Streamlining the Performance Appraisal Process through Workflow Automation

Business productivity is directly proportional to the performance of its employees. Aren’t we stating the obvious? Employee skill and performance impact the productivity of an organization. How does one assess the performance of employees? The performance appraisal process is the most effective tool that organizations can use to evaluate and quantify the performance of employees. The performance appraisal workflow is a sequence of activities that an organization has to undertake to evaluate employee performance. What is a performance appraisal? What are performance appraisal methods? This blog explores all these aspects of employee performance appraisal. 

Understanding the Performance Appraisal Process

What is a performance appraisal? What does the performance appraisal process workflow entail? To put it simply, the performance appraisal workflow is a systematic and periodic process that measures an individual’s performance against the established standard requirements of the job. The performance management appraisal process is a subjective evaluation of employees’ strengths and weaknesses, their relative worth to the organization, and future development potential.  Employee performance appraisal processes are also referred to as performance evaluations, performance reviews, employee appraisals, or development discussions. Performance appraisal is a regular and structured method of assessing an employee’s job performance against preset job expectations. The employee’s strengths and areas of improvement are subjectively evaluated to determine if they meet the expectations of the employer, their exclusive contributions to the organization (apart from regular work), and their potential to enable future growth and development.  While we talk about employee appraisal, the 360-degree appraisal would definitely cross your mind. A 360-degree appraisal is an all-encompassing employee evaluation method that collects anonymous input from co-workers, supervisors, and subordinates to provide employees with comprehensive and constructive feedback on their performance. The employee performance appraisal process is crucial for the organization to boost employee productivity and improve their outcomes. The performance appraisal is an annual process where employee performance and productivity is evaluated based on several factors. Streamlining the performance appraisal process is extremely important for the organization for 2 reasons – one is that it helps determine the employee’s wage revision and promotion, and the second reason is that it helps evaluate the employee’s skills, strengths, and shortcomings accurately.  Despite the importance of the performance appraisal process, it has been rarely put to use by existing appraisal systems that fail to internalize employee performance results. In order to derive full value out of performance management methods, HR managers need to revisit the existing processes and streamline them with the help of modern technology like workflow automation.

How do Performance Appraisals Work?

So, how does performance appraisal work? The human resources department in an organization creates performance appraisals for assessing employee performance and also uses it as a tool to help them advance in their career. Performance appraisal and feedback techniques give people feedback on how well they are performing their jobs, ensuring that they are managing and achieving the goals that are set for them. Performance evaluation tools can be used by employees to track if they fall short of achieving their goals and by how much.  These evaluations are useful in determining the optimal way of distributing the company’s budget by way of incentives like bonuses and salary raises. They also give businesses a tool to identify the workers who have made significant contributions to the growth of the company, which helps in awarding appropriate rewards. Performance reviews also assist employees and their managers in identifying potential for improvement and career development by planning additional training sessions and awarding additional responsibility.  Performance appraisals play a dual role in any organization. For organizations they provide insights into an employee’s contribution, enabling management to improve working conditions, address behavioral issues, recognize employee talents, and support skill and career development. The insights provided by these tools also aid strategic decision-making. For employees, performance reviews are a great way to evaluate their skill level and identify areas of improvement. Based on the results of performance appraisals, employees can enroll in appropriate training and development programs to upskill themselves and advance in their careers. The insights derived from their performance appraisals help them plan and achieve long-term career goals.  Decisions regarding transfers, promotions, terminations, etc, can be taken based on performance appraisal data. Employers can make informed decisions on the probation period of employees/contractors. Decisions on raising an employee’s salary, offering incentives, or changing the variable component in the salary structure, can be comfortably taken based on the inputs derived from performance appraisal discussions. A streamlined appraisal process also helps gather employee information and keep records for future use.

Objectives of Performance Appraisal

The main purpose of conducting performance appraisals is to continuously improve the organization’s performance and workplace culture. The other objectives of conducting performance appraisals are- 

Identifying how each employee can improve their role –

Building a sustainable career requires employees to update and upgrade their skills. Employees need to develop additional skills to perform better at their jobs. Identifying the skills required for better performance can be done with the help of performance appraisal tools. Improving these skills can be done through targeted training. In some cases, updated equipment or software might be necessary. The performance appraisal process helps determine and document these needs. 

