It doesn’t need me to point out that such a state of affairs is a long way from ideal. Appraisals should actually be positive events, helpful for those sitting on either side of the desk. But enough companies have botched appraisals for many employees to feel the same kind of trepidation suffered by those with a drill phobia as they sit anxiously in the dentist’s waiting room. And sometimes the managers conducting the appraisals don’t feel much better about it all either.
“One challenge is that if you have a yearly appraisal, it becomes such a big event,” says ProCo managing director Jon Bailey. “Both parties can end up using it as a meeting to vent all of the negative things that have been gathered over such a long period. It gets built up to such an event that the positive stuff can often be missed.
“For me, an appraisal needs to add value to both parties, otherwise it’s pointless. It’s a session where you can have a quality conversation about where you would like your member of staff to develop and where you can support them in their role, and their life. Likewise, it should be a forum where the employee feels comfortable in sharing concerns, ideas and dare I say it, their dreams and ambitions, even if you hear something that suggests they may not stay with you forever!”
Sadly, many companies have entirely the wrong idea when it comes to appraisals. Especially when setting up a new system. A common pitfall is to approach it the wrong way round, for example by undertaking an appraisal and then setting some objectives for the individual to be checked in a year.
A good appraisal system is all about the company’s goals and objectives. To set individual objectives without reference to the company’s goals is at best meaningless and possibly downright counterproductive.
More motiviation
By taking the company’s objectives as a starting point, it is then a natural progression to determine departmental objectives and from those an individual’s objectives. Of course, everyone should be contributing to and working towards the company objectives. The spin-off benefit of this is that from a motivation and self-worth perspective, it makes it clear to individuals where they fit in and how they are part of the whole. This breeds engagement and can increase motivation.
“Looking at setting objectives, it is obvious that they should be specific, measureable and challenging... but achievable,” says Mercury Search & Selection managing director Dani Novick. “The mistake which is commonly made is that objectives are set and people rewarded based on doing the job they are paid for. In my view doing your job means you get to stay. Objectives should be about stretching, improving and doing something beyond the status quo. Whilst I believe they should be achievable, they shouldn’t be easy.”
DST chief executive Jeremy Walters concurs that the goals agreed upon should not be too easy to achieve. In his view, the annual appraisal is just one component in a two-way engagement process, albeit the most formal part of an ongoing engagement throughout the year with an employee.
At DST, the appraisal process includes a set discussion with the line manager, where not only past performance is reviewed, but also aspirations discussed and future goals set. This meeting includes identifying training requirements to help employees grow their skill-sets and meet their goals.
All employees are set a number of key goals that are to be achieved by the end of the year. These targets are set by the employee and agreed by both parties, with a process of measurement put in place. Significantly, DST does not wait a full year to assess whether these goals have been achieved. It has introduced a half year ‘check-up’ to assess the individual’s performance against targets, recording how far they have progressed in percentage terms. This process identifies areas to be worked on and supported, to ensure that by the end of the year employees are provided with as great an opportunity as possible to achieve their goals.
“There is a fine balance in setting goals,” says Walters. “They should be achievable, yet at the same time both parties should feel they have ‘achieved’ by reaching them. Goals should benefit both the business and the individual. A half-term check-up will help the employee reach them more than a last-minute reminder at the year end. If not regularly reviewed, then an inefficient ‘feast and famine’ mentality can develop.”
Employee-led
It is important that the employee is as actively involved as possible in setting their goals. Generally speaking, people will be more committed and achieve more if they have set their own direction. They tend to me more committed and productive in doing things they enjoy; therefore, working with them to develop the direction they wish to head and give them all appropriate support will be more productive for all parties both emotionally and financially. It’s usually the case that a happy employee is a productive employee.
“The big thing to watch out for is not to use an appraisal as an opportunity to criticise,” says BPIF HR adviser North West Linda Harrison. “Or make it quasi-disciplinary. That is just a no-no. It will trash the credibility of the whole issue or topic. And it won’t build engaged relationships at all.”
Appraisals can also be highly useful in the context of succession planning. As Harrison points out, a good appraisal may winkle out skills and attributes that were previously unnoticed. It’s all too easy to label employees by the job they currently do. Yet if they succeed in bringing to light hitherto undiscovered qualities, appraisals can be an excellent talent spotting exercise.
However, appraisals can be undermined by a lack of preparation. “I think it is important to give the employee notice of an appraisal, allowing them time to prepare,” says George Thompson, joint managing director of Harrison Scott Associates. “Staff should be able to go into the meeting equipped with examples of their progress and achievements, be prepared with questions, concerns or otherwise that they would like to put forward. The employee should be made to feel comfortable enough to discuss their abilities, expectations and future ambitions.”
The appraiser should be equally prepared. It’s important to be able to articulate to an employee what value they add and the contribution their role makes to the business. That should hold true whatever the level – from cleaner up to senior director. The ideal scenario is when both parties come to an appraisal prepared, with a structured agenda.
“After the appraisal interview has taken place, follow up!” says BPIF’s Harrison. “It’s not just a tick in the box. It’s: we’ve made promises, we’ve made commitments, we are explaining why these things need to be done. The dialogue keeps that wheel moving. If there’s no follow-up, the individual says ‘well, what as the point of that?’”
It’s fair to say that the role appraisals can play in improving morale and productivity is increasingly appreciated within the print sector. At Remous Print, which has 22 people across three sites, director Alan Bunter says work has begun on formalising how the company communicates with its employees, with appraisals providing a key plank of the process. The aspiration is for staff to feel “100% involved” in how Remous operates its production system and quality control.
