That’s just not true. What is a performance appraisal? The straightforward answer: A performance appraisal is a formal record of a manger’s opinion of the quality of an employee’s work.

The operant word, of course, is “opinion.”

Writing a performance appraisal requires managers to be fair, unprejudiced, and objective. But the fairness requirement doesn’t mean that you’re restricted only to using quantitative, numerical metrics in making your assessment. Your opinions, feelings, and judgments are what the appraisal process demands.

Managers must make judgments even when—or particularly when—all of the facts are not available. In every other area of managerial activity, the ability to make good decisions in spite of limited and perhaps even conflicting data is what they get paid for. Only in the case of performance appraisal do we feel unnerved about the fact that examples, experience ,and judgment — not quantitative and provable metrics — are used.

Insisting that there must be quantifiable metrics can lead us astray in accurately evaluating performance. For example, how would you evaluate the performance of a translator? The obvious, easy, and wrong answer: the number of documents translated. But while that aspect of performance is easily quantified, it ignores what’s genuinely important—the ability to capture nuance.

The ability to capture nuance isn’t hard to evaluate accurately. Just take a document written in a foreign language and give it to two translators. Then take their two translations to a native speaker and ask, “Which one got it right?” The native speaker will read the two documents and then comfortably say, “This one translates each word accurately. But this one—this one captures what the writer really intended.” That evaluation is certainly objective but there’s nothing quantifiable about it.

If you have access to numerical measures of the quantity of work a person did or if you have some quantitative index of quality to support your evaluation—terrific! Use them. But as long as you can provide solid examples to back up your assessments and ratings, then your appraisal is objective, even if quantitative measures aren’t available.

And despite the myth that objectivity requires metrics, people generally want to know their supervisor’s opinion of their performance. They want honest answers to their most important questions: How am I doing? Are you pleased with my work? Do I have a bright future here? Numbers alone can’t answer those questions.

Don’t get hung up trying to find quantitative metrics to support every judgment in a performance appraisal. Remember what Albert Einstein said: “Not everything that counts can be counted. And not everything that can be counted counts.”

About the Author

Dick Grote is a management consultant in Dallas, Texas and the author of the new book, How to Be Good at Performance Appraisals, published by the Harvard Business Review Press in July 2011.

It’s not. It’s a bad idea and needs to be stomped out.

Asking an employee to write a self-appraisal creates a false impression of what “performance appraisal” is. When he’s asked to write a self-appraisal, particularly when the company’s appraisal form is used, it’s easy for an employee to assume that the structure of the performance appraisal process is that both the individual and the boss separately write their appraisals of the individual’s performance. They then get together, share each other’s documents, and come to a common agreement on the final appraisal.

That’s wrong. A performance appraisal is a record of a supervisor’s opinion of the quality of an employee’s work. The review meeting is a discussion, not a negotiation. Asking the individual to write a self-appraisal encourages misunderstanding by both parties.

And the misunderstandings don’t stop there. In researching my book How to Be Good at Performance Appraisals, I found study after study that consistently demonstrated that individuals are notoriously inaccurate in assessing their own performance, and the poorer the performer, the higher (and more inaccurate) the self-appraisal. Research by the consulting firm Lominger, Inc. indicates that “the overall correlation between self-ratings and performance was .00. The most accurate rater by far is the immediate boss.”

Further, in their well-known article, “Unskilled and Unaware of It,” Cornell University researchers Justin Kruger and David Dunning report that those who are incompetent performers are also incapable of assessing the difference between good and bad performance. As they put it, “When people are incompetent in the strategies they adopt to achieve success and satisfaction, they suffer a dual burden: Not only do they reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the ability to realize it. Instead, they are left with the mistaken impression that they are doing just fine.”

One senior executive describing his company’s experience using a forced-ranking procedure to identify its A, B, and C performers told me of the same problem: “The As are afraid they’ll be considered Bs, the Bs are scared they’ll be seen as Cs, and all the Cs are convinced that they’re A players.”