Identifying strengths and improvement opportunities –

Which areas are the departments lacking? Do they require additional staffing budgets or additional equipment? Answers to these questions can be derived from the performance appraisal process. 

Determining the best way to allocate rewards, promotions, and resources –

Performance appraisals help determine which employees are most deserving of rewards and promotions. An analysis of performance appraisals reveals which employees and departments would benefit from which resource. 

Documenting employee performance –

Clear documentation of all the steps in the appraisal process is a must. This data helps in making key decisions regarding promotion, disciplinary action, or termination. Formal performance appraisals provide the documentation required for making objective and defendable future decisions. 

Gathering the tools required for future performance goals –

The goals and benchmarks that have been achieved by your company in the past are a good indicator of what goals need to be set in the future. The manner and the speed at which these goals have been achieved sets the tone for future achievements. 

Strengthening employee engagement –

Receiving constructive feedback encourages employees to focus on implementing the discussions from appraisals. The feedback from appraisal discussions helps identify growth opportunities within the organization and keeps employees engaged. Constructive criticism also makes employees feel valued and motivated to stay longer with the organization. 

Closing skill gaps and boosting organizational performance –

Identifying improvement opportunities, setting goals, and creating employee growth plans, can be effectively done with the help of the inputs gained from the employee appraisal process. These inputs help organizations close skill gaps, gain competitive advantage, and prepare for the future. 

Types of Performance Appraisals

There are mainly 4 different types of performance appraisals as discussed below. 

1. 360-degree appraisal

As mentioned above, 360-degree appraisal is a comprehensive appraisal system that gathers information on the employee’s performance with the help of a questionnaire sent to supervisors, co-workers, and self-assessment. As the name suggests, this is a complete evaluation that not only focuses on individual performance but also on contributions to the team and organization. 

2. Negotiated appraisal

In this type of appraisal, a mediator is involved to help evaluate the employee’s performance. The main focus of this appraisal is on the better parts of the employee’s performance. Before offering any criticisms, the reviewer highlights the strong points in employee performance. This type of evaluation is useful in situations where there is tension or disagreement between the employee and manager. 

3. Peer assessment

As the name suggests, this type of appraisal gathers information on employee performance from their peers. Employees write feedback on their fellow employees during performance evaluations. This system is designed to monitor and improve performance and is usually carried out by the same team of colleagues each time. Supervisors and managers are usually excluded from the peer appraisal process. Peer appraisal can be conducted in different forms based on the objective of review. Single-blind, open peer appraisal, and collaborative peer appraisal are the different types of peer appraisal. 

4. Self-assessment

In this type of appraisal, employees rate themselves in categories such as work behavior, attitude, and job performance. This type of appraisal provides an accurate view of your professional work and helps you focus on your career objectives. This encourages you to focus more on goal achievement, competency, and skill development. Self-appraisal is usually done by filling out a questionnaire that reflects on your achievements, your struggles, and challenges you came across and your contribution to the team and organization. To derive maximum benefit out of self-evaluation, the inputs have to be honest and should include highlights and low-lights that occurred during the evaluation period. Some organizations use several appraisal types during the same review. For example, a manager could consult with the employee’s peers and assign a self-assessment to the employee. However, it doesn’t have to be a case of either/or.

Steps in the Performance Appraisal Process Workflow

When performance appraisal is conducted efficiently, it will automatically encourage open conversations between you and your employees. This will in turn boost employee performance, employee engagement, and work outcomes. However, when the performance appraisal process is not well planned and executed, there is always concern and confusion on what step comes first and which comes last. Having a clear idea on the performance management process steps sequence is a must for the performance appraisal and feedback techniques to work well. The performance appraisal process is very much customizable depending on the way you approach it based on the leadership style within your organization. You can implement a single performance appraisal method or combine multiple appraisal methods for each performance review. Irrespective of the method/s you choose for your performance appraisal process, here are the main steps in the performance appraisal process – 

Defining the performance criteria –

In performance evaluation, performance criteria essentially mean performance standards. The first step in the performance appraisal process is to set clear performance standards for each job position to ensure that the employee’s performance is fulfilling the mission and vision of your company. This criteria is usually derived from the job description for that role, employee handbooks, or objectives that were set at the start of an employee’s journey with the company.  While defining performance criteria, make sure that the criteria are clear and measurable. Each task must have a clear goal associated with it and the goal must be measurable and achievable within a certain period of time. Having clear performance criteria will help you and your employees to look back on their performance during the appraisal discussion and assess how their actual performance aligns with the performance criteria. Clarity in defining performance criteria will help you identify the areas of strengths and areas for improvement and collaborate to improve work quality and process outcomes. 

