The Performance Appraisal Audit for Audit Team Members

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How to Conduct a Performance Appraisal Audit for Your Audit Team Members

While most companies have feedback conversations happening year-round, many still follow the traditional annual performance review, where bonuses, raises, and promotions are at stake. Talk about a high-pressure situation!

An approach that consists of circling numbers, handing an audit team member a form, and communicating your demands, is no longer acceptable. If you’re still operating that way, your audit team may not be as engaged (and especially not as innovative) as they could be.

We won’t debate on whether or not this is still the best approach (spoiler alert: the majority of research and experts say “no”). But we will dive in and look at some questions you should be asking yourself as an audit team leader, and some strategies for making your team’s review cycle better than before.

Let’s dissect two different aspects of the annual review – the evaluation and the conversation — and uncover some strategies for maximizing the impact the annual performance review can have for your audit team.

The Evaluation

This is the form itself. And we’re going to get a little meta. Here are some questions to assess your evaluation (or, to make an industry pun, let’s audit your evaluation).

The Questions Asked:

Are you gathering qualitative or quantitative data with the questions you ask?

Are you asking open-ended or closed questions? (Meaning questions that leave room for details or questions that are a yes/no, numerical rating, etc.)

If you ask closed or quantitative ranking questions, is there room to clarify why the score or answer was given? And is this clarification mandatory? (Hint: If not, it should be.)

Question the use of numerical or completely qualitative or closed-ended questions or scales that are given without chance for qualitative inputs (that factor into the total score). This provides a lot of room for variability, especially when different managers across the organization use the scale differently.

For example, one audit manager who says:

“I never give out 5s because it’s impossible to be perfect and there’s always room for someone to improve.”

And then another manager who believes:

“If an employee is doing their job at a consistent level, why shouldn’t they get high scores? Giving them a 3 for ‘meets requirements’ just seems mean when they’re doing their job right.”

Then the scores go into an organizational ranking, bonuses are distributed, and one manager’s group is in a CLEAR advantage.

Then the conversation becomes over the semantics of a ranking instead of actual progress towards improvement and coaching. Especially when scores are being compared across departments, standardization in scoring is essential.

The People Involved

How are you setting up the evaluation process for each party involved? Here are some questions to help guide this process.

Are employees given this form to know how they’ll be evaluated annually upon joining the company? Is the employee’s manager having a one-on-one conversation with them to establish expectations in light of evaluation standards further?

Is a scheduled performance evaluation conversation a standard part of the review process? If not, that needs to change. If so, the following section covers a few areas of consideration.

Do both parties fill out the evaluation simultaneously? Or do your employees fill out something different? This can be argued either way, but no matter how it ends up, both parties coming to the table prepared to talk about performance in a similar frame of reference is essential.

And while you’re completing the evaluation for each member of your team before you can have a truly effective performance conversation, make sure you can objectively answer the following:

  • Am I giving each person equal resources?

  • Am I giving each person a proportional amount of attention?

  • Am I showing appreciation in a balanced way?

  • Am I giving each person an equal opportunity to succeed?

  • And if not, this needs to be reflected in how you evaluate each team member.

  • The importance of asking the right questions, in the right way, cannot be overstated.

The Conversation

The forms are filled out. A one-on-one meeting is set. And both parties are prepared to discuss the employee’s performance. From the manager’s perspective, it’s paramount to come into this conversation with an open mind and a willingness to alter your evaluation based on the conversation.

Before the Conversation

Consider doing your initial evaluation in “pencil” instead of ink. Have your notes or initial scores before having the conversation but be amenable to changing them after the conversation if appropriate. For example, if an employee understands his responsibility to be X, but the manager views it as Y, but Y was never clearly communicated.

Before the conversation, make sure the meeting is set in a neutral place. Your office — with you behind a desk and the employee in a less-comfortable chair — is not ideal. This communicates a nonverbal barrier and inhibits open conversation. Instead, meet at a conference table, in a private area that’s not your office, or in a neutral zone where both parties are equally placed and comfortable.

During the Conversation

Rather than start the conversation, have your team member kick things off by sharing their thoughts. Most of us are our own worst critics. By openly listening to your employee first, you can discover what makes them tick, where they are concerned, and even where they might be able to add more value to the team beyond their job description.

If the questions below are not a part of your original evaluation set, make sure they are part of the conversation.

  • Where do they feel they need additional resources to succeed?

  • What challenges do they face?

  • What parts of their job do they like the most?

  • What changes would they like to see?

  • Where do they feel they could improve?

  • Where do they feel they are succeeding?

All of these questions — and more — should be part of the conversation.

In the case of under-performing employees, the real value of the conversation is getting to the bottom of WHY an employee isn’t meeting standards and expectations.

In the case of over-performing employees, the conversational value can arise in letting the employee bring ideas for improvement to the table — ideas that can impact the entire team or organization.

And for those employees meeting standards, the conversation can revolve around growth in all areas, empowerment, and potential.

No matter what, comments for any employee need to be specific. Telling someone, “You’re doing a great job,” is NOT helpful. “You’re doing a great job in managing the high-value clients on your list, especially with your post-meeting report structure,” IS helpful.

After the Conversation

The conversation is drawing to an end. Both parties have been heard. What’s happening next?

One of the big reasons meetings fail is that there is no confirmation of progress or activity. Make sure to clarify the next steps!

It’s imperative to check for mutual understanding so all parties know the takeaway objectives, directives, and courses of action. There needs to be immediate, documented follow up, and a sign-off on the plan by both parties. Communicate follow-up actions, responsibilities, and timelines that accompany these actions. Have team members take responsibility for their tasks and state clear deadlines.

These are three things you need to do, at a minimum, for each follow-up action.

  • Employee to do TASK by DATE.

  • Manager to provide RESOURCE by DATE.

  • TASK to be revisited by manager and employee on DATE.

Performance reviews are often viewed as arduous, time-consuming tasks. But they don’t have to be. If you have the right evaluation form in place, guidelines that create open conversations, and action plans issued, performance reviews can instead be seen as the catalyst for empowerment and change within the internal audit department.

When is the last time your group has reviewed or modified its performance evaluation process?

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Robert Stroud and DevOps for IT Auditors