Performance Appraisal and Management

Performance management is a process by which managers and employees work together to plan, monitor and review an employee’s work objectives and overall contribution to the organization. More than just an annual performance review, performance management is the continuous process of setting objectives, assessing progress and providing on-going coaching and feedback to ensure that employees are meeting their objectives and career goals.

In this Section:

An introduction to performance management

The fundamental goal of performance management is to promote and improve employee effectiveness. It is a continuous process where managers and employees work together to plan, monitor and review an employee's work objectives or goals and his or her overall contribution to the organization.

HR Management Standard 3.3
The performance of each employee is fairly assessed, at least annually, at the end of the work plan or performance period.

Before you embark on the development of an effective performance management system, you should take a moment to consider whether or not your organization has HR management practices in place to support the performance management process.

These include:
  • Well designed jobs and written job descriptions
  • Effective supervision
  • Comprehensive employee orientation and training
  • A positive and supportive work environment
An effective performance management system will:
  • Be job-specific, covering a broad range of jobs in the organization
  • Align with your organization’s strategic direction and culture
  • Be practical and easy to understand and use
  • Provide an accurate picture of each employee’s performance
  • Include a collaborative process for setting goals and reviewing performance based on two-way communication between the employee and manager
  • Monitor and measure results (what) and behaviours (how)
  • Include both positive feedback for a job well done and constructive feedback when improvement is needed
  • Provide training and development opportunities for improving performance
  • Ensure that employee work plans support the strategic direction of the organization
  • Establish clear communication between managers and employees about what they are expected to accomplish
  • Provide constructive and continuous feedback on performance
  • Identify and recognize employee accomplishments
  • Identify areas of poor performance and establish plans for improving performance
  • Support staff in achieving their work and career goals by identifying training needs and development opportunities
  • Support administrative decision-making about promotions, terminations, compensation and rewards
  • Provide legal documentation to demonstrate due diligence for legal challenges related to dismissal or vicarious liability (an employer can be held liable for the acts or omissions of its employees during the course of employment)

The establishment of an effective performance management system requires time and resources and therefore, the support of the board, the executive director and other senior managers. When developing a new performance management process, an organization can strike a committee made up of employees, managers and board members to increase buy-in, understanding and support for the process.

Management support to act upon the outcomes of the performance management process is also necessary to ensure that good performance is recognized, inadequate performance results in the necessary support and/or training to improve performance, and consistently poor performance results in a change of responsibilities or termination, as appropriate.

Whether you are introducing a new performance management system or modifying an existing process, it is critical that you communicate the purpose and the steps in the performance management process to employees before it is implemented. Also, remember to review your new performance management system after the first year and make adjustments as necessary.

The performance management cycle

There is much more to performance management than the annual performance review meeting. As mentioned in the introduction, performance management is a continuous process of planning, monitoring and reviewing employee performance.

Phase 1 — Plan

The planning phase is a collaborative effort involving both managers and employees during which they will:
  • Review the employee’s job description to determine if it reflects the work that the employee is currently doing. If the employee has taken on new responsibilities or the job has changed significantly, the job description should be updated.
  • Identify and review the links between the employee’s job description, her or his work plan and the organization’s goals, objectives and strategic plan.
  • Develop a work plan that outlines the tasks or deliverables to be completed, expected results and measures or standards that will be used to evaluate performance.
  • Identify three to five areas that will be key performance objectives for the year. The choice of areas may be determined by the organization's strategic plan, by the employee's desire to improve outcomes in a certain part of her or his job, or by a need to emphasize a particular aspect of the job at this time. These are objectives that are critical to the overall success of the position. If the employee does not meet her/his critical objectives then overall performance will be evaluated as unsatisfactory.
  • Identify training objectives that will help the employees grow skills, knowledge and competencies related to her or his work.
  • Identify career development objectives that can be part of longer-term career planning.

Both the employee and manager need to sign off on the proposed work assessment plan. A copy of the plan should be given to the employee and another should be kept in her or his confidential personnel folder.

Setting objectives and measurements

Often the most difficult part of the planning phase is finding appropriate and clear language to describe the performance objectives and measures or indicators of success. Managers need to ensure that the objectives are a good representation of the full range of duties carried out by the employee, especially those everyday tasks that can take time but are often overlooked as significant accomplishments.