Communicating performance standards –

The hallmark of an efficient employee performance appraisal process is clear paths for communicating the performance standards to employees and ensuring that they understand the expectations of the role. The best type of performance appraisal involves two-way communication between employers and employees that makes sure that any questions or concerns of employees are addressed adequately and they have the space to discuss all performance standards. Employees must be allowed to give feedback on their set goals and what is achievable for them. They must also be able to clearly communicate their approach towards fulfilling the expectations and the support expected from the employer.  When performance standards are communicated to employees, employers can also discuss the training opportunities that can help improve an employee’s job performance and career development. Being clear on training requirements helps employers organize appropriate training programs. 

Measuring Performance Progress –

Once performance standards are clearly communicated to employees, follow-up must be done by measuring their progress against these standards. Regular assessment of weekly, monthly, and quarterly targets is an essential part of the performance review process. The frequency of assessing employee performance is decided based on how it affects the business achievement. The performance level of employees has a bearing on the frequency of assessment. If progress is at a steady rate, then the frequency of assessment can be reduced. But, if you notice that they are falling behind, then more frequent follow-ups and frequent reminders are needed. 

Comparing performance progress with performance criteria –

Every employee is unique and develops at their own pace. Therefore, comparing employees’ performance against each other is not a good idea. This is not only ineffective, but also gives rise to conflict, tension, and demotivation. It is a better idea to compare the progress of goals against preset performance criteria. This promotes a positive mindset and encourages employees to compete against one another. Such a comparison enables them to reflect on what roadblocks or obstacles they are facing and also understand what was helpful in boosting their progress over time. Comparison with preset performance criteria also helps you stay unbiased during performance evaluations. The progress can be compared with an established reference and pinpoint exactly where improvement is required. 

Discussing performance results –

The best time to provide regular feedback to employees is during the performance appraisal. During the appraisal discussion, it is better to offer constructive feedback, rather than negative criticism. The approach must be to reward each employee for their achievements and encourage them to keep up the good work for future success. The performance feedback must be expressed in a professional and positive manner. Bear in mind the learning and development opportunities that can be explored to improve organizational performance. Focus on the skill gaps, improving training quality, and including new skills within the team. 

Ending with a follow-up plan –

The last step in performance appraisal is to create an effective follow-up plan based on the discussions during the appraisal. The performance appraisal does not end with the conversation, regular learning and improvement opportunities need to be explored for future success. Regular follow ups are required and essential to keep employees on track and measure their progress. Create larger goals that are centered on employee success and come up with a concrete plan of action. Encouraging employees to invest in their own development by setting personal goals for themselves is a good performance appraisal strategy.  At the end of the appraisal process, both the employer and employee must feel that they have come full circle. Goals are set, expectations are clear, and a plan of action is ready at the end of the performance appraisal workflow. 

Performance Appraisal Methods at a Glance

Performance appraisal and feedback techniques come in many forms and colors. Managers and human resources staff conducting appraisals need to choose the best methods based on the size of the organization and the responsibilities of employees. Popular performance appraisal methods are listed below- 

720-Degree Feedback

As the name suggests, this method can be considered as a double-up of the 360-degree feedback method. This method gathers feedback from internal and external sources. In addition to internal resources that include peers and managers, this method gathers feedback from external sources that include investors, customers, suppliers, and other finance-related groups. 

Assessment Center Method

This method consists of exercises conducted at the company’s designated assessment center. The assessment center is equipped with computer simulations, discussions, role-playing, and other evaluation tools. The evaluations that happen at assessment centers include communication skills, emotional intelligence, confidence, mental alertness, and administrative abilities. The rating is based on observations of the proceedings at the assessment center to evaluate the employee’s performance. 

Checklist method

This is a rudimentary evaluation method that simply lists a series of questions that make up a checklist. These questions usually have yes/no answers. 

Behaviorally anchored rating scales (BARS)

This is an appraisal method that measures the employee’s performance and compares it with specific established behavior examples. Each of the examples listed under this assessment method has a rating based on which data is gathered. 

Critical incidents method

Critical incidents could either be good or bad. Irrespective of the case, the supervisor takes into account the employee’s critical behavior into account. 

