The performance appraisal – A strategic tool for both managers and employees

The goal of the performance appraisal is, among other things, to strengthen the collaboration between manager and employee, clarify expectations and increase the employee's motivation and commitment. Despite this, the performance appraisal is rarely something that managers or employees look forward to. Both managers and employees may perceive the interview as a formality that must be carried out. They do not necessarily see the purpose of the interview, and are left with a feeling that the content is not relevant because it does not affect them in their daily work.

Some managers are unsure of what topics to bring up in the conversation. Others are unsure of how to respond if their employee shares difficult experiences they have had at work or in their personal lives. Employees, in turn, may be unsure of what to bring up in the performance review and how they are expected to contribute.

Before you start calling for performance reviews, it is therefore a good idea to consider whether you have three important prerequisites in place. This way, you can ensure that the discussions are constructive and can be used as a tool to promote development, motivation and strengthen the working relationship:

1. Why conduct performance appraisals?

The purpose of the performance appraisal is for the manager and employee to together evaluate and discuss the employee's work situation, results and work performance. The goals for the employee from the previous performance appraisal are a natural starting point for the interview. Together you assess the employee's performance and results, and identify strengths and areas for improvement.

During the conversation, you should discuss which parts of the work situation are affecting the employee's performance positively and negatively, and what adjustments you can make to address these. Feedback from employees about improvements in working methods or the environment allows the organization to develop for the better.

Individual goals and development

As a result of the discussion, the manager and employee should together come up with individual goals that the employee should work to achieve in the coming period. The goals should ensure the employee's development, while being in line with the goals of the team and the organization. When the employee sees that the results of their work contribute to the success of the team and the organization, their commitment and belonging increase.

It is an advantage for the organization that its employees are followed up in a structured way, and that they work to update and develop their own competence. This improves the organization's ability to adapt to new demands.

Development goals and career plans

In addition to development in the coming period, the performance appraisal provides an opportunity to discuss the employee's long-term development goals and career plans. By discussing the employee's goals, the employer can contribute to these by preparing career plans, facilitating internal mobility and making good succession planning. By showing that there are opportunities for development also in the longer term, the organization can work to reduce turnover and ensure that employees are motivated.

2. Good preparation provides constructive feedback from both the manager and the employee

Both the manager and the employee are responsible for ensuring that the performance appraisal is constructive. Although the manager sets the agenda for the appraisal and is responsible for ensuring that it is carried out, it is important that the employee participates actively and provides feedback on both positive and negative aspects of the work situation. Both the manager and the employee should therefore set aside enough time for preparation in advance of the appraisal. The manager should remind their employees of this when preparing for the appraisal.

Work environment and adaptation

In the performance appraisal, both the working environment and whether the employee may need to adjust their work location or time for various reasons are discussed. The manager should be prepared for the possibility that during the appraisal, it may be revealed that there is a need for follow-up that goes beyond the performance appraisal. For example, there may be a need to use a notification routine, or the employee may need support in a crisis situation. The manager should be aware of such follow-up and, if necessary, interrupt the performance appraisal.

3. Make a plan for follow-up

Following up on the agreed goals, development areas and measures is a critical prerequisite for the performance appraisal to function as a strategic tool. Both the manager and the employee are responsible for following up on the achievement of agreed measures and goals by the agreed time. In the performance appraisal, it is a good idea to make a plan for how often it is appropriate to have follow-up interviews.

The need for follow-up after a performance appraisal will be influenced by several things. It is a good idea to talk about this and make individual adjustments to the frequency of follow-up. The employee's job type and career development, as well as the work environment and culture, can influence the need for follow-up. Employees in leadership roles, who are new to the role, or teams facing major changes, may need more support. The complexity and time horizon of the agreed goals will also influence how close follow-up is required.

Need to adjust goals?

During follow-up conversations, the manager and employee can discuss any need to adjust the goals. They can also adapt or address work situation conditions that are necessary for the employee to achieve their goals.

Continuity in follow-up will make it easier and more relevant to build on the goals from the previous conversation the next time it is time for performance reviews.