taking the following steps into consideration when constructing a performance review:

1. Set expectations early

Early in an employee’s career with a company, managers should communicate the details of their review process including the expectations. It should be included in your employee handbook , for example.

In this way, managers set and communicate clear expectations of the key job functions and competencies of the role when an employee joins the company. The information presented in performance reviews should align with this define as well as use familiar language and terms. This strategy will work to eliminate any potential confusion or surprises for both parties.  

2. Don’t make it personal

Feedback is about actions and behavior, not the person.

When writing a performance review, it helps to take a look at the issue(s) you’ve included and ensure that they apply to actions and behavior of the employee rather than the personal attributes of said employee.

This will also help to regulate the information mentioned in the review, to guarantee it is relevant and appropriate information.

3. Beware of biases and limitations

While there may be a general ‘right’ way of doing things, there are often multiple — and equally good — ways to reach the same end goal.  

Please ensure your review is not biased or limited in favor of your personal work style and beliefs. Try to consider the various aspects of the employees role and experience that may impact their decision to pursue alternative methods or working habits. Be empathetic towards these factors when writing your review.

4. Be specific

The information presented in the review should be task-focused, clear and to the point.

General comments will leave an employee feeling confused and in the dark as to what aspect of their work needs to be corrected or how they can pursue improvements.  

Failing to be direct in your messaging will impact the way your message is received and create further confusion about what the expectations are. Managers should be specific on what behaviors of their employees they are celebrating and what actions require improvements.

4. Offer guidance

Managers play a critical role in understanding the career goals of their employees and crafting development opportunities to help their reports achieve their goals.  

It is important as a manager to offer your advice and expertise to your employees to help further their development.

If, as a result of the feedback given, the employee (or yourself) may feel as though they need additional training, consider the benefit of workshops, mentoring or coaching.  

Be sure to use performance reviews as a way to guide employees whether it is toward further greatness or for areas requiring some improvement.  

5. Follow up

Follow up in writing and check in continuously to ensure improvement.

Both managers and employees should receive a copy of the review to refer back to moving forward.

Whether reviews are scheduled annually or quarterly, they should be a continuous topic of discussion for both managers and employees. When writing a review, ensure that the review is clear and specific. Being mindful of this will help to ensure the employee can easily refer back to the form on their own after the meeting.

Related: How to Write a Performance Review That Inspires Growth (With Examples & Templates

To conduct an effective performance review, it’s important to deliver a positive and solution-focused message. This will be less discouraging to the employee.

This performance review example  shows how you can offer constructive feedback, while also praising the employee’s efforts. The majority of the sections focus on the employees’ achievements and strengths.

Suggested areas of improvement are positioned in the middle, letting managers cushion criticism with praise.

This appraisal example shows how managers can give constructive feedback to their employees by giving them clear direction on what things to keep doing and what actions to take in future.

While Felicia did not meet her goal, her manager acknowledges that the goal was set deliberately high and that 74 percent of the goal still has significant impact.

This employee review form also points to specific positive behavior, such as self-education, teamwork and a strong work ethic.

There are also specific recommendations for improvement, such as putting together a plan to get more press mentions and scaling her experiments.

Another way to do a performance review, or kick off the process, is to use a quadrant. Both the employee and manager can plot where they think the former falls on certain key values and build out discussion points from there.

You can change “get it done/get it right” in the employee review template below to “uphold core values/contribute to company culture” for example.

Performance reviews are a crucial part of effective management, offering an opportunity to provide constructive feedback and set the stage for future growth.

To conduct a successful performance review as a manager, preparation is essential. Collect and review performance data well in advance, considering both quantitative metrics and qualitative observations.

Make sure to prioritize clear and open communication. Create a comfortable and respectful environment for the discussion, allowing the employee to share their perspective and concerns.

Offering specific examples of both strengths and areas for improvement is critical, as vague feedback can lead to misunderstandings.

Additionally, focus on setting SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) goals for the future, collaboratively establishing an action plan that aligns with the company’s objectives and the employee’s career aspirations.

