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What are the best practices for using performance appraisals to support employee wellbeing?

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Performance appraisals are a common tool for managing and developing employees in organizations. However, they can also have a significant impact on employee wellbeing, both positively and negatively. How can you use performance appraisals to support employee wellbeing and create a positive organizational culture? Here are some best practices to follow.

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Vina Sarna

COO @ Amplify | Empowering Founders & CEOs in People Ops & Human Capital Management |
Guy Castegnaro LL.M.

Founding & Managing Partner of CASTEGNARO Ius Laboris Luxembourg | Lawyer | University lecturer | Panelist | Author

1 Align appraisals with values

One of the key factors that affect employee wellbeing is the alignment between their personal values and the organizational values. When performance appraisals reflect and reinforce the values that the organization stands for, employees feel more engaged, motivated, and satisfied with their work. Therefore, you should design and conduct performance appraisals that are consistent with the organizational vision, mission, and goals, and that emphasize the behaviors and outcomes that align with the values.

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Lovin Sharma

Top 50 Campus Hiring Leader | Global Top 10 Young HR Excellence Award Winner | University Recruiter at GoDaddy | Ex-Innovaccer
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Begin by fostering a culture of open communication, creating a safe space for employees to discuss their challenges and aspirations. Align performance metrics with realistic goals, acknowledging the impact of workload on mental health. Integrate wellbeing discussions into appraisals, emphasizing the importance of work-life balance. Provide constructive feedback, emphasizing strengths and growth opportunities. Encourage regular check-ins beyond formal appraisals, ensuring continuous support. Ultimately, view appraisals not just as assessments but as opportunities to nurture employee flourishing, creating a workplace where success and wellbeing coexist harmoniously.

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2 Focus on strengths and development

Another factor that influences employee wellbeing is the balance between feedback and recognition. While feedback is important for improving performance and identifying areas of improvement, recognition is essential for boosting self-esteem, confidence, and morale. Therefore, you should use performance appraisals as an opportunity to acknowledge and appreciate the strengths and achievements of your employees, as well as to provide constructive and specific feedback for development. You should also involve your employees in setting realistic and challenging goals for their growth and learning, and offer them support and resources to achieve them.

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Edwin Dirghantara

Chief Fun Officer I 3x Top Voice Leadership with +1.7mio post's impressions I IRCA ISO 9001 Lead Auditor I BNSP Assessor & Master Trainer
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"People who feel appreciated will always do more than what is expected." - Colin Powell By highlighting an individual’s strengths, the appraisal process acknowledges their value and contributions to the organization, leading to increased self-confidence and a sense of purpose. This positive reinforcement can bolster employee morale and foster a more supportive work environment, ultimately contributing to enhanced wellbeing.

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3 Communicate effectively and frequently

A third factor that affects employee wellbeing is the quality and frequency of communication. When performance appraisals are conducted infrequently, inconsistently, or without clear expectations and criteria, employees may feel anxious, frustrated, or demotivated. Therefore, you should communicate effectively and frequently with your employees about their performance and progress, and use performance appraisals as a dialogue rather than a monologue. You should also solicit and listen to your employees' feedback, concerns, and suggestions, and address them promptly and respectfully.

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4 Foster a culture of trust and respect

A fourth factor that impacts employee wellbeing is the culture of trust and respect in the organization. When performance appraisals are used as a tool for punishment, control, or manipulation, employees may feel threatened, resentful, or distrustful. Therefore, you should foster a culture of trust and respect in the organization, and use performance appraisals as a tool for empowerment, collaboration, and innovation. You should also treat your employees fairly, transparently, and consistently, and avoid bias, favoritism, or discrimination.

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Vina Sarna

COO @ Amplify | Empowering Founders & CEOs in People Ops & Human Capital Management |
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In our roles as managers, it's common for us to be perceived as individuals primarily focused on performance metrics and numbers, potentially overshadowing our concern for employee well-being. Despite our inquiries about their day and attempts to provide occasional breaks, actions speak louder than words. Building credibility is a gradual process, and when trust and respect are established, we cultivate an environment conducive to collaboration and innovation. This, in turn, indirectly contributes to the overall well-being of our employees. It's essential to bridge the gap between performance-oriented expectations and genuine care for the welfare of our team members, ensuring a balanced and supportive leadership approach.

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5 Evaluate and improve the appraisal system

A fifth factor that influences employee wellbeing is the evaluation and improvement of the appraisal system. When performance appraisals are outdated, irrelevant, or ineffective, employees may feel disillusioned, disengaged, or dissatisfied. Therefore, you should evaluate and improve the appraisal system regularly, and ensure that it is aligned with the organizational strategy, objectives, and culture. You should also involve your employees in the design, implementation, and review of the appraisal system, and seek their input and feedback on how to make it more meaningful, useful, and fair.

Performance appraisals can be a powerful tool for supporting employee wellbeing, if used wisely and appropriately. By following these best practices, you can use performance appraisals to enhance employee engagement, motivation, satisfaction, and performance, and to create a positive organizational culture.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Guy Castegnaro LL.M.

Founding & Managing Partner of CASTEGNARO Ius Laboris Luxembourg | Lawyer | University lecturer | Panelist | Author
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La mise en place de systèmes d’évaluation de performance est certes louable et peut le cas échéant améliorer le bien-être des salariés. Néanmoins, aussi bien l’installation et que l’exploitation de tels systèmes nécessitent généralement l'avis, voire l'accord??des représentants du personnel.

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What are the best practices for using performance appraisals to support employee wellbeing?

1

2

3

4

5

6

1 Align appraisals with values

2 Focus on strengths and development

3 Communicate effectively and frequently

4 Foster a culture of trust and respect

5 Evaluate and improve the appraisal system

6 Here’s what else to consider

Human Resources

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What are the best practices for using performance appraisals to support employee wellbeing?

1

2

3

4

5

6

1 Align appraisals with values

2 Focus on strengths and development

3 Communicate effectively and frequently

4 Foster a culture of trust and respect

5 Evaluate and improve the appraisal system

6 Here’s what else to consider

Human Resources

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