Our guide to conducting an effective employee performance appraisal

If done effectively, a performance appraisal can motivate employees and drive their performance at work. However, if done the wrong way, they can leave employees dissatisfied with their workplace.

Performance reviews benefit both employees and employers, as they give both the opportunity to reflect on what they enjoyed, what they learned, and what they struggled with, as well as set goals for the future.

What is a performance appraisal?

A performance appraisal, also known as a performance review or employment review, is an assessment of an employee’s performance over a given period of time. The performance review should identify the employee’s strengths and weaknesses, involve goal setting, and allow both the employer and employee to share any feedback they may have, good or bad. It’s up to each business how often they conduct to conduct a performance appraisal, but most choose to do it monthly, quarterly, or annually.

Here’s our guide to conducting an effective employee review.

Prepare well

Start preparing for the performance review by creating an agenda to share with your employee so that you both know what to expect. The agenda will guide the performance appraisal and sticking to it will ensure that you cover all items you need to. Ensure that you send the agenda to your employee well before the employment review so that they can add anything they wish to discuss to the agenda ahead of time.

Before the performance review, look over the employee’s most recent performance appraisals to identify any patterns or trends in their performance. This will also give you a refresher on what goals were set last time so that you can assess whether they have been achieved or not.

Start by asking for your employee’s input

Let the employee begin the performance appraisal so that they have the chance to discuss any challenges or successes they have had first. It’s possible that if there are some areas where the employee’s performance needs improving, they are already aware of this or need you to change something in order for them to improve.

At Fuse, we give our employees the chance to discuss what they love, loathe, long for, and learned in the review period. This is a great starting point for each employment review as it allows them to talk about what they excelled in and what they found challenging. Giving employees the explicit opportunity to discuss what they struggled with means that it is less daunting for them to bring it up, and that everything that needs to be addressed is being discussed in the performance appraisal.

Take time to reflect on their successes

Sometimes employers can get stuck talking about areas for improvement in a performance appraisal. Whilst it’s important that these are addressed, make sure that you set aside enough time to praise the employee for everything they have done well in the review period.

Ask the employee what strategies they used to excel in the work that they did well. You can then use these examples and ask them how they can mirror this across other aspects of their work that they may have found more challenging.

Also, be sure to recognise their hard work in a way that means something to the employee. This could be a promotion, pay rise, bonus, or another work benefit that shows the company’s appreciation for what they have done well.

Ask the employee for their feedback

Performance reviews are also an opportunity for employees to give the employer some feedback. Ask them to share this information, good or bad, so that they know it is a safe space to discuss any concerns they may have.

It’s important to take employees’ feedback on board to improve their workplace satisfaction, and in turn, improve your business’ employee retention. After all, if they have a concern, wouldn’t you rather they bring it up with you than resign unexpectedly? Performance appraisals are the time for them to do this.

If they have good feedback for you, make sure that you keep up the good work! However, if a concern is raised, make sure that you come up with a plan to address it. Sometimes it is something that can be explained or resolved instantly. For example, if your employee expresses dissatisfaction with their remuneration, you could either explain why a raise is not currently possible, or you may have had plans to offer them a raise later on in the employment review! However, not all problems can be resolved or explained instantly. If this is the case, provide your employee with a timeframe in which you will get back to them with a plan to change what they are concerned about.

Set clear objectives and targets

A performance review should always end by setting clear goals and measurable targets. At this part of the performance appraisal, ask the employee what their career goals are and if there is anything that they feel is missing from their current role. Based on their answers, work together to create some measurable goals that will match both their personal career goals and the business’ needs.

Plan when you will revisit these goals to ensure that they are being achieved and that if more help is needed to achieve them you can promptly assist.

If you’d like performance review advice from our specialist recruiters, fill out the form on this page and we’ll be in touch.