Finally, follow up on the action plan throughout the year, providing ongoing support and feedback to ensure continuous improvement. Consistent and well-structured performance reviews contribute to employee development, job satisfaction, and overall team success.

Performance reviews for new employees are critical in setting the tone for their growth and integration into the organization.

For new employees especially, they may be nervous or unsure of what to expect for their first performance review. That’s why, it’s important for managers to create a welcoming and comfortable environment.

Start by acknowledging their achievements and progress since joining the company. Recognizing their early contributions can boost their confidence and motivation.

Additionally, focus on clear communication. Outline expectations and performance standards specific to their role. New employees should leave the review with a clear understanding of their job responsibilities and how their work aligns with the company’s goals.

It’s also crucial to discuss their career development. New employees often seek opportunities for advancement and growth. Use the review to explore their long-term goals within the company, and explain how their role fits into the larger career path.

Finally, emphasize ongoing support and mentorship. New employees benefit from regular check-ins and guidance to help them acclimate and succeed in their roles.

In a self-performance review, employees assess themselves using the same rubric as their managers would and submit them to HR and/or their manager prior to their official review meeting.

The benefits of doing self-assessments have made them a common part of the employee review throughout many companies.

Self-assessments are an encouraging opportunity for employees to share their thoughts about their job, goals, desired responsibilities and aspects of either their role or environment that they may be struggling with.

Set employees up for success in the self-assessment process by giving them a robust employee evaluation form with thoughtful questions, and HR tools to automate this process and make it more convenient.

Annual self-evaluation employee review template

This first example is perfect for a thorough annual review. The targeted questions prompt the employee to reflect on their achievements and shortcomings, while also rating themselves on specific skill sets required for their job.

The above employee self-assessment example allows for multiple sign-offs, plus a section to list colleagues who can back up the employee’s statements.

Yearly performance self-evaluation templates

A yearly performance self-evaluation isn’t just a great chance for employees to assess their past performance.

It’s also a way for employees to plan for their professional future as they can see where their strengths lie and what skills they need to build to move up in the company. An annual self-evaluation can also build an employee’s case for their compensation review.

This employee self-evaluation form is broken into sections that cover all these factors: about your job, achievements, goals and professional development .

This yearly performance self-evaluation template has space to expand on goals met and alignment with core values, as well as skills they’d like to build in the future:

Self-assessment employee review forms

Many performance reviews are incredibly detailed. Sometimes, a higher-level overview is all that’s needed.

Quadrant evaluations, like the template below, are a great way for employees to do an assessment and for managers to quickly add their own evaluation, without getting into the weeds.

Employees can add what’s being evaluated in the easy-to-edit template below (instead of get it done/do it right). The employee adds an icon where they think they fall in the quadrant, and the manager does the same, with room on the last page to further break down the evaluation.

Sounds tough? Our real-time collaboration feature (part of the Business Plan ) lets both manager and employee work on the same doc online, leave comments, share private links and more.

The self employee review form below lets the employee write out their job description. That way, they can reference their deliverables in the Goals Achieved and Areas of Excellence sections and directly demonstrate their impact on the organization:

This self-performance review example gives employees the chance to reflect on their achievements on a quarterly basis.

This way, employees can demonstrate meeting quarterly goals. It can also give them a chance to reflect on their strengths and weaknesses and have a chance to act on them before their big annual review:

Self-assessments also help enlighten managers of how employees understand their place within the company’s organization and culture.  

The information disclosed in self-assessments should serve as a major element of official performance reviews in order to ensure that both a two-way conversation occurs and that the needs of both parties are being met moving forward. Looking for a better way to enhance employee engagement, to avoid quite boring meetings? Try out the top 14 inspiring games for virtual meetings , to learn how to add a live poll, word cloud, spinner wheel or even live Q&A sessions to elevate your presentation!

To make for the most effective self-assessments, employees should be sure to consider how their managers’ perceptions of their performance varies from their own.  

With this in mind, the information shared in a self-assessment can guide or pivot a manager’s perception and assessment of an employee’s performance .