What is a valid measure of good client service?

If the measure used only considers the number of clients served (i.e., what was done), then the quality of service or how well it was done is not captured. Assessing both "what" and "how" would be a more valid measure for good customer service. For example, in addition to the number of clients served, the quality of the information provided and a complaint rate of 1% or less could represent good client service.

To assess quality of information provided, the supervisor could do spot checks to listen to or look at the information that the employee provides to clients. The supervisor would then assess accuracy and completeness of the information.

Objectives and indicators need to be SMART

Specify clearly what is to be done, when it is to be done, who is to accomplish it and how much is to be accomplished.

Ask questions such as: How much? How many? How will I know when it is accomplished? Multiple measures should be used if possible (e.g., quantity, quality, time frame and cost).

Assure there is reasonable path to achievement and feasible odds that you will get there.

The objective needs should match the level of complexity with the employee's experience and capability and no insurmountable forces outside the control of the employee should hinder its accomplishment.

Be clear about the time frame in which performance objectives are to be achieved. In most cases, objectives are to be completed by the end of the performance review period.

Writing SMART objectives:

Action verb + Object of the action verb + Measures

Example for an employee who is responsible for supervising volunteers

SMART Objective 1: Conduct monitoring visits on a monthly basis to assess the performance of the volunteers against the plans and objectives that were developed with them.

SMART Objective 2: Provide written updates on the work of the volunteers to the program manager on a quarterly basis.

Not SMART: Drop in and see how the volunteers are doing.

Phase 2 — Monitor

For a performance management system to be effective, employee progress and performance must be continuously monitored. Monitoring day-to-day performance does not mean watching over every aspect of how employees carry out assigned activities and tasks. Managers should not micro-manage employees, but rather focus their attention on results achieved, as well as individual behaviours and team dynamics affecting the work environment.

During this phase, the employee and manager should meet regularly to:
  • Assess progress towards meeting performance objectives
  • Identify any barriers that may prevent the employee from accomplishing performance objectives and what needs to be done to overcome them
  • Share feedback on progress relative to the goals
  • Identify any changes that may be required to the work plan as a result of a shift in organization priorities or if the employee is required to take on new responsibilities
  • Determine whether any extra support is required from the manager or others to assist the employee in achieving her or his objectives
Continuous coaching

Performance management includes coaching employees to address concerns and issues related to performance so that there is a positive contribution to the organization. Coaching means providing direction, guidance and support as required on assigned activities and tasks. As a coach, managers need to recognize the strengths and weaknesses of employees and work with them to identify opportunities and methods to maximize strengths and improve weak areas. The role of the coach is to demonstrate skills and to give the employee feedback, and reassurance while she or he practises new skills. Good listening skills on the part of the coach, together with the ability to deliver honest feedback, are crucial. In a coaching role, you are not expected to have all the answers. The strategic power of any coaching dialogue lies primarily in the coach's ability to ask the right questions.

Providing feedback

Positive feedback involves telling someone about good performance. Make this feedback timely, specific and frequent. Recognition for effective performance is a powerful motivator.

Constructive feedback alerts an employee about an area in which performance could improve. The feedback is descriptive and should always be directed to the action, not the person. The main purpose of constructive feedback is to help people understand where they stand in relation to expected and/or productive job and workplace behaviour.

Often, it is positive and supportive feedback that is most readily and easily shared. Finding the right way to provide constructive feedback to address a particular performance issue can be more daunting. If an employee is not meeting performance expectations, managers need to provide constructive and honest feedback. It's important to do this when an issue first arises – before it escalates into a significant problem. Here are a few points to consider when giving constructive feedback:

  • Think through what you want to address in the meeting, confirm the facts of the performance issue, and make sure you know and can describe what happened or is happening.
  • Be clear about what the issue is and about the consequences if the employee's performance does not improve.
  • Plan to meet in a location where there will be privacy and minimal interruptions (note that in a unionized environment, you may have to invite a union representative to be with the employee during the discussion).
  • Be calm, so that you can approach the discussion objectively and with clarity.
State the facts
  • Using a non-threatening tone, describe the performance issue in an objective, factual, nonjudgmental way, and provide specific examples.
  • Identify the negative impact on people in the workplace or the organization.


