All well-managed organisations should have an effective performance management system and all managers should be involved in, and concerned with, the performance management process. Yes, you can hire bright staff with top qualifications and the right motivation and drive, but unless you regularly review their performance and ensure that their activities are aligned with your strategic goals you may not be getting as much out of them as you could. In fact, research by the management consultancy firm Deloitte shows that organizations with an ongoing focus on performance management have better business results, with

45% more likely to have above-average financial performance and

64% more likely to be effective at holding costs at or below level of competitors

The problem is that managers sometimes see the performance appraisal as an annual “tick-the-box” chore and do not conduct effective appraisals. Given the importance of the issue, the “Performance Management” course in the Edinburgh Business School MBA programme at B&B covers some of the principles managers should apply to improve the quality of their appraisals. Here they are:

1) Keep it simple: The appraisal process and the issues looked at must be easy to understand, easy to administer, quick to complete, clear and concise

2) Keep it relevant: Good appraisals should review issues related directly to the tasks and responsibilities of the job. Otherwise, they will be seen as an administrative burden and not as a tool for performance improvement

3) Capture accurate descriptions of performance: Good appraisals should provide evidence of performance regardless of the performance level. Your reviews should be sufficiently descriptive that an outside party (e.g., supervisor’s supervisor or HR Department) has a clear understanding of the performance information conveyed

4) Be comprehensive: Good appraisals should look at all the major areas of performance for a particular position for the entire review period. Try to eliminate the errors of “recency”, the “horn effect” and the “halo effect”

5) Be clear: Ensure that you clearly specify the desirable competencies and results and that all your subordinates are evaluated on the same attributes. This enhances consistency of ratings and the impressions of staff as to the “fairness” of the rating

6) Communicate, communicate, communicate: The meaning of each assessment criteria must be successfully communicated to all people participating in the evaluation process. This enhances buy-in and motivation to participate in the system

7) Keep it timely: Good reviews help clarify expectations about performance. They not only address the past but also the future. Its best to do frequent, periodic reviews and give regular feedback