Performance review is a process that is carried out periodically in organizations (usually once or twice a year) and as its name indicates, it aims to evaluate the performance that employees of the company have had in their positions.

The aspects to be evaluated of each employee are determined by the competencies and/or goals (This process will be explained in more detail later).

Generally, the performance review process is led by the Human Resources department; however, the participation and collaboration of the entire company is required to execute it successfully.

As mentioned above, for the performance review each employee has assigned certain aspects on which he or she must be evaluated. Based on these aspects, the evaluation questionnaire will be generated.

For example, for illustration purposes, let's assume that the position of Receptionist has only two competencies assigned to it in its job profile. Which are Customer Focus and Responsibility. Let's imagine that each of these competencies was evaluated with only one item:

• Customer Focus:
  • He/She is kind to talk to the users.


• Responsibility:
  • He/She fulfills his assigned obligations.

Let us also assume that it is decided to evaluate this position at the competence level only (not goals). Given the above, the receptionist's evaluation questionnaire will consist of two items:

• He/She is kind to talk to the users.
• He/She fulfills his assigned obligations.

Let's assume again that the people who will evaluate the receptionist are her boss, a colleague, and she will perform her self-evaluation. Each of the three, when entering to evaluate the receptionist, will see something similar to this:
Each of the 3 will respond and based on the responses the receptionist's performance score will be calculated.

Note: The above example was made in an illustrative way, since generally each position has more than 2 assigned competencies, and each competency is measured with several items, not just one.

After having made this introduction with the aim of intuitively understanding how performance evaluation works,Different aspects of this process will be discussed in more detail below.

The type of performance evaluation is generally referred to in degrees. Therefore, it is common to hear about evaluations 90 degrees (90°), 180 degrees (180°), 360 degrees (360°), etc.

The key concept to understand why these denominations is related to the quadrants that are generated every 90 degrees:
So: 90 degrees (90°) = 1 quadrant, 180 degrees (180°) = 2 quadrants, 270 degrees (270°) = 3 quadrants, 360 degrees (360°) = 4 quadrants, etc.

Taking into account the above, each quadrant is interpreted as a type of evaluator:

Evaluación de desempeño 90 grados (90°):Only the boss evaluates the employee, so there is only one type of evaluator.

Evaluación de desempeño 180 grados (180°): The employee is evaluated by the boss, but it also performs a self-evaluation. Therefore, there are two types of evaluators.

Evaluación de desempeño 270 grados (270°): The employee is evaluated by the immediate boss, performs self-evaluation and is additionally evaluated by its peers. Therefore, there are 3 types of evaluators.

Evaluación de desempeño 360 grados (360°):The employee is evaluated by the immediate boss, performs self-evaluation, is evaluated by peers and is additionally evaluated by subordinates (employees of whom he/she is boss). Therefore, there are 4 types of evaluators.

Evaluación de desempeño 540 grados (540°): The employee is evaluated by the immediate boss, performs self-evaluation, is evaluated by peers, and is evaluated by subordinates (employees for whom he/she is the boss). Additionally, customer feedback (internal and/or external customers) is included in the evaluation. Therefore, there are 5/6 types of evaluators.

Evaluación de desempeño 720 grados (720°): This refers to two 360 degree evaluations. A first 360-degree evaluation is carried out, with the results obtained, action plans are generated, and after a period of time another 360-degree evaluation is carried out, with the aim of comparing results.

Note: Although the above classification is the one generally used, and also the one commonly found in the literature, it is not uncommon to find organizations/individuals that define the grades of a performance evaluation differently. For example, referring to a 720° evaluation with the definition given here of a 540° one. Beyond the differences in terminology, what is important is that there is clarity regarding which actors we want to participate in the process.

One of the fundamental elements of performance review is the items that each employee has assigned. For example, as mentioned above, one of the items that the person with the receptionist position would have assigned would be:

“He/She is kind to talk to the users.”

So here the question arises: How are these items generated for the hundreds or thousands of workers in the company?

The items that each employee will have assigned arise from the competences attributed to their position, therefore, derive from the the organization's competency model.

3.1 Competency model

The competency model is a deep topic that could be addressed in another article, however, for what interests in this guide, it is enough to say that it provides important information regarding:

1. What are the competencies that govern the company?

The competency model determines the competencies that the company expects its employees to have, as well as their definition.

Although there are different methodologies to define this, a common way to do this is to divide them into two groups:

• Transversal competencies: These are competencies that apply to all employees of the company, regardless of their position. For example, if a transversal competence is Results orientation, it means that we expect all collaborators to have developed, to a greater or lesser extent, this competence.


• Specific competencies: These are competencies that apply to certain levels or types of position. For example, for employees with staff in charge, it makes sense to evaluate leadership competency; however, it would make no sense to do it with someone who does not handle personnel.

2. ¿What competencies are assigned to the different positions in the company?

The competencies model defines the competencies assigned to each position. For example:
Points 1 and 2 serve as the basis for generating the items.

