Performance appraisal refers to the process by which the performance appraisal subject compares the work objectives and performance  appraisal standards , uses scientific  performance appraisal methods, assesses the completion of the work tasks of the employees, the fulfillment of the duties of the employees and the development of the employees, and feeds back the evaluation results to the employees.
It is a link in corporate performance management. Common performance appraisal methods include BSC , KPI and 360-degree management appraisal. Mainstream business management courses such as EMBA and MBA all regard the design and implementation of performance appraisal methods as an important manpower for managers. The requirements for resource management capabilities are included, which is mainly one of the core tasks of the human resources department.

6 key steps to interpret the design of the performance appraisal system

1. Clearly list the index group of the subject to be assessed, and fully grasp the logical correspondence between the indexes in the group
Unlike the high degree of freedom of individual entrepreneurship (the same is true for corporate executives and independent department heads), most of the workplace work content is actually constantly pushing forward their respective responsibility in the environment where the entire work unit is operated. The business process of that module.
2. The indicators in the indicator group are classified and labelled in the following three ways
1. Divided from the dimension of evaluation cycle
According to the needs of each business process and the minimum time characteristic of the results of each indicator itself, each indicator can be divided into items suitable for recording and evaluation by day, week, month, quarter, semi-annual, and annual. Different evaluation cycles determine where this indicator will be placed in the performance appraisal evaluation system in the future.
2. Divided from the measurement method dimension
The indicators of each business node can be divided into categories that can be directly measured by numbers and categories that cannot be directly measured by numbers and can only rely on third-party evaluation.
The basic indicators (first-level indicators) refer to those:
An indicator with a break-even point on the growth curve will have a great impact on the overall operation before the indicator reaches the level of the balance point; and when it reaches the balance point, even if it is better completed, it will not affect the overall operation. Business goals produce more help, but consume more resources. For example, the staff turnover rate index of the human resources department and the call-through rate index of the customer service hotline fall into this category.
3. Clean and filter the indicator group according to the following three dimensions.
1. Only those indicators whose operating results can have a clear impact on the overall goal within at least three to five evaluation cycles (depending on the stability of the overall strategy)
Similarly, if the performance appraisal of a certain indicator in three to five consecutive evaluation cycles where results can be seen has no obvious influence and relevance to the overall strategic and tactical objectives, then it is recommended that such an indicator be removed from the subject’s evaluation. Delete from the indicator group (it may belong to another subject to be assessed, it may belong to a redundant process left over from history, or it may belong to an exploratory project that no one knows how to do and what it wants to get).
2. Keep only those indicators that comply with SMART principles (specific, measurable, achievable, relevant, time-bound)
For those indicators whose SMART attributes cannot be sorted out, it is recommended to temporarily abandon them before sorting out. Not only will they not take effect, but they will destroy the process, cause confusion and lower morale, and even become a breeding ground for office politics; even the performance appraisal makers themselves don’t know the indicators of cause and effect, so don’t impose them on the performance appraisal executors.
3. According to the logical relationship, choose one of cause and effect
In the first step of this article, in the “Listing Index Groups” section, the logical relationship between the indicators has been clarified at the same time (required). When there are several indicators with the relationship “A, B, C can completely determine D” in the index group of a certain assessed object, according to the company’s credit to the assessed object, choose either to assess A, B, C, or Directly assess D. Avoid {A, B}, {A, C, D} or {A, B, C, D} type of assessment, not only to avoid omissions, but also to avoid repetition.
Omissions lead to deviations in direction and discrepancies between goals and expectations; repetition not only restricts employees’ performance, but also occupies weight distribution. Both will cause a great waste of company resources.

The advantages of such calibration are:

The employees who do the best will get the most rewards, which not only plays a leading and exemplary role, but also makes the performance cost controllable.
The establishment of indicators in the upper-middle range also makes the target value for most employees a line that can be reached by striving to jump, so that they have a greater enthusiasm for improvement, and will not easily give up and produce a pair of training and product. The resistance of management behaviors such as control, system, overtime, etc., plays a role in pushing the overall team’s ability to meet standards.
5. Reasonable distribution of weights
When an appraisal object faces more than one indicator in the same appraisal cycle (in fact, in most cases there is more than one), it involves the problem of weight distribution among the indicators. Almost all performance makers know to assign more weight to important goals, but in actual operation, the following two types of mistakes are still common.