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What are appraisals and are they important for my business?

By 09/07/2017September 28th, 2023Employee Management, Performance Management

Appraisals and the need for them are currently a hot topic in and around the business world.  Business leaders are questioning the importance of them. HR Managers are validating the need for them. But are appraisals a thing of the past or a necessary business process?

Whether you are of the thinking appraisals are a process driven, a form-filling activity that takes away creativity and adds more administrative pressure to managers and HR managers, or you think a standardised appraisal system is key to company performance – the importance to get it right, whatever approach you take is fundamental to success.

Even if you are a small, micro business getting the building blocks right to a successful, motivated and objective orientated workforce is key from the moment you hire someone.

You might have a brilliant employer branding strategy, excellent onboarding processes and a strong organisational culture, but does every employee understand their role, their objectives and how they align with the overall strategy and what they need to do to support it?

So what are appraisals?

Performance Appraisals or Performance Reviews as sometimes they are known are an individual plan for each employee. They don’t necessarily need to be resource heavy, paperwork-heavy and an unfavourable process, but they are key.

An appraisal should reflect the employee’s job, their key responsibilities, their wider participation within the team and their overall contribution (or expected contribution) to company-wide business objectives.

Appraisals should focus on performance and personal development with specific areas for employees and employers to concentrate their efforts on above and beyond the day-to-day environment.

Our 7 stage appraisal process breaks it down;

1) What should an appraisal look like?

Appraisals can look like a number of things, an Excel spreadsheet, a word document, or even a hand written piece of paper. More often than not, appraisals now ‘live’ online in the cloud as part of an organisation’s HR system freeing up storage space and keeping information secure (and handy!)

Whatever format you choose, keep it consistent across the business and stick with it!

But what does an appraisal actually look like? What messages? What themes? What headlines?

This is company-specific and again usually designed by the HR department to formalise the process and keep it consistent across the organisation. Even if appraisals are online, messages and key themes need to be organisation-wide but make sure they are specific to your organisation and not a standardised template (all good HR systems with performance management modules should be able to do this!)

For example, an appraisal could have SMART objectives; Specific, Measurable, Assignable, Realistic and Time-Based or it could be less measurable with top line ideas and expectations to be achieved.

Whatever headline messages you choose, whatever KPI’s you want to track, consider the purpose of an appraisal; to manage performance across the business and highlight opportunities for professional, personal development to achieve success.

2) Who should develop an appraisal?

Another healthy debate within the HR world, with HR professionals pushing people managers to be more self-serving, while managers often believe this is the responsibility of the HR department.

As HR departments become more active in business planning, keeping abreast of individual plans isn’t the best use of an HR professional’s time.

It is much better for the employee’s line manager to develop an appraisal with both the HR department, who can give a high level, company-wide objectives and then the employee who will be able to advise on their capability to deliver.

An appraisal, shouldn’t be a rigid document and process with a one type fits all approach (which is it why can’t be something HR are fully responsible for).  An appraisal needs to consider the individual, the manager and the department.  After all you can’t apply the same appraisal document to the receptionist in a hospital to a junior doctor; their key strengths and responsibilities couldn’t be further apart.

3) Who is responsible for an appraisal?

Line managers are ultimately responsible for the appraisal process within their employee management responsibilities.  However, for appraisals to be effective and not a document that sits on a shelf (or in the cloud) for the next 12 months, the appraisal process needs to be collectively owned by the manager, the employee and the HR department.

  • The HR department is responsible for standardising the appraisal method, format, tools, information collection and storage across the business.
  • The line manager is responsible for understanding the objectives and goals of the department they manage, the individual team members within it, their contribution, their skills and what they individually need to achieve to deliver the objectives of the department.
  • The employee, without the employee’s significant input the appraisal process will fall at the first hurdle. The employee needs to feel engaged with the process and understand their personal development is important to the business which feeds through to their performance and the overall performance of the business.

Click here If you want to find out more about how Natural HR’s online HR software can support your business with performance management from HR to self-service

4) When do appraisals take place?

This is a hot topic in HR and business in general with answers ranging from informal day-to-day appraisal reviews to monthly to quarterly to half-yearly to once a year reviews to tick the HR box (or none at all!)

What works for one business, might not work for another and the same applies to your people after all everyone is individual.

One thing we suggest is doing them, and don’t do it once a year to tick the box.  Your people are important assets in your business, ensure they are engaged with your business, ensure they feel empowered to be part of a bigger picture, appraisals provide an opportunity to listen to your employee and listen to their requirements to be able to perform better.

5) Where do appraisals take place?

This is again down to the company, company values and company culture.  Appraisals are ultimately a conversation. Conversations can either be formal and set within a formal environment, or they could be in the local coffee shop.  Wherever you choose, choose somewhere away from the day-to-day environment, away from the wider team and somewhere you can converse clearly and openly.

Another suggestion for appraisals even in the digital world is to do them face-to-face wherever possible.  If you manage remote staff, then face-to-face reviews might not be something you can often do, but wherever you can, appraisals are best approached in person.

6) How long do appraisals have to take and how do you do them?

Again, this depends on the frequency you do them.  If you leave them in the filing cabinet all year, you will have a longer discussion.  The more regular you do appraisals, the easier and quicker they become. If they form part of regular one-to-ones, then there’s no need to diarise monthly appraisal meetings – they could be an additional 15 minutes as part of the regular work in progress catch up. If your organisation has a more formal performance management process, dedicated appraisal times might be required. Whatever frequency you choose, make sure you discuss progress and any barriers to progression. Review the objectives and the KPIs and check whether the objectives set are still valid, especially if appraisals are infrequent.

7) How do you actually deliver appraisals?

‘Doing appraisals’ doesn’t need to be scary. The less you think of appraisals as a ‘doing’ activity, the more they become part of your management style, the easier they become.

In most organisations, especially those with 50 employees or more, HR departments will (or should) deliver an overview of the appraisal process, and offer support to managers to deliver appraisals.

However, there can be tricky appraisals. Not all employees deliver time and time again to the expectations set by the organisation, and delivering negative feedback can be difficult.

Why are appraisals important to my business and why is it important to get right?

To summarise, appraisals are important conversations to align employee’s outputs, performance and personal development with the business strategy.

Appraisals whether formal or informal provide a framework for both employer and employee. A systematic approach to monitoring performance and employee engagement. Whatever process you choose, use good tools around it to support the overall requirements.

Take a look at Natural HR’s performance appraisal module to find out how we could support your appraisal process.