June 14, 2024
Hexavia Business Club

A Practical Guide to Employee Appraisal and Performance Evaluation

Performance appraisal

A wealthy farm owner once employed four young farm managers to work on his farmlands located in Ikorodu, Epe, Sango and Mile 2. The expectations at the end of the last 3 years were for the farmlands to yield 6500 tubers of yam. 1000 was the minimum value they expected from each farmland.

sad farmer
sad farmer

However, at each harvest time, the farm produce was consistently around 1250, 800, 2300, 2000 tubers of yam respectively. Majority of performance issues are management and people based. When things go wrong, find the root cause and treat it from the person in charge. From the findings, it was a competency issue that is unlikely to change irrespective of an improvement plan. Some hires are just wrong. Inline with this, the wealthy farmer laid off the farm manager at the Epe farm. Besides his bad performance, there were other environmental factors the farm had no control over. So the farm owner after a series of audits eventually shut down that location and divided all remaining resources between the workers at Ikorodu and Mile 2. Then, he provided more tools for the workers at Ikorodu with the expectations that they would meet the upgraded target of 1500 tubers of yam in the coming year. This is called Resource Leveling. And it can only be done from appraisals, assessment and evaluation.

Farmer equips workers
Farmer equips workers

Appraisal refers to a review instance or an even formal opportunity to analyze one’s performance at work. It is the iterative process of evaluating a person’s performance, product or services. It is usually scientific with steps that may include assessments and experiential profiling against predefined metrics. It is best when it is integrated using assessments, inspections, comparison, field-testing and feedback. Appraisals can be used as a basis for us to justify or evaluate a need for pay increases, bonuses or a performance improvement plan.

performance appraisal
performance appraisal

Beyond getting the best hands on the job in an organization, there is a need to carry out periodic examinations of the challenges and progress made so far. Progress is always relative (it is relative to a frame of reference in comparison to either a target, or other peers or even a scale. Whatever the reference is, it has to be via a time series or timeline). Every organization has its short and long terms goals and objectives to achieve. And in the middle of that are the employees. Employers need to measure the extent to which employees have been able to achieve these organizational goals. Just like the recruitment and selection process, employee evaluation also induces huge cost and effort. Hence, there is a need to execute the process carefully to avoid wastage of organizational resources.

“Over time, there have been different approaches to employee evaluation”

Traditionally, employee evaluation is a top-down process; starting from the top level management and cascaded down to the lower level. Over time, there have been different approaches to employee evaluation such as:

1. Self-assessment: Here, the employee measures his/her performance. This may be subjective, as no rational employee will conduct a poor evaluation of himself/herself.

2. Peer appraisal: Colleagues and team members are allowed to evaluate the performance of an employee. Emphasis is placed on team spirit and group cohesiveness. This approach is more preferable to the self-assessment because it covers a wider scope of evaluation.

3. Superior appraisal: In this approach to performance appraisal, prerogative centers on supervisors, heads of units and departments to measure the performance of their immediate subordinates.

4. 360 Degrees Feedback: This is an all-round evaluation process. It encompasses self-assessment, peer appraisal as well as evaluation from supervisors and heads of departments.

Essential to the performance appraisal process is a standard feedback mechanism. This allows for employees to know their ratings and also to figure out how consistent their efforts have been with the overall organizational goals and objectives.

Employee appraisal is usually time and cost inducing, but its numerous benefits are pivotal to the success of any organization. Appraisal serves as a guide to human resource management decisions, such as training, rewards, promotion or even dismissal. It also helps for resource allocation or leveling to justify equity.

define the metric and Scoring Model

Despite all the benefits extolled above, performance appraisal also has its shortcomings if not properly conducted which may affect the validity of the exercise. One of such errors is Halo Effect, which is the tendency for the appraiser to focus on one or more peculiar characteristics as a basis for assessment. In other words, it is the tendency for an impression created in one area to influence opinion in another area. Oftentimes, the concentration on these characteristics may adversely influence the overall performance appraisal process. Another error is the error of Central Tendency where the rater tries to rate all the subjects on the same subjective average. It’s like measuring all the strength of animals by how fast they are. This error will pose a problem to employees, as they may not be able to ascertain their actual or realistic performance on the job.