“You are always late.”

This statement is general and judgmental. It does not address the performance issue effectively.

“You were late three times last week. When you arrived late for the staff meeting, you missed an important discussion about…”

This statement is factual and specifically addresses the performance issue and the impact of being late.

  • Have the employee describe the situation from her or his perspective and provide an explanation. Be open to any new insights that may arise.
  • Respond to such things as denial or blaming of others by restating factual information and reviewing the negative impacts of the performance issue.

Although we may sympathize with an employee’s unique personal circumstances and reasons she or he is not performing, it is important to remain focused on the performance issue. If you alter what is required of one employee (i.e., “bend the rules”) you will have to be prepared to do so for all employees. As a performance manager, try to avoid putting yourself in the position to have to judge which circumstances warrant “special treatment” and those that do not.

Agree on an action plan
  • Ask the employee for their suggestions for addressing the issue and offer your suggestions if necessary.
  • Agree on a specific plan of action, including what the employee will do, how and within what time period.
  • Document the action plan and attach it to the employee’s performance management file.
  • Specify the consequences for the employee if the performance issue is not resolved.
Follow up
  • Monitor results and meet periodically to discuss progress.
  • Provide positive reinforcement for improvement and continue to offer support.
  • If the issue has not improved or been resolved over the specified time period, enact the consequences as discussed in the action plan.

Phase 3 — Review

The performance assessment or appraisal meeting is an opportunity to review, summarize and highlight the employee’s performance over the course of the review period.

Self-assessment is a standard part of most performance appraisals. By using the performance plan and assessment form as a guide, employees can assess their performance in preparation for the appraisal meeting. This process can identify gaps between the employee’s self-perceptions and the views of the manager, and can allow for more in-depth discussion of these performance points during the meeting.

Managers should review their performance management notes and documentation generated throughout the year in order to more effectively assess the employee’s performance. Only issues that have already been discussed with the employee should be part of the assessment documentation and meeting. This will ensure that managers deal with performance problems when they arise and that there are no surprises during the performance assessment meeting.

In the performance assessment meeting, employees and managers will:
  • Summarize the work accomplished during the previous year relative to the goals that were set at the beginning of the performance period. This includes capturing the key results, accomplishments and shortfalls for each of the objectives.
  • Document challenges encountered during the year and identify areas for training and/or development.
  • Identify and discuss any unforeseen barriers to the achievement of the objectives.

The employee and the supervisor should sign off on the form. This acknowledges involvement in the process, but not necessarily agreement by the employee with the content of the evaluation. If an employee disagrees with any part of the performance assessment, provide tthe opportunity for her or him to attach comments and file them with the performance assessment form.

Managers must ensure that the employee receives a copy of the assessment form and the signed document is put in the employee's file.

Important: An appeals process

Even with a well-designed and -implemented performance management process, there may be situations when an employee has a serious difference of opinion with the manager about her or his performance assessment. A procedure for the employee to discuss disagreement with the process should be established.

Some options for dealing with disagreements about performance appraisals are:

Step review system
The disagreement is heard by higher levels of management such as the supervisor's manager, followed by the executive director as necessary. In small organizations there may not be higher levels of management to appeal to.

Peer review system
A small group made up of equal numbers of employees and management staff review disagreements. (Note that this system may not be sanctioned in a unionized workplace).

Employees can seek assistance from an individual within the organization who is designated as an impartial ombudsman.

Avoid rater bias or assessment errors

Our judgements about many things are affected by our perception. When a person evaluates someone else, the evaluation reflects both the person being assessed and the evaluator's built-in biases. Managers should be aware of their possible evaluation biases, so they can try to eliminate them from the assessment process.

Some common biases include:

A tendency to form a generalized positive impression of an employee, meaning rating the employee highly on all rating criteria rather than independently for each item.

The opposite of the halo effect bias, with a general negative impression of an employee resulting in artificially low ratings. This bias may come up if the manager generally dislikes or has little confidence in an employee.

