The beginning of a new business year is a time to assess where the business is going. It’s also a chance to evaluate your employees’ performances and how they will help achieve the coming year’s business goals.
The most common way to evaluate an employee’s progress is a performance appraisal.
What is a performance appraisal?
Most often, a performance appraisal is an open chat between an employee and their line manager. Performance, goals, and concerns are some of the topics covered. It’s sometimes mistaken for a chance to negotiate pay, although it is a separate exercise. The real crux of the matter is often forgotten about ─ the appraisal itself.
To make the most of the exercise, your performance appraisal should follow five key elements. These are:
- Measurement: Assessing the employee’s performance against any agreed targets or objectives.
- Feedback: Provide information on performance and progress. Discussing what’s also required to continue to perform well in the future will help both parties.
- Positive reinforcement: Highlight what the employee did well, and provide constructive criticism on what can be improved.
- Exchange of views: State how employees can improve their performance and what support they need.
- Agreement: Both the line manager and the employee should come to an understanding of how to improve and sustain performance.
Find common goals
Essential to the performance appraisal process is the company’s overall vision. An individual employee’s objectives should feed into this to ensure all are working toward common goals.
This is also where the majority of appraisals break down. Line managers and employees can agree on objectives, but they do not see how these feed into the larger objectives of the company. All elements of the business must be aligned and pulling in the same direction.
For instance, a company’s main target may be to increase customer retention. If so, discuss how the employee will help achieve this goal. They could be set the goal of increasing customer service standards in order to improve retention. Sounds simple, but this is where many appraisals go wrong and do not align the needs of the employee to that of the business.
Performance appraisal benefits
An appraisal is a potential goldmine of useful information for an employer. It is a frank and open discussion about the good and bad points of an employee’s role with their line manager. They can discuss what they find difficult, what they need more training in, and what would improve the role.
If the line manager asks the right questions, an appraisal can be of great benefit to the organisation going forward. By considering employees’ point of view, morale will increase as employees see their opinions are taken on board and implemented.
If you need help with performance appraisal, contact us on 0818 923 923. You can also complete a contact form to speak with an expert.
