Every employee is familiar with the traditional employee performance appraisal. For many, it’s a yearly, high-stress meeting with their manager that determines whether they’ll get a promotion or a performance improvement plan. But it doesn’t have to be that way.
The real problem? Performance appraisals don’t happen frequently enough to drive real improvement. They don’t allow managers to give constructive feedback when it’s needed most, which underserves both managers and employees.
That’s why it’s time to move beyond backward-looking reviews towards something new: performance acceleration.
Key Takeaways
- An employee performance appraisal is a formal evaluation of employee performance, goals, strengths, and areas for improvement.
- Traditional annual reviews often fall short because feedback comes too late to meaningfully improve performance.
- Performance acceleration shifts the focus from evaluation to continuous improvement.
- HR teams can modernize appraisals with continuous feedback, manager check-ins, goal alignment, recognition, and development conversations.
- Modern performance appraisals should be part of a larger performance management system, not a standalone annual event.
What is an employee performance appraisal?
An employee performance appraisal is a formal meeting, usually between an employee and their direct manager, that covers an employee’s performance, their progress toward their goals, and their accomplishments. Sometimes, performance appraisals involve HR or leadership, especially when promotions are on the table.
A performance appraisal can also be called a performance review or an employee evaluation.
At its core, a performance appraisal accomplishes the following:
- Evaluating performance against expectations.
- Documenting progress towards goals.
- Identifying an employee’s strengths and improvement areas.
- Informing compensation and promotion decisions.
- Supporting employee development.
In most organizations, performance appraisals are a yearly event. In some, however, they can be as frequent as twice a year or quarterly.
Why traditional performance appraisals are no longer enough
Performance appraisals serve an essential function: aligning managers and employees on performance. They surface performance issues, highlight successes, and chart a path for future growth. But this traditional approach has its flaws:
- Delayed feedback: Because performance appraisals look back on performance, the feedback managers give typically comes weeks, if not months, after it could have been most relevant.
- Recency bias: When performance appraisals only happen once a year, the events of month 11 are fresher than those of month 2 and loom larger in a manager’s mind. This prevents appraisals from fairly evaluating the entire year.
- Inconsistent manager input: If a performance appraisal is the only touchpoint managers have to give feedback, employees get inconsistent input on their work, leaving them without clear expectations.
- Overemphasis on ratings: Some organizations use performance appraisals that focus almost exclusively on whether an employee meets expectations or not. This doesn’t encourage them to improve or get recognition for their work.
- Lack of follow-up: In many organizations, performance appraisals are a one-and-done deal. Without any action items or future commitments, they’re good for little beyond reviewing a year’s worth of performance after it’s passed.
- Limited focus on development: Employees want feedback, and performance appraisals rarely give it to them. Because appraisals focus on what’s already happened, there’s little room to discuss the skills employees want to build next.
While performance appraisals have their issues, they can serve a key role in a broader strategy: performance acceleration.
Performance appraisal vs. performance management vs. performance acceleration
These three terms might seem interchangeable at first, but they refer to distinct concepts.
A performance appraisal is a yearly, twice a year, or quarterly evaluation of an employee’s past performance. Managers and employees sit together and look back towards what an employee has accomplished and where they struggled. There are usually conversations about what an employee hopes to achieve next, but that’s not the focus of the appraisal.
Performance management is a broader system for setting goals, tracking progress, and managing employee performance. A performance appraisal is a tool within the performance management toolbox. Other tools in that toolbox include goal-setting, manager check-ins, peer feedback, and career pathing.
Performance acceleration is a continuous approach to assessing performance that focuses on improving employee performance in real-time rather than checking in once a year. If performance management is your overall strategy, performance acceleration is a tactic within that strategy. Performance acceleration involves adding more touchpoints to review performance, focusing on skill development, and guiding employees through a career path rather than discussing potential promotions once a year.
Performance acceleration isn’t meant to replace performance appraisals. Appraisals still have a key role to play. But they need to be more frequent and more holistic if they’re going to contribute to a broader performance acceleration strategy.
How to shift from employee performance appraisals to performance acceleration
Performance appraisals shouldn’t be your end-all-be-all performance management tool. Here’s how you can improve the way you use appraisals, as part of a broader performance acceleration strategy.
Move from annual feedback to continuous feedback
Annual performance appraisals force managers and employees to condense every performance conversation they should be having into a single session. Continuous feedback creates more touchpoints for managers and employees to review performance, from daily asynchronous check-ins to weekly manager 1-on-1s. This approach gives managers a real-time understanding of employee performance and employees a clearer understanding of expectations.
Connect performance conversations to clear goals
Too often, performance conversations are completely disconnected from an employee’s goals—if goals have even been set. Performance appraisals that focus exclusively on past performance give little room for employees to know what they should work on in the coming year. Managers can work with employees to set clear goals using methodologies like SMART or OKRs. From there, goal outcomes tie into career pathing and promotions.
Build regular manager check-ins into the process
Managers have a variety of check-ins at their disposal, but too few actually use them. Asynchronous check-ins, like chat app messages or emails, allow employees to share short updates and surface blockers quickly. Regular 1-on-1s can include performance conversations, giving managers a better sense of how employees are doing over time.
