The Performance Appraisal Tool Kit: Redesigning Your Performance Review Template to Drive Individual and Organizational Change

The Performance Appraisal Tool Kit: Redesigning Your Performance Review Template to Drive Individual and Organizational Change


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The Performance Appraisal Tool Kit: Redesigning Your Performance Review Template to Drive Individual and Organizational Change by Paul Falcone, Winston Tan

A well-crafted performance plan has the power to dramatically impact a company's bottom line by increasing efficiency and effectiveness in the workplace. This uniquely practical book provides a customizable appraisal template covering the essential areas of performance and conduct and reveals how you can adapt it to fit varying business strategies. Taking into account factors such as workforce composition, company growth stage, and organizational goals and challenges, The Performance Appraisal Tool Kit shows you how to: * Profile ideal employee performance and behavior * Design competencies that power performance, both at the individual and enterprise level * Drive future change by setting your organization's strategic direction * Retool the appraisal as needed to ratchet up expectations over time Complete with model performance templates that make redesigning your current program simpler, this one-of-a-kind guide will help you create a dynamic appraisal system that's flexible and adaptable enough to accommodate market changes, revised priorities, and increasing productivity targets. This book is approved for HRCI Recertification Credit. See the SHRM store website for details.

Product Details

ISBN-13: 9780814432631
Publisher: AMACOM
Publication date: 05/15/2013
Pages: 256
Sales rank: 786,584
Product dimensions: 7.30(w) x 9.10(h) x 0.70(d)
Age Range: 18 Years

About the Author

Paul Falcone ( is a human resources executive in Los Angeles and has held senior-level positions with Nickelodeon, Paramount Pictures, and City of Hope. He has extensive experience in entertainment, healthcare/biotech, and financial services, including in international, nonprofit, and union environments.

Paul is the author of numerous bestselling AMACOM and Society of Human Resource Management (SHRM) books, and four of his books have made SHRM’s prestigious “Great 8” annual bestseller listings. He is also a long-term contributor to HR Magazine, a top-rated presenter at the SHRM national conference, and an adjunct faculty member in UCLA Extension’s School of Business and Management.

WINSTON TAN is a consultant specializing in human resource performance development and Managing Principal of InTandem, LLC.

Read an Excerpt


Redesigning Your Performance Review Template to Drive Individual and Organizational Change

By Paul Falcone, Winston Tan


Copyright © 2013 Paul Falcone and Winston Tan
All rights reserved.
ISBN: 978-0-8144-3263-1



Why It's Time to Stop Complaining and to Start Building the Right Performance Measurement System That Can Transform Your Company

THE CURRENT SYSTEM of performance appraisal used in most companies relies on outdated information and technologies that don't deliver the payoff you want or need. And the "you" in this case refers to employees, supervisors, and senior company executives. There's a disconnect between true "performance management" and the system we've all allowed ourselves to become accustomed to—i.e., an administrative and bureaucratic exercise used simply for justifying merit increases.

Merit pools have been very tight for the past decade or so, tying in to a Consumer Price Index (CPI) that has barely edged upward since the new millennium began. Since merit increases tend to keep up with inflation, the minuscule budgets have made it difficult to differentiate and truly reward top performers with some sort of financial carrot. Indeed, the only way for most U.S. workers to get ahead has been to either leave the company for greener pastures or try to get promoted internally; otherwise, the merit pools themselves leave very little to inspire and reward top performance for those who have remained in place.

Software solutions can be helpful in getting front-line supervisors to find the proper wording to describe their team members' performance, but let's face it: Most software doesn't allow for much customization, and if the performance categories, or "competencies," don't accurately reflect what you're trying to measure as an organization, the whole exercise turns out to be a bust. After all, how could it be that the same form gets passed down in most companies—generation after generation—without so much as a tweak to reflect the enterprise's changing priorities? Software programs can't fix that, so until the content becomes more insightful and strategic, the program will remain shortsighted in terms of its ability to accurately reflect the strength of your organization's human capital muscle.

If the performance review programs employed by most organizations are sorely lacking and way out of date—akin to an analog land-line telephone in today's proliferating smart phone technology—how do we move the pendulum forward? We're glad you asked....

We have to assume that the rapid pace of change stemming from technology, globalization, and the overall economy requires companies to change quickly, and the performance review template—as a measure of the company's assessment of its workforce muscle or "human capital asset"—must change by definition every year or every few years to reflect a company's changing priorities. In other words, if the format and performance factors aren't being upgraded relatively often to reflect the organization's changing needs and priorities, then you can stop right there: The program will be viewed as a big disconnect.

To make this whole exercise of evaluating, developing, and strengthening human capital worthwhile, the format must be flexible and capable of integrating changing parts. Those changing parts reflect the company's newest priorities—its opportunities, threats, and weaknesses—so that everyone on the team is trimming the ship's sails to move in the same direction and working together toward a common goal.

