Staff appraisals are a great way of managing staff morale, helping to develop your workforce and highlight the areas where you have strength in your team but also areas where you may need to fill a gap, either with training or by taking on someone new. But appraisals only work if handled in the right way, with a clearly defined process and a positive approach with everyone bought in.

What is an appraisal?

An appraisal is a performance review, carried out at a regular interval – often annual or twice-yearly. It’s the opportunity for employee and employer to look back at the performance of the employee against agreed targets or objectives, and to set out new objectives for the coming period.

Appraisals are not a legal requirement, but it is widely viewed as best practice to implement them in your business. Appraisals may be carried out purely as a record of achievement, but often they are linked to a rewards scheme, such as pay reviews.

Who should have an appraisal?

There’s an old school of thought that appraisals are only really suited to ‘white collar’ employees, i.e. those based in an office setting. More modern thinking is that it’s better to be inclusive of everyone – to avoid creating an “us vs them” culture. Every employee, regardless of their role, can have objectives or processes against which they can be judged, and it’s vital that you’re fair by giving everyone the same opportunities to discuss their performance.

Appraisals suit any business too – they shouldn’t just be the reserve of mid- and large-sized businesses. Indeed, small businesses can often carry out a more effective appraisal system, as senior management are more likely to know each employee better, and can therefore deliver a more honest and meaningful appraisal. Plus, within a small business, it can help each employee to know their potential progression path, so they can see how they can grow as the business does.

In terms of who carries out an appraisal, it is often best that it’s an employee’s line manager. The benefits of this are two-fold: the manager likely knows the employee better, and it helps to develop the experience of the manager too. The alternative, where a more senior member of management carries out an appraisal, can make an employee feel more valued as they feel they’re getting access to, and attention from, more senior staff. What may work best is a joint approach – an appraisal carried out by a line manager, but signed off with comments from more senior staff.

What are the benefits?

The purpose of an appraisal is to show an employee where they are doing well, and also where they can improve. By highlighting strengths, you can show employees that you recognise their contributions, and then by looking at weaknesses you can identify where training is needed to help the employee to grow and become more efficient. This can also identify potential promotion pathways, giving the employee something to work towards.

The other major benefit of an appraisal is improved communication. It gives the employee valuable time to share any ideas, concerns or other opinions in a structured environment, and it improves their morale by giving them dedicated time with a manager that’s all about them.

Provide training to your managers

A manager can’t be expected to deliver effective appraisal meetings without any kind of formal training or experience. It’s therefore vital that you offer at least some written training on how to complete the appraisal form you create for your business. What would be better would be to hold training sessions with the chance for managers to carry out mock appraisals, and to compare notes to ensure consistency across the business when people are being reviewed or scored against criteria. This will help ensure you don’t have some managers judging people more harshly than others, which can be a killer for morale once employees start discussing their results.

Implementation is key

As appraisals take place often months apart, it can be easy for them to slip. Also, some managers may be reluctant to give their employees appraisals, due to time constraints or even just a fear of carrying out a formal performance review.

If you’re going to implement appraisals in your business, you need to make sure everyone is fully bought in, and that you can trust your managers to deliver them regularly as needed. All of the benefits are undone if they start to become irregular, or not everyone gets one, and the negative impact on morale can be catastrophic.

Giving employees the opportunity to appeal

Whether your appraisals are linked to reward – financial or otherwise – or they’re simply to help employee development, it’s important to have a clear appeals process in place should employees need it. An employee may feel they’ve been unfairly judged or reviewed, either due to disagreements with their manager (which are sometimes unavoidable) or because of some evidence that they’ve not previously made anyone aware of.

Ensure that, as part of your appraisal scheme, you have a clearly defined appeals process that makes it simple for an employee to challenge their report, and set out the steps of what action will be taken so that each employee is confident they’re being listened to.

How the appraisal should work

Managers should book in an appraisal meeting with advance warning, so the employee can prepare. They should be given a considerable amount of time, at least an hour, so that the employee feels they can share all their thoughts comfortably.

Give the employee a self-assessment form in advance. This will help them to prepare their thoughts and feelings, so that the meeting is more structured, and they get the chance to share all their views, rather than those they can remember on the spot.

During the interview, there’s a chance that the employee may be nervous. Make sure that the seating is comfortable, and you conduct the interview in a relaxed manner. Also, ask open questions that encourage them to talk, rather than those that simply need a “yes” or “no” answer. Leave silences – the employee will fill them.

Once the meeting is complete, you should complete an appraisal report and allow the employee to sign it to confirm their agreement with the plans you’ve put in place. This should be recorded, as it’ll serve as a good comparison for their performance in their next appraisal.

Making staff appraisals work

Staff appraisals do work – they have a number of benefits to both employee and employer. But that’s only if you give them the attention they deserve. Put formal appraisal procedures in place, and monitor managers to make sure they’re carrying out appraisals with staff, and you’ll reap the reward.