Use recognition to reinforce strong performance
Performance conversations shouldn’t just cover future goals or improvements employees need to make. Recognizing strengths and accomplishments regularly doesn’t just keep employees motivated, it also gives them essential feedback they can use to take on their next goal.
Make development part of every performance conversation
Performance conversations often focus on what’s already happened. A performance acceleration strategy should put as much—if not more—focus on what’s going to happen (i.e., the skills employees will build and their career trajectory).
Equip managers with better performance data and tools
With dedicated performance management tools, every check-in and performance appraisal becomes a data point in a broader trend. Managers can use these tools to analyze performance in real time, run better performance appraisals, and help employees as they move through their careers.
Want to see what a tool like this can do? Check out 15Five.
What a modern employee performance appraisal should include
An effective employee performance appraisal includes:
- Manager feedback: Managers should spend a significant portion of a performance appraisal giving their employee forward-looking feedback. It should highlight the employee’s strengths and help them chart a path towards making necessary improvements.
- Progress against goals: Clear goals allow employees to know exactly what’s expected of them and managers to track an employee’s progress throughout the year. Performance appraisals should allow for review of these goals.
- Examples of achievements: Performance appraisals should list a few of an employee’s achievements, highlighting skills they’ve built or weaknesses they’ve worked on.
- Constructive feedback: All the feedback shared in a performance appraisal should be constructive, meaning that it should help employees build towards something.
- Peer or 360 feedback, when relevant: Feedback from peers can add visibility on accomplishments and weaknesses that managers don’t see.
- Development goals: Performance appraisals should help employees identify the skills they need to build and how they can stretch beyond their comfort zone.
- Career growth discussion: Managers and employees should be aligned on career growth opportunities, and performance appraisals should contribute to this.
- Next steps and follow-up cadence: Manager and employee alike should have action items when they come away from a performance appraisal. They should also be clear on when the next appraisal will be.
Here’s what an example of a performance appraisal might look like.
Employee: Marketing Coordinator, Q2 review
Self-assessment excerpt: “I led the relaunch of our email nurture sequence this quarter and hit our 15% open-rate goal. I need to get more comfortable presenting campaign results to leadership.”
Manager feedback: “The email nurture relaunch exceeded its goal and your segmentation approach is now adopted by two other teams. This demonstrates a strong, specific impact. One area to keep building on: some campaign briefs went out without clear success metrics attached, making it harder to evaluate their results.”
Progress against goals: Open-rate goal of 15% was exceeded (18%). Stretch goal of reducing unsubscribe rate by 2% not yet met.
Development goals: Build confidence presenting results to leadership. Shadow one stakeholder meeting this quarter, then co-present the next one.
Next-steps and follow-up cadence: Revisit campaign brief template in next 1-on-1 two weeks from now. Check in on unsubscribe-rate goal at mid-quarter check-in.
How 15Five helps teams move beyond traditional appraisals
Dedicated performance management platforms empower managers to run better performance appraisals and use the results of every appraisal to support a forward-looking performance acceleration strategy. 15Five helps managers make appraisals more robust, get better data from each appraisal, and better support employees as they work towards their goals. That’s done through:
- Built-in performance reviews
- Continuous feedback support
- Goal and OKR tracking
- Manager check-ins
- Employee recognition features
- Employee engagement insights
- Manager enablement
The result? Better conversations, stronger managers, more team alignment, and continuous growth. See how it’s done with a free demo.
FAQ: Employee performance appraisals
What is an employee performance appraisal?
An employee performance appraisal is a formal evaluation of an employee’s performance, led by that employee’s direct manager. It includes a review of their goals, their strengths, and areas for improvement. It will typically also guide employees in setting goals for the coming year.
What is the difference between a performance appraisal and a performance review?
Performance appraisals and performance reviews are essentially the same thing. “Appraisal” is a more formal term, while “review” is what’s typically used by modern organizations.
How often should employee performance appraisals happen?
Employee performance appraisals typically happen annually, twice a year, or quarterly. Ideally, you should have more appraisals throughout the year, with quarterly being best. Otherwise, it’s difficult for managers to consistently track and evaluate an employee’s performance.
What should be included in a performance appraisal?
A performance appraisal should typically include:
- An employee self-assessment
- Manager feedback
- Progress against goals
- Examples of achievements
- Constructive feedback
- Peer or 360 feedback
- Development goals
- Career-growth discussion
- Next steps
Why are companies moving away from annual performance appraisals?
Annual performance appraisals have significant limitations, including:
- Delayed feedback
- Recency bias
- Inconsistent manager input
- Overemphasis on ratings
- Lack of follow-up
- Limited focus on development
Many companies are moving towards more frequent performance appraisals or continuous performance management systems that give real-time signals on employee performance.
What is performance acceleration?
Performance acceleration is a continuous approach to performance management that aims on improving employee performance in real-time, rather than through a yearly performance appraisal. It creates touchpoints where managers and employees can discuss performance throughout the year.
Accelerate employee growth
Performance appraisals still have an essential role to play as a checkpoint of sorts for alignment between managers and employees. But they shouldn’t be the only time you discuss performance.
Shifting to continuous performance improvement means using performance appraisals as a tool in a larger toolbox, supporting a performance acceleration strategy. This strategy gives managers more insight into how employees work, creates clearer expectations for employees, and gradually improves performance for the organization at large.
Want to see how a dedicated performance management tool like 15Five can support this? Learn more here.