Quarterly employee performance review templates

Quarterly reviews are important because they provide multiple opportunities for employees to receive helpful feedback on how to improve as the year progresses.

This quarterly performance review example reflects on specific areas of improvement, such as scaling her experiments and developing content partnerships.

Quarterly reviews from Q1 to Q3 serve as a means of providing specific, deliberate feedback to employees so they know exactly how to improve on their goals and skills.  

This enables the final, annual evaluation conducted at the end of Q4 to serve as a final assessment that will have the most weight in determining how the employee will excel into the next year, discretionary bonuses, salary increases, etc.

Quarterly reviews offer a documented and tracked record of an employee’s progress throughout the year.

This means that each quarter should be assessed using the same rubric throughout the entire year. This will aid in ensuring an accurate representation of an employee’s development is recorded.

That means, if you use the below employee review template in Q1, you should also use it again in Q2 and Q3:

Quarterly employee review template

This quarterly review template is a more condensed version of the example above.

If you’d like to keep your quarterly reviews short and to the point, this template will suffice. Employers can then use the expanded version above for their annual review.

If you want a template that’s filled with useful information on the types of performance review phrases you can use for a quarterly review, you can edit the one below:

Employee self-evaluation sample answers

It’s also important for employees to comment and reflect on their reviews.

They can both point out specific milestones that were missed:

• I generated five new leads and, as a result, I exceeded my sales quota by 20%
• I wrote a blog post based on original research that doubled our organic traffic in June

And also to acknowledge areas of improvement:

• I recognize that I need to form new content partnerships. I plan to do so in Q3 by putting together a list of 10 potential targets based on past linkbuilding partners and sending a customized pitch email.

Annual performance review templates

At large organizations, there may not be enough resources in order to devote the time needed to conduct quarterly performance reviews for every employee.  

This is also true in the case of a supervisor who has a large number of direct reports working for them whereby time management is their main issue.  

In these situations, an annual performance review would work best, especially if the employees being evaluated are experienced in their line of work and have been with their company for a long time.

Annual employee performance review templates

In this employee review template, staff are evaluated on only four factors: ability, goals, areas of improvement, and core values:

Annual evaluations are typically geared towards determining employee raises and discretionary bonuses.

Regular one-on-one meetings between direct reports and managers throughout the course of the year would be a great way to supplement this process.

This annual employee review template can simply include scores (out of 100 etc.) in each box. Or put notes in each section to explain the overall performance score.

This being said, annual appraisals would need to take a more general approach to evaluating employees than just providing a summary of their performance over the year.

The following employee review template takes a graphic approach and neatly summarizes overall performance using a score out of 100 for factors such as adaptability and project quality:

Employee evaluation examples

Aside from the categories in the template above, there are a number of other factors that employers can use to evaluate performance.

Common performance review skills:

• Interpersonal skills
• Quality of work
• Communication
• Problem solving
• Adaptability
• Punctuality and attendance
• Self-education and learning
• Accountability

Even if you want to do a basic performance review, you should always include:

• Elements of the employee’s strengths.
• Areas for which the employee can develop.
• How the employee contributes/could contribute to the company’s core values and culture through performance and actions.

This performance review mind map shows the basics for setting up a simple yet effective performance review–from setting specific goals to soliciting employee feedback.

A simple performance review should still reflect the goals of your business’s performance review management system —and this will vary by company.

It’s important to understand the purpose of your assessment before determining what information will be required to assess in order to meet the goal.

For example, some smaller companies may use performance reviews throughout the year to track employees’ development and growth.

While other, larger companies may use performance reviews to summarize employee performance, help to calculate the priorities of the new year, adjust compensation or establish bonus amounts.

An HR checklist can come in handy to streamline the process.

Simple employee review template

Each of these simple employee review templates are easy to edit in our online editor. Customize the text to match your own criteria, add your brand colors, upload your logo, add or delete pages and then share a private link or download in PDF or PowerPoint formats ( Business Plan only ).

This template uses quadrants to see how employee and manager evaluations match. Or only use it for self-assessments or manager assessments.