It's more than just about the format and structure of the appraisal template, however. The content of the performance descriptors must be raised to heighten performance expectations as well. How many times do you read a typical performance appraisal form and think, "This is so ho-hum. Is this really all we're expecting of our employees? And how could it be that the same content is contained in evaluations that cover early career administrators vs. technical and professional experts vs. senior leaders? They all have vastly different skills, knowledge, and abilities, and this one form doesn't even come close to measuring the differences in the impact they make or what we expect of them."

As a society, we've missed the mark in associating the annual performance review with the merit increase. Don't get us wrong—performance should be tied to merit pay. Our mistake in corporate America has been in allowing the degree of linkage to distort the program. In other words, performance management is a critical leadership tool that helps companies and executives build stronger teams of engaged workers who find new ways of reinventing themselves and creating value. Whether you've got 10 percent or 1 percent in this year's merit pool, the performance management piece shouldn't really change: You're still using the system to motivate, reward, and develop talent. After all, you can't control how much your company sets aside for the merit pool in any given year, but you certainly can control the way you motivate, recognize, and acknowledge your team members' contributions. This whole process is about recognition, appreciation, and, at times, confrontation (for poorer performers). That shouldn't be tied to how much your organization happens to have in the merit pool in any given year. We all know managers who pooh-pooh the whole process because the company only has a 2 or 3 percent merit pool to play with. But that "causal connection" between the size of the merit pool and the effectiveness of or investment in the company's performance management system couldn't be further from the truth in terms of the value of a strong performance measurement program.

This information about the organization's most critical and fickle asset—its human capital—rarely makes its way to the top of the organization as a key, measurable metric. Instead, these one-off exercises happen across the company and then never see the light of day again once the documentation makes its way into each individual employee's file. The performance trends and patterns don't percolate to the top of the organization, where that "strategic asset" should be measured and evaluated relative to revenue generators, key expense indicators, and the like.

Finally, and most importantly, a strong performance management system will not only reflect your organization's past performance—it will drive future change within your company by setting your strategic direction. That's right—your performance review template should allow you to set organizational priorities and move the ship of state in new directions based on your immediate challenges and longer-term organizational goals.

Let's look at it this way. Every company in corporate America has its own unique performance appraisal form, system, and process. Public, private, for-profit, not-for-profit, domestic, international, union, nonunion, and small and large employers alike all have some semblance of a performance management program and system that they rely on to document and reward performance. Even if they have no formal system, they still have an informal way of measuring and communicating these same values.

We recommend building a program that addresses all the various types of companies and programs already in existence out there, using flexibility and customization so that employers can reflect the true state of performance management within their organization at any given time. Flexibility and customization are the keys. We just have to make it easy to adapt both the form and content of the performance review so that readers can mix and match their organizational priorities to move their companies forward.

For example, what are the stages of a typical company's growth? What are the typical challenges faced at each stage? How do organizational goals and priorities translate themselves to the departmental and individual level? For that matter, how do you shift your culture to that of a performance-based organization?

Believe it or not, this isn't really that hard to do, and it doesn't take tens of thousands of dollars in management consulting or software fees. Instead, this is where life in corporate America gets most creative. It's where we get the biggest bang for the buck in wanting to become strategic contributors to our organization's overall direction. And bottom line—this is where all the fun is! We know that startups disrupt the status quo and create innovation, while large, established companies are typically on the defensive. (After all, they have a lot to protect!) We know that as growth companies become mature companies, they tend to lose that creative spark that juiced everyone up when they were working out of someone's garage years ago, before things were managed more by the accountants and lawyers and the creative spirit got squelched. And we also realize that mature companies can go on the decline if they're not careful and thinking of new and innovative ways of reinventing themselves in their competitive space, so reinjecting a spirit of innovation and creativity may be critical—although it may come more from building matrix teams rather than from solo performers (like your company's original founders).

Achieving consistent customer replenishment and cash flow from your startup will rely on your ability to offer creative and innovative products in a particular niche, combined with outstanding customer service and value pricing. Turning your startup into a competitive growth company will rely on your ability to hire and develop a strong leadership team, build your core around exceptional communication, and install a clearly delineated chain of command. Morphing from a growth organization to a stable and mature company will then focus on your ability to install appropriate compliance measures, reduce turnover, and capture a greater return on investment for your human capital asset.

No one performance review form or template can apply equally across the board to so many different organizations in different industries at different stages of development. But do you see how the factors outlined above—innovation and creativity, strong communication, effective hiring, and compliance—all help to drive your company forward at different stages? That's the real value of an effective performance management system in a performance-based organization—your template articulates and drives your organizational goals and values!

This book is the first in its class to attempt to build a tool that reflects your company's current needs and challenges and that could be morphed to adapt to the new directions you're looking to pursue. No one size would—or should—fit all, but as is typically the case when it comes to individual or organizational performance modes, the value lies in the discussion. The communication and the dialog about where you're going and how you'll best get there, as framed through the vision of your most critical capital asset—your human resources—is what performance management is truly all about.

