Most people know what to expect when it comes to a traditional performance appraisal, but there are some extra tips and tricks to make them as useful for your team, and ultimately, your business.
Conducting an effective employee appraisal is an essential part of managing a high-performing team. Why? Well, appraisals give managers the opportunity to evaluate an employee's performance, set future goals, and create development plans. When done correctly, appraisals provide valuable feedback that helps employees grow in their roles while aligning their efforts with the company's objectives. But, if they’re not handled properly, appraisals can feel stressful or even demotivating for employees, so it is important to get to grips with the key steps for conducting fair and constructive employee appraisals.
In this guide, we’ll take you through everything you need to know, including goal setting, providing regular feedback, evaluating performance, creating development plans, and ensuring everything is documented for HR records.
Employee appraisals are also known as performance reviews or evaluations in some businesses. In short, they are a formal assessment in which a manager reviews an employee’s work performance over a specific period. An appraisal typically involves evaluating how well the employee has met their job responsibilities, achieved goals, and contributed to the team or organisation.
During an appraisal, the manager and employee discuss the employee’s strengths, areas for improvement, and development opportunities, which helps ensure that employees receive structured feedback and that their work aligns with the company’s overall goals.
The main reason organisations carry out appraisals is to evaluate employee performance, but they also serve several other critical functions as well. Here are some key purposes of an employee appraisal:
Preparation is key to conducting a successful appraisal, so always start by gathering all the relevant information on the employee’s performance throughout the review period. Here is a starting list of things you may wish to include:
Top tips for preparing for a performance appraisal:
One of the most important parts of an employee appraisal is goal setting. In order for the appraisal to be effective, both the manager and the employee must have a clear understanding of the goals that should have been set at the beginning of the review period.
When setting goals, they should be SMART: Specific, Measurable, Achievable, Relevant, and Time-specific. This ensures that the employee knows exactly what is expected of them and that their progress can be easily tracked.
Key questions to consider during a performance appraisal:
While the appraisal itself is a formal process, feedback should be given regularly throughout the year as waiting until the appraisal to address performance issues or praise accomplishments can make the process feel disconnected from the employee’s day-to-day work, and a bit ‘out of the blue’.
Providing regular feedback ensures that employees are aware of how they are doing in real-time and means that managers can coach and guide employees before issues become major problems, in turn helping to build trust. During the appraisal, reference any feedback you’ve already given, whether positive or constructive, so the employee can see how their performance has evolved over time.
Tips on providing regular feedback:
When evaluating your employees’ performance, it’s extremely important to use objective criteria to ensure you are being fair and unbiased with your feedback. Basing your appraisal on quantifiable data, measurable outcomes, and specific behaviours helps avoid bias and provides a clear picture of the employee’s contributions to the business.
Consider the following performance evaluation criteria:
When reviewing each of these areas, back your assessments with examples and evidence. This ensures the employee understands the reasoning behind your evaluation and can work on specific aspects of their performance.
Step 5 - create a clear development plan for your employees
One of the most important components of a constructive appraisal is creating a development plan for the employee’s growth that they can refer back to and use as a tracker to keep on top of performance and areas of growth. Based on the feedback given, identify areas where the employee can improve and develop new skills, then outline steps and resources that can help them achieve their goals.
Key components of a personal development plan:
You should work with the employee to agree on these development areas to ensure that they are both realistic and supportive of their career growth. They should be agreed by both you and your employee, so you have a clear direction of travel for their professional growth and development.
Once the appraisal is complete, it’s important to document the discussion, performance evaluation, and any agreed-upon goals or development plans to make sure that both the manager and employee have a record of the conversation, which can be referenced in future appraisals or if any issues arise.
Proper documentation is also essential for HR purposes, especially when appraisals impact decisions related to promotions, salary increases, or disciplinary actions. Ensure that all records are stored securely and shared with the relevant HR personnel.
Conducting an employee appraisal is an opportunity to provide valuable feedback, set meaningful goals, and support the personal and professional development of employees. By preparing thoroughly, setting clear expectations, providing ongoing feedback, and focusing on growth and development, managers can create a fair and constructive appraisal process that is beneficial for not only the employee, but the organisation they work for too.
Remember, the goal of an employee appraisal is not just to evaluate past performance, but to pave the way for future success. When employees feel supported, recognised, and rewarded, they are more likely to be engaged and committed to the success of the organisation, which is why appraisals are a crucial part of any successful business.
Get in touch with GoodShape today to learn how our services can help you streamline your appraisals process.