Central tendency
A tendency to evaluate most employees as "average" when applying a rating scale. For example, given a scale that runs from 1 (poor) to 7 (excellent), with 4 being the average, some managers refuse to use the points at either end. The tendency is for almost all ratings to fall within the 3-5 range. Shorter rating scales (e.g., those with only three points, rather than seven) tend to cause less central tendency bias, but they also become less exact.

Leniency bias / Strictness bias
When a manager has a tendency to be more lenient or more strict than her or his peers when rating employees, or is more lenient or strict with one employee as compared to another.

A tendency to rate employees more favourably who are perceived to be similar to the rater than employees who are dissimilar.

Important: If this tendency is based on grounds for discrimination under human rights legislation (for example race, gender, nationality), it is a violation of human rights and is illegal.

Developing a performance assessment form

A performance assessment form is a tool that helps guide and document a discussion between a manager and an employee about the employee's performance over the past year. A poorly designed assessment form can undermine a good performance management system. Below are some guidelines on what to include in a performance assessment form.

General information
Typically, the first section of a performance assessment form includes standard information about the employee, the manager and the organization. This includes the:
  • Employee’s full name and job title
  • Manager’s full name and job title
  • Assessment period
  • Date that the assessment meeting took place
Assessment form instructions

Include some brief instructions on how to complete the assessment form, the type of information to include on the form and the reason that the information should be included.

"The performance assessment form is designed to guide the manager and employee in documenting the employee's results in comparison to the agreed-upon objectives. Please follow the instructions for each section...”

Performance objectives and measures

Document the performance objectives identified in the employee’s work plan and the measures to be used to assess achievement. List the objectives in their order of importance, with the most important listed first.


Key Objective
Performance Measures

Provide updates on the work of volunteers to the program manager

Written report submitted quarterly

Competency profile

If your organization has a performance assessment process that is based on a competency framework, be sure to include the list of relevant competencies on the assessment form. Examples of competencies include teamwork, effective communication and problem-solving.


Members of a team have a goal of planning an event and carrying it out as scheduled. However, if the members are to be effective in planning the event and in working together after the event, they also need to demonstrate effective teamwork skills. The aim is not to get the event planned at any cost; it is to get the event planned and preserve the working relationships after the event is over.

Key competencies
To be demonstrated by


  • Assists or cooperates with members of the team to reach the common goal
  • Is tactful and diplomatic when dealing with others
  • Accepts constructive criticism and adjusts behaviour to achieve the team's goals
  • Gives constructive feedback
Clear rating scales

Performance assessment forms often include rating scales to help guide and simplify the assessment process. Poorly constructed rating scales can be a source of confusion, subjectivity, ambiguity and conflict – all of which undermine the performance assessment process. A reliable assessment has consistent ratings for the same performance over time and with different raters.

To increase the reliability of rating scales:
  • Avoid language that may be inflammatory and, when possible, use words that are not open to interpretation.
  • For words that are open to interpretation, provide definitions and examples to clarify what is meant.
  • Use simple rating scales.
  • The reliability of frequency scales can be improved by defining the percentage of time for each point on the scale. For example: "Almost always" could mean 95% – 100% of the time.
For key work objectives, a rating scale like this is simple and can guide the discussion between the manager and the employee:

Exceeded objective

Met objective

Did not meet objective

 For key competencies or other behavioural measures, consider a frequency scale like this one:

Almost always




Almost never

Employee training and development plan

As part of the performance assessment process, the manager and employee may have identified areas for further training and/or development, as well as the types of activities the employee could undertake. Document the expectations for training and development in the performance assessment form. At the end of the year, document the results of the learning activities.