In August 2007 BusinessWeek surveyed two thousand Americans in middle management positions and above, asking them the question, “Are you one of the top 10% of performers in your company?” Not one of the subgroups in the survey had less than 80 percent of the respondents answer the question affirmatively. Eighty-four percent of all middle managers reported that they were in the top 10 percent of performers in their company. Among executives—the most deluded cluster by far—97 percent of those who were asked whether they were in the top 10 percent group answered yes.

But there’s a better way. If company policy dictates that employees be asked (or ordered) to write self-appraisals, company policy must be followed. But a manager can prevent much of the mischief just described by explaining exactly what the purpose of the self-appraisal is (a way to gain information from the employee’s point of view) and how it will be used (as one of many data sources the supervisor will use to prepare the actual performance appraisal). It’s wise to ask the employee to submit the self-appraisal to the supervisor well in advance of the performance appraisal discussion so that the supervisor can use the data as an input to the official appraisal and not wait until the review meeting to find out what the employee has written. Finally, it helps to refer to the document the employee is preparing as a “self-assessment” while the document produced by the supervisor is the “official performance appraisal.”

A more effective approach is for the supervisor, at the start of performance appraisal season, to ask each direct report to send him an informal list of his or her most important accomplishments and achievements during the appraisal period. The list can be e-mailed or written on a blank piece of paper—there’s no official form. And nothing needs to be said about any problems or shortcomings or improvement needs. The manager’s sole purpose is to make sure that none of the employee’s successes are overlooked. This “good stuff” list will provide the same value as a formal self-appraisal. What’s more? It just may remove some of the stress and negativity felt about the performance appraisal process itself.

About the Author

Dick Grote is a management consultant in Dallas, Texas and the author of the new book, How to Be Good at Performance Appraisals, published by the Harvard Business Review Press in July 2011.

Of course, the best solution to this problem is to set some kind of compensation policy so these decisions don’t have to be handled in a one-off, spur-of-the-moment fashion. But as a manager, you may not be in a position to determine what your company’s policy will be, particularly if your company is a small owner-operated firm and you aren’t the owner. To have to say, “You’ll have to talk to Mr. Jones about that,” lets everyone know that you have no power or authority in the really important areas.

Raise-requesters usually offer up a combination of reasons why they deserve a pay increase: They’ve done an outstanding job and therefore deserve an increase. (Regardless of the truth of the assertion, this reason is almost always offered.) The scope of the job has significantly widened. The person is underpaid compared with peers in the office or what the going rate for the job is at other organizations. The cost of living has gone way up since the last salary adjustment. And there’s always the universal “I just need more money” motive.

If you are the decision-maker, the best approach is to thank the person for bringing the matter to your attention along with a promise to get back with an answer by a specific date. From there, talk to other people in leadership positions in your company about the whole issue of compensation. Is this raise request a unique event or is it the tip of an iceberg of compensation grumbles?

Then, fairly assess the situation. Keep in mind the difference between the value of the role that employees perform and their value as individuals. They’re not the same. Every job is worth a certain amount. That amount is determined by the market, not by the quality of the individual’s performance or their need for a greater income. It may be that the limit of the value that can be placed on a particular role has simply been reached. The refusal to grant a salary increase here is not a reflection on the person’s value as an individual but the worth of the job to the company, no matter how well it’s performed.

But let’s say a review of the individual’s salary-change request tells you that a pay increase is appropriate — the person is in fact underpaid compared with others in the company who are doing similar work, or it would be difficult to replace the individual if she left at anywhere near the salary the raise-requester is currently getting. Don’t immediately grant the increase. If a salary increase is granted directly following a request, word may spread that all individuals in the organization are underpaid. The unfortunate precedent will be set that the way to get a salary increase is simply to ask for it. You will then be held hostage to all the other raise requests that will immediately follow.

Instead, initiate a second conversation. Explain how the amount of money paid an individual is a function of two things: the value of the job itself and the quality of performance of the person doing the job. Ask the individual to examine both how she might enhance her performance and how her job can be made more valuable to the organization. What additional duties might she assume? How much extra responsibility is she willing to take on? How much extra effort is she willing to put forth?