Customer/client reviews

This type of evaluation is best suited for employees who play a customer-facing role and offer goods and services to customers. The manager asks clients and customers for feedback on the services provided to them. Evaluation criteria for external feedback would be based on how the employee is perceived by the client, the manner in which business is conducted, and value for money derived by the client through these services. 

Field review method

This type of performance appraisal is conducted by the HR department or corporate office representatives. Employee performance evaluation is conducted by these departments. 

Forced choice method

In this type of performance appraisal method. The employee is asked a series of prepared True/False questions that evaluate their performance. 

General performance appraisal

This appraisal method involves continuous interaction between the manager and the employee. During these interactions, goals are set and performance is assessed regularly to ensure that these goals are met. 

Human resource accounting method

This is alternately called the accounting method or the cost accounting method. This method mainly looks at the monetary value that the employee brings to the business. The monetary value that the employee brings to the business and the company’s cost to retain the employee is assessed by this method. 

Management by objective

This appraisal process involves the employee and manager working together to identify goals for the former to work on. Establishing clear goals and objectives and discussing the progress that the employee is making to meet these goals are part of the management by objectives process. At the end of the management by objective method, the manager evaluates whether the employee has achieved the goal. 

Performance Tests and Observations

Managers conduct an oral test to measure the employee’s skills and knowledge in their respective fields. In some situations, the evaluator may pose a challenge to the employee and have them demonstrate their skills in solving the problem. 

Project evaluation review

Performance appraisal is done at the end of every project, not at the end of the business year. The performance of the employee from the start to the end of the project is evaluated in the project evaluation review. 

Rating scales

Rating scales are used to measure the dependability, initiative, attitude, etc. of employees. The ratings range from excellent to poor on the rating scale. The ratings derived are used to calculate the employee’s overall performance. 

Automating the Performance Appraisal Process

Old-fashioned ways of conducting performance appraisals entail huge volumes of paperwork, tedious processes, and stress for the HR department. Year after year, the HR department spends way too much time and effort on conducting performance appraisals the conventional way. Not just the effort, but conventional performance appraisal processes are also subject to human bias. The chances of a fair appraisal are minimal in a manual appraisal system.  Automating the appraisal process saves time and effort for the HR team, and also frees the process from the inherent bias of manual appraisals. Moving the entire process online and automating it saves the HR team from a clunky appraisal process. Apart from conducting performance reviews, performance evaluation tools can also be used for gathering 360-degree feedback, setting and tracking performance goals, and monitoring employee performance from time to time. Making the appraisal process more effective does not require a high-end HRMS, a simple workflow can do the job. A no-code BPM workflow automation solution like Cflow can automate the performance appraisal workflow.  The visual workflow designer in Cflow can create workflows for key business processes without having to write even a single line of code. Once the workflow is created, it can be used to automatically conduct appraisals. There are several benefits of automating the performance appraisal process. One is that it streamlines the entire process to eliminate bottlenecks and redundancies. The efficiency of performance appraisal is greatly improved by automating the appraisal process. The capability of performance appraisal tools is not restricted to performance evaluation, it extends to succession planning and identification of potential skill gaps. Another benefit of automating the appraisal process is that no performance review will slip through the cracks.

Top 10 Performance Evaluation Tools

With 2023 coming to a close, organizations must be busy revisiting their organizational goals to analyze what worked right and what didn’t in their policies and processes. Relying on archaic methods for appraising employee performance is not only ineffective but also prone to redundancies. Using performance evaluation tools makes employee performance appraisal more effective and creates a positive impact on employee engagement. Before you decide on the performance evaluation tool for your organization, we suggest you go through this list of top 10 performance evaluation tools that make performance appraisals more effective and easier.

1. Cflow

Automating the performance appraisal workflow is the most efficient way of conducting performance appraisals. Cflow is a no-code workflow automation tool that simplifies the automation of the performance appraisal process. To create the workflow, you need to use the visual form builder for creating appraisal workflows. In the workflow, you can include visual elements to represent every aspect of the workflow and the dependencies between tasks. There is no need to write even a single line of code in Cflow, you only have to drag-and-drop the visual elements to create workflows. In Cflow you can access documents easily and quickly from the centralized document management portal. If you are looking for a hassle-free and effective performance appraisal process, then Cflow is your go-to tool. 