Simple performance review template

This more traditional performance review template focuses only on big categories, like meeting goals, areas of excellence and areas of improvement.

Simple employee review form

The below form is an even more condensed version of the above. Use it for a quarterly review to keep things focused or even for an annual review to help you and your report stick to the most important points. Change the text to include your own categories of evaluation.

Useful performance review phrases

Grappling with what to say at your next performance review? Choosing the right words is important to make the review as constructive as possible, not to mention motivating for your employee. Here’s a list of effective performance review phrases for managers and employees.

Performance appraisal comments for managers:

• She replies to calls, emails and instant messages in a timely manner (within 24 hours etc.)
• He has a talent for thinking outside the box.
• She tends to be risk-averse and prefers traditional approaches to creative ones.
• She maintains a culture of transparency in her team and encourages knowledge-sharing across all teams in the department.
• He consistently gives reports the training and resources needed to meet their goals.
• He is biased and openly favors some employees over others on his team.
• She is skillful in communicating difficult decisions and messages to her team.
• She creates chaos and miscommunication in her team by consistently communicating different messages to different reports.
• You embody a “win together lose together” philosophy.
• Your ability to reflect, plan and act is the key to your excellent performance.
• He uses his seniority to try to dominate and/or intimidate reports.
• He excels when working alone but has trouble working collaboratively with a team.
• He consistently meets his deadlines and prioritizes top goal work.
• She consistently focuses on lower-value work instead of high-lever activities.

Performance review phrases for employees:

• Can you tell me more about what you mean?
• I want to be sure I understand (your expectations).
• Let me give you a little more context here.
• What would it look like if I was performing at a top level?
• What would I need to do to score higher on this?
• Let’s discuss my goals and priorities for the the next quarter/year.
• Is there a way to get more frequent feedback about my performance between evaluations?
• How will I know if I’m on track between evaluations?

If you want to see a list of common skills you can comment on for your employees, check out this section .

What’s the purpose of a performance review?

At Venngage, our people are at the core of everything we do as a business—whether it’s developing new features on our tool, growing our international reach or meeting customer needs.

With a people-focus within our company, we are passionate about continuous learning and improvement, self-reflection, creating great customer experiences , owning our jobs, teamwork and making our office feel like a second home

It should come as no surprise that our leadership team spends a considerable amount of time at the end of each quarter conducting performance reviews with each of their direct reports.

Here are some things we’ve learned about how to conduct effective performance reviews:

• Make it clear at the beginning of a new hire’s employment how and when employees will be evaluated. This should be part of your onboarding process  and is especially important if you’re managing a remote team .
• Allow employees to prepare for their review by completing a self-assessment prior to their appraisal, then allow the employee to walk their manager through the reasoning behind their self-assessment.
• Deliver a positive and solution-focused message (whenever possible), this will result in a less discouraging message.

To make the most of the actual review conversation with your employee, it’s important to avoid:

• General, vague feedback; be specific on which behaviors you want your employee to continue, stop and explore.
• Making it personal; feedback is about actions and behavior , not the person.
• Loaded language; focus on asking what and how , not why . Enquiring why someone acted the way they did is akin to searching for a ‘motive’ and may come across as accusatory.

Create a performance review strategy before writing an employee’s review

Having an employee-friendly performance review process can not only make or break the development of your employees and but also disrupt the relationship between managers and their reports.

That’s why it’s crucial to create a robust performance review strategy and employee evaluation form before implementation to ensure the process is both constructive, celebratory and effective. This will even help you in the future if you choose to write a letter of recommendation for the employee as you’ll have all his performance reviews to reference.

By considering the six steps above when writing a performance review, you’ll have completed the final step in executing an employee-friendly review process.

The satisfaction gained from an increase in employee engagement and people power will make the effort expended on administering performance reviews entirely worthwhile, and ensure you have more effective reviews moving forward.

Take notes of the effective performance review phrases you can use during any of review sessions, as well as creating a visually appealing assessment using Venngage performance review templates. It’s free to get started.

