How employers can conduct effective performance appraisals for employees

October 2021

Staff appraisals can seem like a chore for managers and employees. However, as a business grows, monitoring the performance of your workforce is crucial. Read on for tips on how employers can conduct effective performance appraisals that benefit everyone in the business.

Employee reviews and appraisals are a valuable tool for enhancing and monitoring employee performance, engagement, and productivity. They can also be used to determine salaries and commission. 

To maximise the benefits, staff appraisals require structured preparation that’s linked to the company’s overall values. Your employees also need to understand the process and how it’s beneficial.

Make sure managers are on board

The backing of managers is key to effective performance appraisals and evaluations. If they aren’t engaged with the process, the results won’t be as useful.

The process needs to be seen as an opportunity to improve performance and as a positive step for everyone involved. Management needs to be championing appraisals and evaluations and be able to understand how they directly influence teams.

Staff appraisal forms

Before you conduct the meeting, ask your employee to fill in an appraisal form ahead of time. It will allow you to structure the conversation, document important points and record your employees’ achievements and goals. 

An ideal staff appraisal form should cover the following:

• the employee’s key competencies

• important achievements

• areas where an employee needs improvement

• resources and support the employee needs to improve or learn new skills

• to what extent they’ve achieved set goals and targets

• new actionable and achievable targets, goals, or Key Performance Indicators 

The questions on the form should be structured in a way that provides useful feedback specific to your organisation. Make the questions relevant to the roles in your business so you can assign clear goals based on the company’s objectives and values. 

Measure competencies

Having competencies at the heart of your employee appraisal process is a good way to ensure it’s effective. Implement a behavioural competency framework that reflects the core skills your business requires.

Some competencies may be personal characteristics that apply to all roles, like strong communication skills. Others might be job-specific, for example if the employee is able to use a certain piece of equipment that’s essential to their job.

Other areas you might like to measure include:

• Teamwork

• Customer service

• Attitude and cooperation

• Leadership

Ahead of the meeting, encourage your staff member to self-score their own competencies. It can be valuable to see how they perceive their own performance, plus it gives you the chance to talk about things you might have missed.

One way to score competencies is to use a one to five rating, as follows:

• Consistently meets expectations

• Often exceeds expectations 

• Meets expectations

• Meets minimum expectations

• Fails to meet expectations 

360-degree feedback

Want to get a better understanding of how your employee is performing on a daily basis? Include 360-degree feedback.

360-degree appraisals involve collecting feedback from a group of employees about their co-workers. You should select a representative group of staff including peers, managers, and direct reports. You could also ask clients and customers if appropriate.

Although these appraisals should run in conjunction with a standard appraisal, the process can help managers better understand skills, performance and working relationships.

For example, imagine you manage a driven, confident employee. They are punctual, come to work with a positive attitude and frequently demonstrate leadership skills. Chances are, their performance appraisal will be positive.

However, 360 feedback can identify areas of improvement you might have missed. Your employee’s colleagues might think the same person is dismissive of their ideas and a poor team player.

Keeping 360 feedback anonymous

It’s a good idea to keep 360-degree feedback anonymous. However, you might want to make manager comments attributable, so employees understand how their direct superiors view their abilities. If so, make sure you get permission first.

Whether feedback is anonymous or not should be made clear to employees in advance. That way, you prevent any confusion or embarrassment at a later date.

Staff should feel confident about sharing honest feedback without the fear of retribution from colleagues. They should also understand the benefits of why feedback is being gathered. 

Examples of 360 feedback statements

Create a questionnaire with statements that reviewers rate on a scale. You can also include free space for staff to add their own comments. 

Questions should be:

• relevant to the employee’s job

• written in plain English without HR jargon

• linked to the competencies you wish to review 

Examples of statements include:

• deals with conflict in a tactful way

• works well under pressure

• communicates well with other team members

• is open to feedback 

• motivates others to achieve their goals

• consistently meets deadlines 

Prepare for the appraisal meeting

Before the appraisal interview, gather information you have on the employee such as the completed form from the previous appraisal and notes from relevant meetings.

Give employees deadlines to fill in the appraisal form and the 360-feedback questionnaire. 

Carefully look through the answers and make notes. Work out average scores from the 360 feedback. If you’ve provided free space for comments, check for any common themes that may reflect issues that need to be discussed. 

At the appraisal meeting

Open the appraisal meeting with a general discussion to create a relaxed and constructive atmosphere. You won’t be able to run effective performance appraisals if your employees feel attacked and defensive.

Firstly, focus on the positives and what has gone well in the period before any concerns are discussed. 

Go through the employee’s self-appraisal form and discuss why they made particular points, particularly when it comes to competency scoring and how that compares with your views. 

Present the results of the 360 feedback and any common themes that have emerged. If there are some negative interpersonal skills or character traits that have been brought up, present them to the employee in a constructive way and get their feedback. Suggest ways that any shortcomings can be dealt with.

Consider areas for improvement and development. Even the very best staff members can improve. Look at what points the employee has raised about extra resources and support they need and discuss whether it’s possible. 

Work with your employee to agree measurable targets for the next appraisal. Look at what suggestions they have made and tweak if necessary. 

Here are eight questions you could ask during the meeting:

1. What were your biggest achievements?

2. What has been the most challenging part of your work?

3. How have you dealt with challenges you’ve faced?

4. Which part of your work do you enjoy the most?

5. Which part of your work do you not enjoy?

6. What would you change about company processes?

7. How do you feel you could be better supported at work?

8. How do you think your role contributes to the company’s overall performance?

Follow up after the meeting by summarising the appraisal meeting in a form and asking your employee to sign it. 

Everything you need to know about conducting effective performance appraisals

As a business grows, monitoring workforce performance is crucial. Appraisals help you do that.

The benefits of appraisals

• Identify employee strengths and weaknesses

• Provide feedback on performance to employees 

• Improve employee engagement and productivity 

Creating an employee appraisal form

Put together a form for your employees to fill in that covers:

• the employee’s key competencies

• the employee’s key achievements

• areas where an employee needs improvement

• resources and support the employee needs to improve or learn new skills

• to what extent they’ve achieved set goals and targets

• new actionable and achievable targets, goals or KPIs 

Implementing 360 feedback

Invite peers, managers, and direct reports to give feedback on the employee. Examples of statements for scoring include:

• deals with conflict in a tactful way

• works well under pressure

• communicates well with other team members

• is open to feedback 

• motivates others to achieve their goals

• consistently meets deadlines 

Employee appraisal meeting

Here are six steps to help you conduct an effective meeting with your employee:

1. Prepare for the meeting by gathering information on the employee such as the completed form from the previous appraisal and notes from relevant meetings

2. Open the meeting by focusing on the positives and what has gone well

3. Go through the employee’s self-appraisal form and discuss key points

4. Present the results of the 360 feedback and any common themes that have emerged

5. Consider areas for improvement and development

6. Work with your employee to agree measurable targets for the next appraisal