Yes, this is about individual performance evaluation, but it's so much more than that! This is about organizational forecasting, about strategic leadership and making your employees feel engaged and involved in where the ship is heading. This makes it easy for them to have skin in the game, and there's no greater gift you could give your company than a motivated and dedicated workforce. We live in a knowledge-based, information-driven society where human capital selection and leadership defines who succeeds and thrives. This tool will give you the opportunity to bring your company to that next level.

The Achilles' Heel of Workplace Management—Historical Challenges with Assessing Performance and Placing a Monetary Value on People

So much has been written on performance management and performance appraisal over the past few decades, including books on abolishing performance appraisal outright, that launching this book project posed somewhat of a risk. We certainly didn't want to become "just another book on performance reviews" and decided early on to venture into the essence of the performance management world: designing an evaluation model that could help companies move performance forward, both at the individual and enterprise-wide level.

Still, it is inherently difficult to assess the contribution of your fellow workers to your department's morale or your company's bottom line. How do you evaluate fairly and consistently? How do you ensure that you're holding your people to the same standards that other organizational leaders are attempting to follow? What's the real significance of a score of 3 (meets expectations), and what does someone have to do to reach a 5 (stellar)?

An additional risk, of course, lies in attempting to reinvent a critical element of workplace performance that's particularly unpopular in the business press these days: tying performance to monetary rewards. On the one hand, we observe company after company complaining that they have an outdated system that is not delivering the payoff they want or need. On the other hand, we see an incredible resistance to engaging in exercises that will develop employees' long-term career potential because there's so little money in the merit pool to differentiate high from medium performers. The disconnect has never been so evident because few companies truly practice "pay for performance" and simply use the employee's individual evaluation form as an administrative tool to justify annual merit increases. With merit increases so tight and employee disengagement at such a high level, the last thing needed in the annals of business literature is yet another book on measuring performance, right?

Abolish Performance Appraisals? We Think Not! The Sad State and Demise of Performance Appraisal Today

Well, not so fast ... We're all making this much harder than it has to be. There is a lot of noise out there about abolishing performance appraisal, the disconnect between the administrative forms and the organization's true needs of measuring performance, the damage a poorly written review could do when an organization tries to terminate someone in light of high-scoring performance appraisals on record, and the general sense of apathy and indifference that surrounds what should inherently and intuitively feel like the most important exercise of the year in an employee's eyes. After all, aren't report cards necessary to reflect on past productivity and guide future performance and behaviors? Without a scorecard, how do you know who's winning the game?

Performance appraisal isn't just a form—it's a process—and the critical link that the performance management process seems to be missing is ongoing communication between superior and subordinate throughout the review period. When done correctly, the annual performance review is one step in a continuing cycle of ongoing performance measurement, progress against goals, and shifting priorities. Where those twelve months of historical performance and goal attainment culminate is during the annual review period—much like a balance sheet reflecting a snapshot of an organization's financial and operational performance at a given point in time. And we all know how important balance sheets are in evaluating companies' performance.

Performance reviews aren't just built around individual workers—they're even more critical at the enterprise level where that human capital muscle needs to be measured and managed. So few companies track and trend performance appraisal scores over time. Even fewer use the data as part of an ongoing scorecard to move the organization forward by strengthening its human capital muscle. And that typically occurs because few organizations look at the tool strategically—as an indicator of human capital strengths, weaknesses, opportunities, and threats. If they could only see what it looks like to capture the data and measure it over time to ensure that employees are working in harmony toward revised company goals and initiatives. And just think how nicely that would lend itself into succession planning and other exercises down the road!

Excerpted from THE PERFORMANCE APPRAISAL TOOL KIT by Paul Falcone. Copyright © 2013 by Paul Falcone and Winston Tan. Excerpted by permission of AMACOM.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents





CHAPTER 1 Why It’s Time to Stop Complaining and to Start Building the Right Performance Measurement System That Can Transform Your Company 7

CHAPTER 2 Unleashing the Power of Performance Management: Driving Cultural Change and Strategy Development 25

CHAPTER 3 Compensation and Performance Measurement Mechanics: Your Technical Look Under the Hood 50

CHAPTER 4 Evaluating Results and Assessing Individual and Enterprise-wide Performance: A Report Card That Allows You to Measure and Raise the Performance and Productivity Bar 67

CHAPTER 5 Building Your Performance Appraisal Content and Form 89

CHAPTER 6 Goals: Setting a Course for Stretching and Development 125

CHAPTER 7 Putting It All Together—A Performance Management Program That Every CEO, Board of Directors, and Individual Employee Can Love 139

CHAPTER 8 Common Questions and Answers to Build and Customize Your Organization’s Performance Appraisal Program and Template 153

Appendix A Employee Self-Evaluation Form 175

Appendix B Sample Model Performance Appraisal Template 177

Appendix C Sample Employee Annual Performance Report 183

Appendix D Six Sample Performance Review Templates That Reflect Your Organization’s Changing Needs and Priorities 187



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