You might also like:

• 10+ Employee Evaluation Templates to Sail Through Review Season
• 21 Essential Human Resources Poster Examples
• How to Write an Effective Incident Report [Templates]

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Home » Management Case Studies » Case Study on New Performance Appraisal System at Xerox

Case Study on New Performance Appraisal System at Xerox

In the mid-1980s Xerox corporation was faced with a problem–its performance appraisal system was not working. Rather than motivating the employees , its system was leaving them discouraged and disgruntled. Xerox recognized this problem and developed a new system to eliminate it.

The original system used by Xerox encompassed seven main principles:

• The appraisal occurred once a year.
• It required employees to document their accomplishments.
• The manager would assess these accomplishments in writing and assign numerical ratings.
• The appraisal included a summary written appraisal and a rating from 1 (unsatisfactory) to 5 (exceptional).
• The ratings were on a forced distribution, controlled at the 3 level or below.
• Merit increases were tied to the summary rating level.
• Merit increase information and performance appraisals occurred in one session.

This system resulted in inequitable ratings and was cited by employees as a major source of dissatisfaction. In fact, in 1983, the Reprographic Business Group (RBG), Xerox’s main copier division, reported that 95 percent of its employees received either a 3 or 4 on their appraisal. Merit raises for people in these two groups only varied by 1 to 2 percent. Essentially, across-the-board raises were being given to all employees, regardless of performance.

New Performance Appraisal System

Rather than attempting to fix the old appraisal system, Xerox formed a task force to create a new system from scratch. The task force itself was made up of senior human resources executives; however, members of the task force also consulted with councils of employees and a council of middle managers. Together they created a new system, which differed form the old one in many key respects:

• The absence of a numerical rating system.
• The presence of a half-year feedback session.
• The provision for development planning.
• Prohibition in the appraisal guidelines of the use of subjective assessments of performance.

The new system has three stages, as opposed to the one-step process of the old system. These stages are spread out over the course of the year. The first stage occurs at the beginning of the year when the manager meets with each employee. Together, they work out a written agreement on the employee’s goals, objectives, plans, and tasks for the year. Standards of satisfactory performance are explicitly spelled out in measurable, attainable, and specific terms.

The second stage is a mid-year, mandatory feedback and discussion session between the manager and the employee. Progress toward objectives and performance strengths and weaknesses are discussed, as well as possible means for improving performance in the latter half of the year. Both the manager and the employee sign an “objectives sheet” indicating that the meeting took place.

The third stage in the appraisal process is the formal performance review, which takes place at year’s end. Both the manager and the employee prepare a written document, stating how well the employee met the preset performance targets. They then meet and discuss the performance of the employee, resolving any discrepancies between the perceptions of the manager and the employee. This meeting emphasizes feedback and improvement. Efforts are made to stress the positive aspects of the employee’s performance as well as the negative. This stage also includes a developmental planning session in which training, education, or development experiences that can help the employee are discussed. The merit increase discussion takes place in a separate meeting from the performance appraisal, usually a month or two later. The discussion usually centers on the specific reasons for the merit raise amount, such as performance, relationship with peers, and position in salary range. This allows the employee to better see the reasons behind the salary increase amount, as opposed to the summary rank, which tells the employee very little.

A follow-up survey was conducted the year after the implementation of the new appraisal system. Results were as follows:

• 81 percent better understood work group objectives
• 84 percent considered the new appraisal fair
• 72 percent said they understood how their merit raise was determined
• 70 percent met their personal and work objectives
• 77 percent considered the system a step in the right direction

In conclusion, it can be clearly seen that the new system is a vast improvement over the previous one. Despite the fact that some of the philosophies, such as the use of self-appraisals, run counter to conventional management practices, the results speak for themselves.

• What type of performance appraisal is central to new system at Xerox? Which, if any, of the criteria for a successful appraisal does this new system have?
• Given the emphasis on employee development, what implications does this have for hiring and promotions?
• How do you think, management feels about the new performance appraisal system? Why?
• Are there any potential negative aspects of the new performance appraisal system?

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The Performance Appraisal System and Analysis: A Case Study

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