At Inc Direct, meanwhile, appraisals are called ‘personal development and visionary meetings’. The term ‘personal development’ is preferred over ‘professional development’ to underline the fact that the company cares about its employees as individuals and takes an interest in their wider aspirations.
Tied into this, the company has introduced online training platform Lynda.com and supports staff in acquiring new skills beyond their job specification.
“We feel it’s important that people are emotionally satisfied,” says Inc Direct HR manager Shanaz Syeda. “When an individual knows they work for a firm that cares about their personal needs, it matters a lot.”
One point on which opinion is divided is whether appraisals should be entirely separate from the salary review process. Given that appraisals do address performance it’s easy to see why many employers are tempted to make them a factor in deciding pay awards. Novick for one argues that it’s perfectly reasonable to link the appraisal to salary review and bonus payments.
But making too overt a link may have drawbacks. Syeda says Inc Direct does not connect salary review with its personal development and visionary meetings, while Harrison makes the point than managers conducting appraisals “don’t want to be pounced on” by employees requesting a pay rise. Not only can this make for an awkward conversation – particularly as the appraiser may not be authorised or in a position to grant a pay rise – but it can cloud the purpose of an appraisal.
It’s the mishandling of situations like this that make many people think appraisals are as painful as a visit to a sadistic dentist.
Getting the best out of appraisals
Setting the ground rules
Make sure employees receive plenty of notice of an appraisal and have sufficient time to prepare.
Managers conducting an appraisal must likewise be prepared. Appraisals carried out when one or both parties are unprepared will likely be a waste of time and could be damaging to morale.
Have a clear agenda/structure.
Aim to assess an individual’s performance objectively in the context of job role and in light of previously agreed objectives.
Create an environment in which individuals feel free to speak their minds.
Remember that past performance is only one aspect of an appraisal. Looking to the future should account for a major element of the review.
Appraisers must be able to set out clearly what value an individual’s role and performance adds to the business.
Managers should not use appraisals as an opportunity merely to criticise staff.
Don’t forget that people do have different ways of getting a good job done. The more diverse the workforce, the truer this point becomes.
A week or so before an appraisal it can be a good idea to ask an employee to provide you with a list of their accomplishments over the previous 12 months. This is helpful in two ways. First, it sets a positive tone for the meeting. Secondly, it is a handy reminder to busy managers, who may have forgotten or overlooked a significant achievement; lack of recognition for which might lead to a degree of resentment from the employee.
It is often helpful to provide a short form on which employees can write down their thoughts on how they have done. Acas suggests it might incorporate the following questions: What things do you think have gone well during the year? Do you have any views on how you might build on your achievements? Is there anything you are concerned about where you may need help? The form is a memory jogger for the individual not something to be given to the manager conducting the appraisal.
Setting objectives
Employees should feel a sense of ownership of the appraisals process. As far as possible, encourage them to set their own goals.
Objectives agreed for an individual should always be in line with the company’s goals. Think of it as a cascade – from company objectives, via departmental objectives to the individual. Glaring inconsistences should be avoided.
Set objectives that go beyond basic contracted duties.
Communicate how individual objectives contribute to company performance.
Make sure there are no obstacles that will prevent individuals from achieving their targets.
Targets should be demanding, but at the same time achievable.
Objectives should be agreed to cover essential outputs relating to the employee’s role but should also be flexible enough to cover any special projects that the individual may be required to carry out.
When framing objectives, try to adhere to the SMART acronym: specific, measurable, achievable, relevant and timebound.
Vague objectives are of little use in improving outputs and may also turn out to be an unpleasant and highly subjective bone of contention when an employee’s performance is reviewed.
Avoiding tick-box syndrome
A just for the sake of it, tick-box appraisal is disheartening and ineffective.
In some circumstances it may make sense to take a 360° feedback approach. With 360° performance appraisal, feedback on an individual is collected from a number of sources such as clients, colleagues and direct reports.
Don’t set objectives that have no real purpose or are no more than an employee’s basic duties.
If employees don’t feel supported or free to voice their true opinions and concerns, chances are they will offer at they think should be the right answer rather than speaking or completing a form truthfully.
Don’t delay dealing with significant performance shortcomings in the workplace because that member of staff is due an appraisal in three or six months’ time. Appraisals are not an excuse to ignore day-to-day management or staff development matters.
A high-quality appraisals/performance management system is a source of competitive advantage.
One of the biggest headaches can be distinguishing good performance from outstanding performance. Many managers have struggled to work out whether an employee is at the upper end of “fully meets expectations” or has gone above and beyond to the point of “exceeds expectations”. One potential way to make a judgment on such matters is to reflect on whether during the previous the year the employee has done anything deserving of an update to their CV.
Pay: The elephant in the room
As in so many other situations, the issue of pay is a tricky one. To avoid getting bogged down in a conversation about money, it should be made clear that a pay rise per se is not up for discussion in the appraisal meeting.
However, employees should be encouraged to put forward a compelling case outlining what they contribute to the company. This information should be captured carefully. After all, performance should have a bearing on future pay awards.
Following up
There is more to appraisals than performance management. A well-executed appraisals system can help with staff retention and succession planning.
Employees who shine during the appraisals process may be the future stars of your business.
Review performance against objectives frequently; at least quarterly if not monthly. While a formal appraisal meeting may only occur annually, it should not exist in splendid isolation. Performance management should be an ongoing process and managers must stay abreast of how employees are performing against their objectives throughout the year.
Ideally both employees and line managers should keep a record of achievements and development activities through the course of the year.
