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The Human Resources Institute of New Zealand

Human Resources Institute of New Zealand (HRINZ) is the professional body for those involved in Human Resource Management and the development of people.

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Performance Appraisals & 360 Degree Feedback

What is a Performance Appraisal?

'Performance appraisal' is a term used to describe the process set by an organisation to ensure all employees are aware of the level of performance expected of them in that role, as well as any individual objectives they will need to achieve to achieve overall organisational objectives.

You will find that most organisations have will have a performance management system in place; however, the difference will be whether the organisation has adopted an informal or formal approach towards their employees.

It is not uncommon for smaller organisations due to the nature of their business not to have specific documented processes in place. Any employee goals and objectives set will be mutually agreed upon between the manager and employee, generally adopting an informal approach. Larger organisations will tend to have a more formal documented process in place for managing employee performance.

It is generally considered good practice to communicate what form of performance management system your organisation uses for its employees during induction process. By the end of the induction process, the employee should be aware of their goals and objectives they need to achieve within their role to ensure they are performing satisfactorily.

Performance appraisals gives the employee the opportunity to have one-on-one time with their manager to discuss: their job performance, scope of their role, standards or targets for measuring performance, training needs and furture prospects.
The main objectives of this performance appraisal system is to provide the employee with clear feedback about overall performance in the duties they are employed to which may be linked to the overall business objectives. The performance appraisal should never contain any surprises for the employee regarding their performance, as performance management should be done with a continuous observation approach by the manager, highlighting any deficiencies the employee has as soon as possible and providing appropriate training. Errors or poor employee performance should not be stored up for the monthly or six monthly meeting.

There are no set guidelines to how and when a performance appraisal should be carried out and how often, as some organisations favour quarterly feedback meetings with their employees, other organisation's appraisals take place on a six monthly or yearly basis. With the aim that this will be a constructive year-long manager/employee relationship, as the employee performance on a day-to-day basis is more important than day spent assessing their performance on one day that year.

Generally the employee's line manager or immediate manager will conduct the performance appraisal, as they generally know their staff better as individuals and are responsible for their performance. In most organisations, a senior manager assesses and approves the appraisal outcomes to ensure operational fairness, especially if there is remuneration or performance bonuses linked. From this discussion, the employee and manager should be able to formulate and agree on a plan of training and development for the employee to participate in. This is commonly known as a Personal Development Plan (PDP). These PDP's are particularly useful documents to have your managers using, especially if you are dealing with employees who have poor performance issues which could lead to potential disciplinary action.

However, this traditionnal approach does seem to be changing due to the increasing popularity of the 360 degree feedback being used in particulary large organisations.

The concept of the 360 degree feedback is that not only does the employee have their performance and contribution assessed by their direct line manager, but also by their collegeaues, sub-ordinates, other departments and sometimes customers.
Therefore, focusing on providing feedback on employee development rather than employee assesssment, giving a full and clear circle of feedback on that employee's performance. The 360 degree feedback approach is generally used for development purposes, not formal performance reviews as you are trying to change behaviour. Any negative feedback or areas an employee may need to improve upon may be easier to be relayed to the employee as it has not come from one person's perspective, having greater reliability.

Richard Rudman states in his book, Human Resources Management in New Zealand, that 360 degree feedbacks can be used in conjunction with formal performance reviews, to contribute to decisions about pay and promotions but not used solely as the determinant.

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Disclaimer: This information has been written for and submitted to HRINZ for publication and has been published in good faith for the general information of HRINZ Members of the Institute. HRINZ accepts no legal responsibility for the contents of the Knowledge Base and appropriate professional advice and assistance should be sought in particular cases.

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