Employee Appraisals: Guide for Employers

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Andrew Willis

Andrew Willis

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01 Oct 2021

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An appraisal at work is a way of evaluating staff to determine their value to your organisation. The outcome of this review provides the bases for promotions, pay increase and other benefits.

When done correctly, it should form part of an effective performance management system. This will help you measure the progress of your staff.

This post explores how effective performance appraisals can increase employee performance. It also takes a look at how this increase improves their overall engagement.

What is an appraisal at work?

It’s a meeting between you and your employee to discuss their work performance. It also provides you with the opportunity to understand their abilities for further development.

Performance reviews aren’t a legal requirement. However, they’re a great way for you and your staff to have a dialogue about important work issues. They’re also an effective way to measure and manage your employees’ productivity and growth within the business.

Objectives of employee appraisals include:

  • Defining employee’s roles and responsibilities
  • Identifying strengths and weaknesses
  • Determining compensation and pay packages
  • Providing performance feedback to a staff member
  • Receiving feedback from the employee
  • Improving communication

The purpose of staff appraisals is to measure and improve the performance of your workforce. The desired result is to increase every employees’ potential and value to the company.

How to do a staff performance appraisal

While most employers recognise the importance, not all of them know how to conduct appraisals with an employee.

The first step to conducting an appraisal is planning.

You’ll need to the following:

  • Data relating to the employee’s performance
  • Notes from their previous review meeting
  • Information on future goals
  • Objectives to set

Use this information to create an agenda that’ll help guide the direction of the meeting.

During the meeting, you’ll discuss their challenges and successes within that period. This part should include information on how an employee can improve their performance to reach targets.

The main focus of the staff appraisal process should be on the future development of the staff member. It’s important to come up with an action plan for how they can meet their individual targets as well as contributing to the overall company goals.

Employee performance appraisal methods

There are various methods with which organisations use to measure the performance of their employees. They all have their own strengths and weakness.

While one method may work well for an organisation, it may not for another. It’s important to determine the method that works for your business to evaluate your employee appraisal.

In their 1997 book Managing Human Resources, George Strauss and Leonard Sayles divide the methods into two categories

  1. Traditional methods.
  2. Modern methods.

The traditional method rates an individual’s personality traits. This includes areas such as loyalty, judgement, knowledge capacity, etc. Modern methods, however, develop on that. These focus on the evaluation of job achievements.

Traditional performance appraisal methods include:

  • Rating

List a number of factors and rate them on a numerical scale according to performance.

  • Forced choice method

Provide employees with ready-made statements about an employee that they can only answer ‘yes’ or ‘no’ to.

  • Checklist method

List employee traits in the form of statements with ‘yes’ or ‘no’ answers. Upon completion, send to HR or a senior manager for evaluation.

  • Essay evaluation

Create a detailed description of an employee’s performance. Include details of their relationship with co-workers, strengths and weaknesses etc.

  • Critical incidents method

Record critical behaviours of each employee in relation to performance. Take these results into consideration when evaluating performance or considering promotions and bonuses.

  • Confidential Method

These are more common in government departments. Evaluate employees based on various parameters including attendance, leadership, self-expression, responsibility, integrity, etc.

Modern performance appraisal methods include:

  • Management by objectives

Work with employees to set goals and performance standards. Compare the goals achieved for the given period to the goals originally agreed upon. Take steps to improve employee performance and conduct reviews periodically.

  • Assessment centre method

Measure the organisational, interpersonal and planning ability of employees. This helps determine the training and developmental needs of your staff.

  • Behaviourally Anchored Rating Scales (BARS)

Use qualitative and quantitative data to rate employees. The process compares their performance with a similar numerical rated behaviour.

Other modern performance review methods including the 360-degree method and human resource accounting.

Expert support

If you’d like more information on any of the methods mentioned above, or need someone to conduct an employee appraisal for you, we can assist. Speak to one of our HR consultants today on 01455 858 132.

About the Author

Andrew Willis

Andrew Willis is the senior manager of the Litigation and Employment Department and assumes additional responsibility for managing Croner’s office based telephone HR advisory teams, who specialise in employment law, HR and commercial legal advice for small & large organisations across the United Kingdom.

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