Performance Appraisal Cycle

Performance appraisal doesn't start with the form, it starts with the jobplanning what needs to be done and figuring out how it will be accomplished.

Dick Grote, wrote in his book, The Complete Guide to Performance Appraissal, that there is an ideal cycle. He wrote that, the ideal performance appraisal cycle is thus a five-phase process, beginning after the organization has established its corporate strategy and overall direction.


Phase I: Performance Planning
The appraiser and appraisee meet to plan the upcoming year. In their discussion(s) they come to agreement about five major areas:

1. The key accountabilities of the subordinate's jobthe major areas within which the subordinate is responsible for getting results
2. The specific objectives the subordinate will achieve within each accountability area
3. The standards that will be used to evaluate how well the subordinate has achieved each objective
4. The performance factors, competencies, or behaviors that will be critical in determining how the results will be achieved
5. The elements of the development plan the subordinate will complete during the year

Phase II: Performance Execution
Over the course of the year the subordinate executes the plan agreed to in Phase I. During this time the supervisor is responsible for ongoing feedback and coaching. Elements of the plan that become obsolete are abandoned by mutual agreement; new objectives to respond to changing conditions are established.


Phase III: Performance Assessment
Appraiser and appraisee independently evaluate the degree to which the different elements of the plan were achieved. The manager completes an assessment of the subordinate's performance (the classic performance appraisal report card) and typically has it reviewed and approved by senior management and human resources personnel before discussing it with the subordinate. In an ideal system, the subordinate also completes a self-assessment, collecting data, if necessary, from customers, peers, subordinates, and others.

The subordinate may submit the self-appraisal to the manager to be used as part of the manager's overall assessment, or the manager and the subordinate may review each other's appraisal of the subordinate's performance concurrently as part of the Phase IV discussion.


Phase IV: Performance Review
The appraiser and appraisee meet to review their appraisals. They discuss the results that were achieved and the performance factors that contributed to their accomplishment. Phase III was the creation of the report card; Phase IV is its delivery and discussion. Their discussion includes:

• Results achieved (what was done)
• Performance or behavioral effectiveness (how it was done)
• Overall performance assessment
• Development progress

At this meeting the appraiser may discuss compensation changes, or this discussion may be held during a separate meeting at a different time. (Chapter 14 focused on the relationship between pay and performance appraisal and the benefits and disadvantages of combining the pay and appraisal discussions.)

Phase V: Performance Renewal and Recontracting
Phase V repeats Phase 1, incorporating the additional data and insights gained during the previous appraisal process. The manager and subordinate revise any of the subordinate's key accountabilities that may have changed over the year and set new objectives and standards for the upcoming appraisal period. Finally, they create updated development goals and action plans.

The performance management cycle that Dick Grote wrotes, reinforces a critical concept: Before even the most preliminary activities that are commonly considered part of the performance appraisal process can be undertaken, the organization must first have its mission clearly defined. If the organization doesn't know where it wants to go, herculean efforts on the part of organization members won't provide direction.