What should employers consider before conducting employee appraisals?

As we near the end of 2022 some employers may be preparing to conduct annual end of the year performance appraisals. When done well, employee appraisals can be a valuable tool for employers. They give you a chance to provide feedback, address performance issues and set goals for the future. They also provide your employees with an opportunity to communicate any concerns they have and discuss their training and development needs.

This article discusses things you as employer should consider in order to get the most out of employee appraisals.  

Performance criteria

The criteria against which you measure employees’ performance should be clear, objective, and relevant to their role. Take care to avoid criteria that may be perceived as discriminatory. Roles with similar duties and skill sets should be subject to similar performance criteria.

When devising performance criteria, consider your reasons for conducting appraisals and develop the criteria with these reasons in mind. Are they to help you make future decisions regarding redundancies, raises and promotions, or is the focus more on goal setting and employee development? If your organization already has standardised performance criteria it may still be worth reviewing if it is still fit for purpose with these objectives in mind.

Format of the appraisal

Employee appraisals should be a two-way conversation between you and your employees. Employees should be encouraged to share their own goals, request support and training and raise any concerns they may have about the business. Try to structure the review in a way that encourages open discussion. Conduct the meeting in a quiet, private place and allocate enough time to have a meaningful discussion. Have a plan for how the appraisal will go and make notes of any points you want to discuss.

Employees should also be given a sufficient opportunity to prepare. This includes giving them reasonable notice of when their appraisal is set to take place and supplying them with copies of any forms or criteria which will be used to evaluate them.

Addressing poor performance

If an employee has not been performing up to required standards, their annual performance appraisal should not be the first time they are made aware of this. Employees should be provided with regular feedback by their managers throughout the year so that there are no surprises when it is time for their performance appraisal. Nevertheless, a formal appraisal is a good opportunity to look closely at areas where the employee is falling short, and set a plan for improvement.

Before diving straight into the negatives, highlight the employee’s strengths and things they have done well. This helps frame the appraisal as a positive experience and may put the employee in a better state of mind to receive criticism.

When the discussion moves on to the employee’s shortcomings, these should be rooted in objective fact, not just the subjective feelings of the reviewer. The person conducting the review should be prepared with concrete data or specific examples of where the employee has failed to meet the required standard. For example, a record of times the employee has missed important deadlines is a stronger, more objective example of poor performance than a subjective statement such as “I feel you are a bit disorganised.”

When discussing these areas the focus should be on how the employee can improve and ways the business can help facilitate this. Allow the employee an opportunity to explain why they believe their performance has fallen short, and any measures or training they feel would help them improve.

Training for managers

Conducting effective performance appraisals requires several skills such as:

• Active listening
• Asking open ended questions
• Communicating constructive criticism

You may consider offering members of your management team some additional training to help them develop these necessary skills.

Another factor to consider is the effect unconscious bias may have an appraiser’s perception of performance. Requiring managers to complete regular unconscious bias training may help mitigate this effect.

After appraisal

Once the meeting is complete, the appraiser should create a summary of what was discussed in the meeting and any goals that have been set. The employee should be given a copy of this and allowed the opportunity to add their own comments. Once the employee and appraiser agree on the contents of the summary, both parties should sign a copy. This can then be reviewed throughout the year at your regular 121s as well as at the next formal appraisal, to help evaluate the progress the employee made over the past year. We would always advise that this document is used throughout the year.  You will find that your employees are much more focused on their goals and objectives if they are talked about regularly.  If they are only discussed at the yearly appraisal the document can quickly become out of date and the danger then is that it just becomes an admin exercise.

You may also want to set a date for a more formal follow up meeting, to take place a few months after the appraisal itself to check in on the employee’s progress in meeting their goals. In our experience 2 or 3 of these each year works well.

If you have questions about conducting performance appraisals, or want advice on how to address an employee’s poor performance, contact our employment solicitors at employment@warnergoodman.co.uk or call 023 8071 7717.