Example – Program Coordinator
Training objectives
  • Improve group/meeting facilitation skills
  • Become more comfortable and effective in facilitating group process
  • Understand how to plan a meeting and build a better agenda
Relationship to responsibilities
  • Responsible for facilitating information and orientation sessions as well as various other small group meetings
  • Attend workshops
  • Will work with ED to plan and facilitate staff meetings once per month
Resources required
  • Fees for two-day workshop
  • Minimal time to coordinate with ED each month prior to staff meeting
  • By end of year


Example – Office Manager
Development objectives
  • To improve networking skills
  • Gain a better understanding of the HR profession
  • Increase knowledge of HR management
Relationship to organizational goals and career plan
  • Currently responsible for some HR management (payroll, personnel files, etc.)
  • No one on staff has formal HR training or background
  • Interested in exploring field and possibly pursuing continuing education
  • Join provincial HR professional association
  • Attend meetings, networking events and workshops
Resources required
  • Annual membership fee
Time line
  • By end of year


Sign-off section

End your form with an area for the manager and employees signatures. The signatures should come after a statement that indicates 'by signing, both parties are acknowledging that they have read and discussed the contents of the performance assessment form.' This allows the performance management cycle for one year to come to a close and the cycle for the next year to begin.

Make sure the employee understands that, by signing, he or she does not have to agree with all the comments made in the assessment. If an employee disagrees with any part of the performance assessment, provide them with the opportunity to attach their comments.

Performance management for executive directors

In many organizations, it is the executive director who is responsible for implementing the performance management system, but the executive director also needs feedback on her or his performance and to demonstrate how she or he is meeting work objectives – so it is integral that board members are involved in performance management.

The board of directors is responsible for hiring an executive director to ensure there is a skilled manager at the helm to lead the organization's work. Once hired, the board also has a responsibility to monitor the executive director’s performance because the effectiveness of the organization is closely tied to the executive director's performance.

A sound executive director performance management process ensures that:
  • The board meets its duty to effectively lead the organization.
  • The organization's mission and vision are implemented.
  • The professional development goals and needs of the executive director are met.
  • The job satisfaction and work-life balance of the executive director are monitored.
  • The executive director feels supported.
  • There is an ongoing written record of the executive director's performance.

An executive committee, HR Committee, or a specifically created ad hoc board committee will generally oversee the design and implementation of the performance management process for the executive director. If the organization only has a small number of board members, the board as a whole may be involved in the performance management process – rather than leaving the responsibility to a single board member.

Performance assessments shouldn't occur because there is a performance issue. Every organization should have a clear performance management process in place and communicate the plan to the executive director when hired. An executive director's performance needs to be measured in relation to her or his job description, annual work plans and organizational strategic plans.

Consider who will provide input. As board members often do not have the opportunity to be in the workplace on a regular basis, it is sometimes appropriate to seek assessment input from other sources than board members, including employees, partners, stakeholders and clients.

Ensure the executive director knows if people outside of the board will be asked to participate in the performance assessment process. Often, the executive director can suggest who can provide useful input into the assessment process.

Determine how the information generated through the performance management process will be reported back to the executive director and to the entire board of. If a sub-committee of the board (instead of the full board) is responsible for the process, decide if they have authority to offer salary or benefit increases or if the whole board must be involved.

Fully document and keep information in the executive director's personnel file. Have the executive director sign any reports along with board members involved in the performance management process. Review the performance management plan periodically and ask the executive director for input so that the process is supportive and useful for the board and the executive director.

360-degree (multi-rater) assessment process

360-degree feedback, also known as 'multi-rater feedback', is employee development feedback that comes from colleagues, peers and managers in the organization, as well as self-assessment, and sometimes sources such as clients, volunteers or other stakeholders.

Senior managers (including executive directors) are responsible for assessing the performance of other employees but often do not receive adequate feedback themselves. 360-degree feedback allows the individual to understand how his or her effectiveness as an employee, manager, or coworker is viewed by others.

Important:  Designing a good assessment tool and implementation process takes time. Some organizations may choose to hire external professionals to design, implement and analyze a 360-degree assessment. If assessments are administered without adequate training of participants, raters and facilitators, serious confidentiality issues can be raised, and relationships and individuals can be negatively impacted. Please consider the following information carefully before undertaking this type of assessment process.