Note: In case the company does not have a competence model, the previous step to generate the items of the performance review is to define, at least, which are the competences that govern the company.

3.2 Methodology for item generation

Although there are different methodologies to generate the items, below we will mention the two most frequently used:

3.2.1 Item generation with focus on the levels of development of the competencies

Within the competency models of certain organizations, the following point is also addressed:

What level of competences development is expected for each position?
Suppose that a certain organization decides that its competency model will include the competency of Customer focus. Taking this into account, an observation that may arise is that in certain positions a greater development of this competence is expected than in others.

For example, it is normal to expect such competition to be much more developed in a commercial position than in an administrative position. Therefore, it would be defined that while the administrative position requires a Basic level of Customer focus competence, in the commercial position an Advanced level is required.

This means that we will have the information, not only of what competencies are expected from a certain position, but also of the expected level of each of these competencies.

With the above information the items are generated taking into account:

1--What is the competence?
2--What are the indicators that can allow to evaluate this competence?
3--What are the behaviours associated with each level of this indicator?

The following is an example for better understanding:
Thus, even though the administrative and commercial positions have the same assigned competence (customer focus), the items they will have will be different according to the level of competence assigned (basic, medium or advanced).

3.2.2 Item generation with a transversal focus

This methodology is based on constructing transversal items, that is, items that are generalizable and do not require discrimination based on levels. The items are generated taking into account:

1-- What is the competence?
2-- What are the indicators that can allow to evaluate this competence?
3-- What are the transversal behaviours associated with this indicator?

As can be seen, the first 2 points are the same in both methodologies, what varies is the last step. Let's see an example of item construction under this methodology:
This item, as can be seen, is much more transversal and applies to any position that has contact with customers.

It is important to emphasize that the transversal items implicitly bring a leveling associated to the context.

For example, given the item "He/She deals with the customers properly", the same criteria will not be applied to a person in an administrative position who requires a basic level of this competence, compared to a salesperson, who requires an advanced level.

Surely, in the first case, for the evaluators to give a high score to the evaluator it will be enough for the person to be respectful in his manner, however, in the case of the commercial position, much more will be demanded than just this.

It is worth mentioning that, although transversal items are created, sometimes some adjustments associated with levels or types of charges must be made.

Suppose we are going to evaluate the Accountability dimension (competence), one of the indicators will be punctuality and the item will be "He/She is punctual in the time of arrival at work".

This is an item that is quite transversal, however, someone could argue that in certain companies this item would not apply, for example, to senior management positions, given that they are constantly out of the office. Although initially this may seem a drawback of this methodology, the way to handle it is relatively simple. What would have to be done is:

1 -- Evaluate if it is correct that the competence is associated with such positions. In this case the question would be: Should senior management positions really have the Accountability competence associated with it? If the answer is No, the problem is solved by not measuring that competence in those positions.

If it is determined that the position should have this associated competence:

2A) Keep the indicator, but change the item. That is, we will continue to measure Accountability and we will continue to use the Punctuality indicator, however, we will modify the item to fit these positions. For example, the item for these positions could be: “He/She attends on time the meetings that have been cited”.

2B) The other option is simply to remove this indicator for certain positions. In this example this would mean that senior management would be measured on the competency of Accountability, however, it would not include any items associated with the punctuality indicator.

Whichever option is chosen from the last two mentioned, it will mean that there are two versions of a competence.

Regarding our example, there will be Accountability-1 (which will be associated with most positions) and Accountability-2 (which will be associated with senior management).

Regardless of the methodology used, the final result is that there will be competencies to be evaluated and items to do so. The next step will be to assign this information to the different positions in the company. This will be one of the topics to be addressed in the next chapter.

In the previous chapter, we discussed the generation of the items to be used in the performance evaluation. To assign this information to the different positions, the competencies assignment matrix will be utilized.

4.1 Competencies assignment matrix

This matrix will map which competencies, and therefore which items, are assigned to the different positions.

Usually this matrix is created in spreadsheet software (e.g. Excel) and will look like this if an Item Generation methodology was used with a focus on transversal items:
On the contrary, if an item generation methodology was used with a focus on the levels of development of the competencies; it will be similar, however, it will contain as additional information what is related to the levels of competencies:
Regardless of the matrix used, in the end we will have as a result the mapping of the competencies to be evaluated for each position. That is to say, the items assigned to each position will have been defined.

This matrix is indispensable in the performance evaluation process, as is the matrix of evaluators.

4.2 matrix of evaluators

As the name implies, this matrix is used to determine the evaluators of each evaluated.

In other words:

Since each employee will be evaluated by a particular person, it is required to define who these people will be. This matrix looks like this:
This matrix, like the previous one, is also indispensable for executing the performance evaluation process, since without it it will not be known who should evaluate whom.

Until now, in the different chapters, we have seen key elements in the performance evaluation process. Next, we will cover how these elements fit into the step-by-step execution of a performance appraisal.

Although there may be slight variations according to the particular context of each company, the steps that are generally executed in a performance evaluation are presented below: