The effectiveness of any appraisal system depends on the cooperation and ability of the immediate supervisor. Supervisors need to understand that appraising performance and communicating the appraisal constructively are their most important tasks as supervisors. Supervisors must learn how to give effective feedback and how to make the fullest use of specific appraisal forms. Supervisors must learn how to set goals that are fair (and not too perfectionistic) and how to communicate the goals clearly. Because supervisors are often reluctant to offer honest criticism until a performance problem is too serious to salvage, they must learn how to be more assertive and forthright.

A fair and effective performance appraisal is an ongoing process of communication between the supervisor, who is trained and assisted by human resources staff, and the employee. This process should not be limited to an annual or semiannual appraisal and subsequent interview, but rather should include all of the following:

• Clearly communicating to employees what their duties are and how to perform them. This information is communicated through written job descriptions, training, and instruction from the supervisor.

• Telling employees the criteria on which they will be assessed. The clearest way to do this is for individual supervisors to work with human resources staff to set written standards for each job and for the supervisor to meet with the employee to develop specific performance goals.

• Ongoing feedback. Whenever employee performance fails to meet expectations, the supervisor should immediately counsel the employee to identify the deficiencies and suggest concrete ways to improve performance. The supervisor should also give the employee feedback when performance is good.

• Documenting poor performance in writing. Supervisors should document instances of significant failures by employees to perform to expectations. They should also document the follow-up discussion and subsequent progress toward improvement. Superior performance should also be recognized, in written commendations.

• Formal evaluations. These should be scheduled at least annually. All evaluations should be in writing.

• Employee review. Employees should have the opportunity to review and comment on evaluations before they become final. (This can take the form of a section for employee signature and comments at the end of the evaluation form, or of a separate page for employee feedback and comments, which should include an employee's comments on evaluations that they perceive as unfair, so as to avoid resentment over a poor evaluation which may result in decreased productivity or litigation.)

• Review of written appraisals. Higher management typically reviews each appraisal.

• Counseling supervisors on their performance as appraisers. Supervisors should be evaluated on all aspects of their appraisal responsibilities, including communication of expectations, ability to recognize high and low achievers, ability to criticize constructively, and whether they judge employees fairly and objectively on their performance. Senior management should watch for supervisors who may be unwilling to give higher ratings to their subordinates than they themselves received and give feedback to supervisors that this is not acceptable.

The employee should acknowledge having read the appraisal. This acknowledgement can serve as evidence that the employee was counseled on the need to improve performance, so the employee is unlikely to dispute this in later litigation or a grievance. The employee will be permitted to comment in writing, explaining any disagreements with the appraisal before signing. If an employee remains unwilling to sign, the best approach is for the supervisor to write on the appraisal document that the employee was shown the appraisal on such and such a date and refused to sign. The human resources department will follow up a refusal to sign by contacting the employee to determine the basis for his or her objection to the evaluation and making a record of the employee's explanation. This approach demonstrates the company's intent to assure fair treatment for all employees.

The more employees are involved in the appraisal process, the better the opportunity to use it to improve performance. Employee input gives appraisal legitimacy and can persuade the employee to commit himself or herself to making specific improvements. Employee involvement can take several forms, such as encouraging the employee to respond in writing to the appraisal, asking the employee to list achievements before the supervisor writes the appraisal, encouraging the employee to bring up performance-related questions and issues for discussion at the appraisal interview, or involving the employee in setting performance objectives.

Base the appraisal on the typical performance of the employee during the entire period. Be careful not to overemphasize recent happenings or isolated dramatic incidents that are not typical of the employee's normal performance. Base appraisals on accurate data obtained from records whenever possible or from careful observation when this is not possible. Compare the performance of the employee being appraised with the performance of all individuals who have performed the same job, keeping in mind the requirements of the job. Do not let your appraisal on one factor influence your appraisal on other factors. Many people have a tendency to give an employee who rates very high on one factor a higher rating on other factors than may be merited. In like manner, when an employee is weak in one respect, the person doing the appraising sometimes assumes the employee is weak in other respects, which may not be the case. Bear in mind that each factor should be considered independently of the others. Do not permit grade of job or length of service to affect the rating. Consider only the performance of the employee in relationship to the specific requirements of the job. Do not rate an employee too highly just because the employee has a number of years of service, but really performs at an average rate. Do not let your personal feelings bias your appraisal, nor should you rate "sympathetically." The appraiser must be constantly on guard against the normal inclination to attribute greater proficiency to employees well-liked personally or to employees because of sympathy. If there are special circumstances, appraise only on performance and explain the circumstances in the space provided under each factor. Do not be swayed by a previous appraisal. Each appraisal should be completed without referral to past appraisals. Substantial differences do not necessarily mean that the present or the previous appraisal is incorrect. Guard against letting your appraisal of factors fall into a consistent or routine pattern. There are usually wide differences in individuals with respect to the various factors considered. Do not make an appraisal on vague impressions. To rate accurately, you must have a very good knowledge of the employee's performance. Always stick to facts and refer to records, where available. Do not appraise too quickly. Take enough time to appraise accurately. Do not hesitate to go on record with your true opinion. A good appraiser should be able to differentiate between the performances of his employees.

There are a number of reasons why it is important for an employee to receive an honest evaluation of his or her weaknesses and strengths. Honest criticism tells the employee what he or she should do to improve performance. The supervisor can help the employee to recognize those areas in which his or her work falls short of meeting the needs of co-workers or customers. When an employee is performing less than adequately, but his or her supervisor believes he or she deserves another chance, it is vitally important that the supervisor says just this on the evaluation form. The supervisor should give a clear explanation of what is wrong with the employee's performance and indicate that he or she is willing to work with the employee in a joint effort to achieve improvement. Giving the employee an honest evaluation helps the employee by letting him or her know fairly and honestly where he or she stands and giving the feedback he or she needs to improve. The supervisor also helps the company by:
(1) lessening the chances of unjustified lawsuits from disgruntled employees whose sudden dismissals are unexpected;
(2) enabling the company to prove the fairness of a dismissal if the employee does bring suit under the Equal Employment Opportunity Act or other state or federal laws;
(3) recognizing the contributions of satisfactory employees by distinguishing their work from the work of poor or marginal performers; and
(4) in some cases enabling the problem employee to improve.

Thus, it is vital to remember that performance evaluation is a very important part of a manager's job. An attitude of honesty and fairness is essential.