One of the first things to do when doing an appraisal is to define the metric and Scoring Model to apply. Take for example, for us at Hexavia and the clients we consult for, we usually ensure that appraisals are broken down into three sections:

1. Competence/ Functionality of Roles (this usually makes about 70% of the total appraisal): This refers to the main reason why the subject was employed. This is benchmarked against his/her JDs and KPIs. In this section, the subject is to be appraised by three individuals; the subject, his/her supervisor and the person’s corresponding Unit head, and HR.

2. Culture Fit- alignment with the firm’s corporate values and visions (this usually makes about 15% of the total appraisal). In this section, the subject’s direct boss/unit head appraises the subject and one other person selected via a grid.

3. Interpersonal Relationship and Leadership, which includes team spirit, relationships with colleagues, customers, and brand. This usually makes up about 15% of the entire appraisal. For us, this appraisal is usually delivered quarterly alongside a questionnaire, which makes inputs to the appraisals.

We also have in parallel a penalty grid that is also measured within the same timeline. The total score of each staff during computation is subject to if the staff has any outstanding point deductions from the penalty grid. Each penalty according to the grid in relation to the offense is assigned a point grade. The outstanding point is to be deduced from the appraisal points to get the total appraisal score.

For us at Hexavia, we have a benchmark score

Another thing you may need to consider is your benchmark score. For us at Hexavia and our clients for example, the benchmark score for an appraisal is 80%. Our score grades are 90% -A’, 80% – A, 70% -B, 60% – C, 50% – D. Also, I will suggest that the appraisal should be done quarterly. 50% for us is usually the cut off. So what you may want to define is what happens if an employee does not score above 50%?

Well for those that fall short below the 50% pass mark, we notify them. Furthermore, we engage and then put them in the corresponding improvement plan. This for us is usually followed by an assertive one on one chat, to some extent it comes even with a sanction in the first instance as agreed by the HR and the team. That is, if an employee fails to score above 50% in the first quarter we’d place him/her on a performance improvement plan. This is the Initial penalty, but when it persists for two-quarters which is six months, then we’d apply the two-strike rule. The two strike rule states that if an employee fails two consecutive times, he/she will be advised to resign or be rightly fired. But this or any method you choose should be included in the employee’s handbook and consistently communicated assertively to staff.

It is also good to have rewards for those who show peak performance from the appraisals. At our firm and the clients we consult for, beyond functional performance, we reward proactivity, innovation, actual result and hard work. For those who score exceptionally and consistently well, they are always rewarded with gifts. And when it’s consistent in two to three quarters, a promotion as well as the individual being published as the employee of the quarter/year.


One of the key challenges of appraisal is data integrity. The right metrics should be used. Reported results should be a true representation of the reality. There shall be no window dressing. To ensure this at our client’s firm, it’s usually obvious that everyone in an organization can’t score above the threshold without a direct impact on organizational performance. So we usually gauge the average individual and unit-by-unit appraisal with the unit and organizational performance. Also, where a manager or supervisor appraises everyone as aptly productive and void of errors (especially when it is obvious they are not), it affects his/her own appraisal and it will be treated as character and credibility issues, which involves likely dismissal. The line manager should be informed that there would be a penalty if appraisals are not conducted appropriately. In general, appraisal is a major part of Human Resources, especially in managing team members’ inline with organizational goals. It’s one of the uneasy parts of the work. So always bear in mind that it’s just a job you have to do. As grass grows, birds fly, waves pound the sand, you do what you have to do, consistently appraise!

Eizu Uwaoma“….none of us is as smart as all of us.. we can pull this off ”

Eizu, ©Hexavia!

Strategy. Business StartUps and Corporate Restructuring Consulting

T: 08035202891

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