Ask managers which part of their role they find most troublesome and they are likely to talk about managing the performance of people. There is general agreement that managing poor performers is the hardest part.

Performance appraisal has long been one of the most important tools available for managing performance. Over the years HR people have probably expended more time and energy on designing and redesigning performance appraisal systems than on any other aspect of their function. Currently, there are 295 million sites listed under "managing performance" on Google!

Still, most people agree that an annual performance appraisal is something to be dreaded or avoided. How well does your appraisal process work? There are three aspects you should consider. The first two are important, but the success of the whole process hinges on the third.

The process and documentation

Most companies have a carefully designed and communicated process. Appraisal schedules have been agreed, documentation is standardized, it is all available on the intranet. If there is any fault it may be too well designed, too detailed, too systemized. Do managers and employees find your appraisal process user friendly?

How the data is used

Employees often complain that appraisals have no impact and so carrying them out seems a pointless exercise. Do yours feed into decisions on training and development, transfers and promotions? Is performance fairly linked to remuneration? Does the process distinctively reward top performers and sanction those who do not perform?

Quality of conversation

The quality of the conversation between manager and employee makes all the difference between effective and ineffective appraisal. How well do managers in your organisation handle conversations on poor performance? How good are their coaching skills? Do they encourage employees to speak up with ideas and opinions? Do they listen?

We have designed a set of short questionnaires to research the views of HR people, managers and employees on performance appraisal. If you would like a free analysis of the views in your organisation send us an e-mail.