If you’ve worked in a large organisation, then you may have experienced an appraisal as little more than box-ticking. The result is often apathy and a missed opportunity to boost performance. A truly effective appraisal system, however, will allow you to motivate staff, monitor their performance against the achievement of your overall strategy, reward their successes and address under-performance.
Your appraisal system should start with your vision and, ideally, the appraisals should help to inspire your team to put it into practice. “The manager needs to be living and breathing the business strategy, and appraisals are the chance to bring people in line with it,” says John Valentine, managing director of marketing company Red Communications. “We find they are motivating and particularly beneficial for inexperienced employees.”
Debra Charles, managing director of Novacroft, a business that processes and manages data for the transport ticket and energy market, agrees, saying: “Over the past 10 years, we have sometimes had difficulties in cascading our plan down to team members and recognising contributions to the overall business. I think most businesses find this hard to achieve.”
Charles and her team decided to adopt a structured approach to setting targets by breaking down the business strategy into “developmental implementation plans”, with accompanying timelines. In this way, each division and team has a plan to work towards, and a clear way of measuring performance. Personal reviews every quarter focus mainly on meeting individual targets from the developmental implementation plans. However, Charles points out that in certain areas, such as software development, it is hard to set tangible targets, so some flexibility is built into the system. Less quantifiable behavioural issues are also flagged up in the appraisal, where necessary.
Smart and tailored
At the individual level, this will result in each member of staff having targets or SMART (specific, measurable, achievable, relevant and time-based) objectives. These measures will allow the individual to understand how they contribute to the achievement of the strategy, while enabling you to judge their performance more objectively and identify areas for training, guidance and improvement.
It’s important, particularly in a small organisation, to tailor each appraisal to the individual, as one size does not fit all. Be clear about what constitutes a good job by ensuring that an employee’s targets are fit for purpose, and be clear about the method of review – even if it’s bespoke.
“Appraisals at Red are very much designed for the individual,” explains Valentine. “I have found that the most motivating thing in business is for people to feel they are making progress and doing well. Appraisals provide a structure to do this and they highlight the next steps.”
As the owner manager of a fairly small company, Valentine can observe performance on a day-to-day basis. “I write down comments over a period of time, so it is both thoughtful and precise,” he says.
He prefers this approach to using a list of targeted objectives, which he thinks can be difficult to apply. Nevertheless, he still uses appraisals to communicate his plans for the business to each member of staff. Red has one overall goal, to achieve profit growth of 20%, which is known throughout the business so that everyone understands how they can contribute going forward.
One approach is to talk regularly in both individual one-to-ones and team meetings, with a more formal appraisal at year-end. The frequency of performance reviews will depend on how long the employees have been with the business and how capable they are. For new employees, you might want a one-to-one review every month.
Rather than a school report, an appraisal should be a talk between people who work together. Both appraiser and employee should prepare in advance, and then compare and discuss. Let the employee do most of the talking, and focus on results, then move on to career ambitions.
Feeling good
Sometimes it’s just as hard to give feedback as receive it. As an appraiser, remember that your employee is more likely to improve their performance when they’re feeling good about what they can do well. Take Tiger Woods, for example. When he’s not putting well, rather than practising immediately, he works on the better parts of his game, so he can feel good about himself before focusing on his putting.
Appraisals don’t need to last more than half an hour or so, but remember that employees have a far greater desire for feedback on their performance than you may realise. Although people like to be praised for good work, they would also prefer to be held accountable over being ignored. It’s a good idea to concentrate on questions like: “Where do you feel that you’re achieving your targets/contributing well?”, “How are you doing?” and “What can I do to help you perform?” You might want to structure the discussion along the lines of: “What can you start doing?”, “What should you stop doing?” and “What should you continue doing or do more of?”
Valentine views appraisals as a meaningful way to discuss feedback based on personal performance and skills. He calls it a feedback sandwich: a positive talk about performance and achievements, a talk to identify areas to improve, then a positive discussion of future aims. “It is a passion for me,” he says, “that the most important thing people can have is the correct attitude. They want the business to do well. Appraisals can tackle head-on any issues a manager may have with attitude by giving examples of good and bad.”
Handling problems
