The very word "appraisal" can strike fear into the hearts of both manager and employee. But, carried out with care, an appraisal can be both a useful business tool and a way of boosting staff morale.
A good, well-structured appraisal can help your business to measure and review its progress, spot ways of expanding and improve efficiency. It can ensure that staff feel valued and have a clearer understanding of their aims and role within the organisation.
But isn't my business too small?
Appraisals can be most effective in smaller companies because the manager has a closer working relationship with the employee. The best appraisal systems are the simplest and shouldn't generate too much paperwork. But, whatever the size of your business, make sure the manager is given training and time to prepare for the appraisal.
Appraisals should never replace the day-to-day management of staff. How often you hold an appraisal depends on your industry, the type of job being assessed and how long the person has been in it.
Most companies rely on annual appraisals, although the Institute of Directors thinks quarterly sessions are ideal. If your business is a fast-moving, hi-tech organisation more frequent appraisals will help the staff and managers to keep up with changing goals and strategies.
Staff who can benefit from more than one appraisal a year:
Decide whether you link the appraisal to rewards: pay review, share scheme, a bonus or promotion. Opting for the anniversary of the employee's arrival should ensure that the process is not muddied by comparisons with other staff or concerns about pay. It also allows managers to spread the appraisals over time.
The most common forms of appraisal:
Rating: Draw up a list of specific elements in the job to be assessed, for example, safety awareness. Rate the employee on each using a number - say, from one (excellent) to six (unacceptable). If performance is hard to measure score staff on their skills such as: leadership, team working, initiative and flexibility.
Pros: simple to devise and easy to understand.
Cons: managers often play safe by scoring staff around the middle number. Avoid this by using an odd number.
Critical Incidents: The manager keeps a record of specific times when the staff member turns in a good or bad performance throughout the year. These are discussed when they happen but also form the basis for appraisal.
Pros: Managers are less likely to focus on the recent past, the employee
is judged on specific incidents and has an idea of what to expect at the appraisal.
Cons: This only works if there are enough incidents. It may not suit all industries.
Objectives: manager and staff member agree new objectives at each appraisal . The next meeting concentrates on how far these objectives have been met and looks at ways of solving any problems - for example, offering training or more resources. Business Link suggests following the SMART rule. Any objective should be: Specific, Measurable, Achievable, Realistic and Timed.
Pros: Staff and managers are clear about their common goals.
Cons: This system doesn't take account of changing conditions such as an economic downturn.
360-degree: A variety of people describe the employee's performance, usually through a questionnaire. They might include the line manager, peers, staff working under them, even customers and suppliers.
Pros: Provides a broader picture of their performance.
Cons: It's costly, time-consuming and must be handled sensitively.
Discuss the appraisal findings in an interview which you should set aside at least an hour for. Give the member of staff plenty of notice; a self-assessment form can help them prepare for it. Your written records of the interview should include:
An employee should see a copy of the report and the manager must follow through any suggestions made in the interview such as training or improving working conditions.
Business Link www.businesslink.gov.uk
Institute of Directors: www.iod.com