What an effective 360-degree feedback process can achieve:
  • Individuals get a broad perspective of how they are perceived by others and how they impact others – both positively and negatively.
  • Open feedback is encouraged and thus often perceived as more valid and objective, leading to acceptance of results and actions required.
  • Critical performance aspects are clarified, desired competencies reinforced and strengths identified that can be used to the best advantage of the organization.
  • A climate of continuous improvement is supported and there is a focussed agenda for development, identifying key development areas for the individual, a team or the organization as a whole.
  • Gaps are identified between employee’s self-perception versus the perception of the manager, peers or direct reports.
  • When feedback comes from a number of individuals in various job functions, discrimination because of race, age, gender and so on, is reduced. Similarly, the "horns and halo" effect, in which a supervisor rates performance based on her or his most recent interactions with the employee, is also reduced.
Why organizations may choose not to adopt the 360-degree approach:
  • Feedback from multiple assessors increases the number of people participating in the process and the organizational time invested.
  • Employees are not ready to give or receive honest and open feedback. The process can be intimidating since few people enjoy being evaluated, especially by a circle of colleagues and peers. Some cultures rigidly avoid passing constructive feedback or information to superiors or managers.
  • If a performance management system is tied to pay increase and reward systems, people may be hesitant to participate. There is a big difference between providing feedback that will contribute to professional development and providing feedback that determines pay, rewards, and promotion.
  • Since feedback is most often provided in written form (not in person, to ensure anonymity), people receiving feedback can’t ask directly for clarification of comments or more information about ratings and their basis.
The 360-degree feedback process overview

A 360-degree feedback or other multi-rater process should follow effective change management guidelines. A cross-section of the people who will have to live with and utilize the process should explore and develop the process for your organization.

If you are planning to implement a 360-degree feedback process, there are several important questions to ask and answer regarding the process:
  • Will your organization use an anonymously filled out instrument or promote face-to-face, or known rater feedback, or a combination of these?
  • Who will select the raters?
  • How much training will raters receive in completing the assessment and how to provide meaningful feedback?
  • What feedback guidelines will the organization promote?

Participants may have concerns about confidentiality of reviews, how the completed reviews will be used in the organization and what sort of follow up they can expect. All participants in a 360-degree process need to be trained in the goals of the process, methods used in administering the process, what the organization will do with the data collected, and expectations of the employees involved in the process.

Many organizations choose to employ an anonymously filled out 360-degree feedback document, comprised of questions based on the organization’s competency framework. Assessment forms that allow for examples and comments about each question are preferable, since they will allow the person who is the subject of the feedback to better understand the ratings.

The employee who is receiving feedback and her or his manager should always fill out the 360-degree assessment as well. The individual’s rating of her/his own performance is important for comparison with the rater group’s feedback. As well, the manager’s feedback is important since, in most assessments, the feedback of the direct supervisor is not averaged with the rest of the feedback from other raters.

The collected data is analyzed in a confidential manner and results are shared with the person who is being assessed. Those administering the process and facilitating the debrief/feedback meeting need to assist people to understand their feedback and to support action planning and development based on the feedback. It is critical that those involved in debriefing participants fully understand what the assessment tool and analysis means and its potential impact on the emotions and career of the participant.

The debriefing process is critical because it helps the participant facilitate change by:
  • Presenting data from the assessment that describe the participant’s personal and management style in concrete behavioural terms
  • Giving the participant the opportunity to react, ask questions, and formulate strategies with the “debriefer”
  • Creating a developmental plan with the participant that will form a foundation for future development
Final checklist for your performance management system
As stated previously, performance management has a variety of purposes, one of which is documentation should there be a legal challenge related to performance. To ensure that your performance management process is defensible:
  • Base the process on well written job descriptions and job-related activities.
  • Have the manager and employee collaborate on setting performance objectives.
  • Establish results (objectives) and behaviours for which you can develop observable measures; avoid traits such as “initiative”, which require subjective assessments.
  • Ensure that the employee keeps a copy of the performance plan (work plan) and expectations set at the beginning of the performance management cycle.
  • Provide ongoing monitoring and feedback on performance to the employee.
  • When problems are identified with performance, provide support (training, coaching, etc.) and adequate time for the performance to improve.
  • Train managers on all aspects of the process and on how to reduce bias and error in assessments.
  • Ensure that the performance assessment form accurately documents performance. If overall performance is poor, say so.
  • Do not make any notes that you would not want the employee to see because the documentation may be admissible in court (or at arbitration in a unionized workplace).
  • Periodically review the performance management process to ensure that it is being applied consistently and fairly.
  • Establish an appeals process.