When these issues have been successfully settled, the pay increase can be granted with both parties satisfied that they’ve gained from the transaction.

About the Author

Dick Grote is a management consultant in Dallas, Texas and the author of the new book, How to Be Good at Performance Appraisals, published by the Harvard Business Review Press in July 2011.

Originally, the process of converting a newly-hired stranger into a fully-contributing and knowledgeable employee was left to the personnel department’s most junior benefits clerk in the first-day orientation program, with the employee left to sink-or-swim her way to success from there. Today companies realize that there’s a high payoff in this unique early honeymoon period by making the new employee feel welcome and comfortable in his new surroundings, assuring the person that he’s made a good decision, and minimizing the time it takes to become productive members of their new workgroup.

Traditional orientation tasks, of course, must still be completed, whether all of them are done by the hiring manager or some of the load is borne by HR. Some paperwork must be handled. Keep in mind, though, that when your new hire goes home to tell his family about his first day on the job, he would rather have something more exciting to report than, “I filled out over 30 forms today.” The person should leave work the first day convinced that she made a good decision to join your company.

If you’ve got an HR department, find out what they’ll do to orient your new employee. Everything else — all the important stuff — is your job.

The experience of current employees can be extremely valuable, particularly those who themselves were recently the new kid on the block. Ask your current employees what they wish they had known sooner. Brainstorm a list of buzzwords and acronyms. And ask current employees what their plans are to help the newcomer get on board and up to speed. Don’t think you have to figure this out yourself. Make assignments.

A key assignment is to get one person to take responsibility for shepherding the newcomer to lunch every day. That doesn’t mean they necessarily have to eat together, but it’s wise during the first week for the newcomer not to be left lonely during lunch hour. And it’s ideal for everyone on the team to take the newcomer out to lunch on her first day as a ritual of celebration of her arrival.

Generic checklists for the conventional on-boarding tasks are easy enough to find, but don’t overlook some of the subtler items:

• Send out an e-mail to everyone in the office so they’re prepared to welcome a new employee.
• Set up the computer and configure the new employee’s e-mail accounts. Provide guides for any necessary software he or she will be using.
• Set up her phone system, and provide instructions for using voicemail. And the copier. And the fax machine. And the Blackberry. And any other items of office technology.
• Have a stack of business cards waiting.
• Designate a workspace and provide a name plate on his or her desk or office door as a tangible sign that you’ve prepared the space.
• Help the newbie learn names and jobs. Make an informal org chart of your department that spells out who’s responsible for what. Include your boss and her boss, too, along with any other people your newcomer is likely to run into.

It’s wise to assign a sponsor to help the new person get quickly on board. But make sure that the sponsor is a person that you want the new employee to emulate. Too often the assimilation process is shuffled off to the first available employee, including the most cynical, burned-out, turned-off and disengaged members of the staff.

Finally, a close review of your company’s performance appraisal form is one of the most important — and most neglected — onboarding tasks. Explain to the new hire your expectations about performance. Tell her what parts of the form you consider to be the most important. Explain how the rating system works, and the fact that a middle rating doesn’t represent average or mediocre but rather shooting par.

A good job of onboarding can take weeks off the learning curve and get the newbie up to fully-productive fast.

About the Author

Dick Grote is a management consultant in Dallas, Texas and the author of the new book, How to Be Good at Performance Appraisals, published by the Harvard Business Review Press in July 2011.

Audit the quality of appraisals, the extent to which the system is being used, and the extent to which the original objectives have been met. Demand 100 per cent uncomplaining compliance with deadlines and requirements. Provide feedback to management, appraisers and appraisees. Train new appraisers as they are appointed to supervisory positions. Actively seek and incorporate suggestions for improvement.

If the results of the performance appraisal are not visibly used in making promotion, compensation, development, transfer, training and termination decisions, people will realize that the whole process is merely an exercise.

About the Author

Dick Grote has been a management consultant for almost thirty years, specializing exclusively in the field of employee performance appraisal and performance management. His company, Grote Consulting, provides customized services in performance appraisal, performance improvement and talent management.