2. Deel

This is a comprehensive HR platform that combines payroll, onboarding, offboarding, document, and workflow management, under a single platform. Businesses can use this tool to hire and manage employees and contractors from over 150 countries. The company acts as an employer of record so you can hire internationally without the need for a local entity. This software can be integrated with Slack, which enables you to monitor employee engagement levels and track all the 1-on-1s under a single platform. Centralized access to key information allows you to monitor employee engagement levels with pulse surveys. 

3. Trakstar

This is the most suitable software for connecting all stages of the employee cycle. Organizations that are interested in comprehensive performance appraisal must consider Trakstar. You can manage performance reviews, employee engagement surveys, and 360-degree multi-rater feedback for hundreds to thousands of employees. This software however lacks third-party integration support. 

4. Workleap Officevibe

This performance appraisal tool is highly effective in gathering continuous feedback including anonymous options. Officevibe is an employee experience platform that is mainly focused on improving performance management and employee engagement. Managers and teams can use this tool to stay connected and promote continuous feedback and effective communication. 

5. Primalogik

This software is best suited for collecting and analyzing 360-degree feedback. Promalogok’s software provides a wide range of features that enable employee engagement and empower managers to reach their full potential. This software combines performance review assessments, 360-degree feedback, engagement surveys, objectives and key results, and instant goals. The 360-degree feedback module makes it easy to solicit feedback from multiple sources. 

6. ClearCompany

This software simplifies and automates HR workflows. ClearCompany is an easy way to bring all of your employee performance review processes under a single, automated solution. The easy-to-use dashboard lets you quickly set up reviews, custom scoring tables, free-form responses, and weighted sections. The flat-rate pricing model allows companies to send as many performance reviews as needed at any frequency. 

7. Paycor

This is a good SaaS solution for efficient performance management. Paycor is a comprehensive SaaS product that offers a host of HR tools like payroll, recruiting, onboarding and offboarding, and time and attendance. The user-friendly interface and robust functionality make it easy to navigate and access different features offered by the software. Useful features offered by this software include detailed analytics, tracking of data trends, and real-time report generation. 

8. PerformYard

This is best suited for a customized performance review process. PerformYard’s performance management software provides flexible features for the HR team and a simple employee experience. HR teams can use these tools to build out any performance strategy while employees get a streamlined experience so they can focus on quality feedback and effective performance discussions. The software can be customized to fit the strategy that is right for the organization. This software provides a simple employee experience that facilitates feedback and quality conversations. 

9. Leapsome

This software is best suited for employee development-oriented performance management. Leapsome is an all-in-one performance management and employee engagement tool that helps organizations enhance their management processes. Top companies like Babbel, Northvolt, and Spotify have chosen Leapsome to manage their performance management cycle. The 360-degree views provided by Leapsome are completely customizable and simple to set up. Highlights of the performance management features offered by this software include anonymous/mom-anonymous feedback, expert templates, automation, powerful analytics, and skill frameworks.

10. Lattice

This software is suited for incorporating multiple feedbacks. The performance management platform in Lattice is designed to help organizations groom employees into high performers and with tools to help them set, monitor, and accomplish their individual and professional goals. Integrated solutions offered by Lattice help organizations manage objectives and key results, and objectives. Lattice also supports project-based reviews. This tool can also be used for analyzing employee engagement by way of surveys, pulses, and eNPS ratings. Lattice’s performance management software includes modern features like continuous performance feedback loops, 1:1 templates, and 360-degree feedback. This software can be integrated with commonly used human resource information systems like ADP, BambooHR, Namely, Rippling, and Workday. Lattice can also integrate with popular software platforms like Google Mail, Microsoft Teams, Slack, Outlook, and others.

Key Takeaways

Just as the performance of a business process needs to be evaluated continuously, employee performance appraisal also needs to be conducted on a regular basis. Why? Performance appraisals help managers and leadership to assess employee performance and compare it with established performance standards within the organization. The results of performance appraisals help in determining employee’s performance levels and their contribution to the overall organizational growth. Growing organizations need to focus more on effective employee appraisal since the feedback gathered from appraisals can be a game changer for the company. A no-code workflow automation software like Cflow can turn things around for the performance appraisal process. The automation features that this software has to offer not only simplify the appraisal process but also make it more effective. Would you like to take Cflow for a test drive? Sign up for the free trial to see Cflow in action.