Performance Management Appraisals: Managers Guide

Introduction

Appraisal is a two-headed process of looking backwards to analyse past job performance and looking forward into the future with a view to improving future performance.

The overall objective of an effective appraisal scheme should be to help each employee to maximise his or her job performance for the joint benefit of the employee and the organisation.

This line manager briefing aims to help line managers to understand the processes involved in conducting effective appraisals.

The purpose of appraisal

The main purpose of an appraisal scheme should be to assist employees to improve their performance. This will be of benefit to both the employees and the organisation.

An appraisal scheme may be designed to include some or all of the following elements:

• a review of the employee’s past performance.
• discussion of the employee’s strengths and weaknesses.
• discussion of any problems and constraints, with a view to identifying solutions.
• a review of the extent to which the employee has achieved set targets.
• discussion of appropriate targets for the forthcoming year.
• identification of training and development needs in relation to the employee’s current job.
• identification of training and development needs in relation to a job that the employee may do in the future.
• a review of the employee’s long-term potential.
• a discussion about the employer’s future plans; and
• a discussion about the employee’s future ambitions and plans

The benefits of appraisal

If carried out effectively, a staff appraisal scheme will provide benefits for the individual, the line manager and the organisation.

Benefits of appraisal to the individual employee

The employee receives valuable feedback on his or her performance.

The employee learns precisely what is expected of him or her.

The employee gains recognition of his or her efforts.

Any problems restricting the employee’s progress can be recognised and addressed.

The employee has the opportunity to contribute to discussions about his or her training and development needs.

Benefits of appraisal to the line manager

The line manager’s relationship with the employee can be strengthened.

Information from the employee may contribute to improvements in job design.

Focus on each member of staff as an individual, and agreed actions to develop each individual’s performance, can contribute to better overall performance in the line manager’s area of responsibility.

Benefits of appraisal to the organisation

Problem areas can be highlighted and possible solutions discussed.

The line manager has the opportunity to review how each employee’s strengths can best be utilised within the organisation.

The line manager has the opportunity to make succession plans in the event that the employee indicates an intention to retire in the near future.

Discussion of employees’ ideas and expectations enhances communication in general.

The line manager is provided with a forum to communicate the aims and future direction of the organisation.

The suitability of individual employees for promotion – perhaps into management positions – can be determined.

The company’s training needs can be analysed.

 Problem areas

• While appraisal schemes have many potential benefits, it is useful for line managers to appreciate the negative issues that they may sometimes raise.
• If appraisal is linked to the organisation’s pay review process, discussions may become focused on pay instead of performance. Pay reviews are therefore best kept separate from performance appraisal.
• The line manager may be tempted to use the appraisal interview to raise disciplinary matters. If there is a problem with an employee’s conduct or performance, the matter should be raised with the employee at the time the problem arises and not stored up for the annual appraisal interview.
• Managers may be reluctant to deliver criticism on a face-to-face basis, perhaps because of a fear that the employee might react badly, become defensive or even respond negatively to the whole process of appraisal.
• Line managers may not collaborate closely with their staff and may not therefore have the necessary insight into their performance or strengths and weaknesses. If this is the case, it will be vital for the line manager to talk to the employee’s immediate supervisor to gain the necessary feedback.
• Personal likes and dislikes can affect the outcome of appraisal interviews, unless the line manager has a sound awareness of these, and is able to put them to one side and view the employee’s abilities objectively.
• An employee may believe that the line manager holds prejudices against him or her, perhaps as a result of a personality clash or because of disagreements over the year.
• Some employees are intrinsically suspicious of appraisal.

Preparing for an appraisal interview

If appraisals are to be successful in motivating employees and enhancing job performance, it will be essential for the line manager to plan and conduct effective appraisal interviews.

Preparation for an appraisal interview is one of the most important stages of the appraisal process.

Keeping the necessary records

Line managers must have the necessary facts about the employee’s performance before them at the time of the appraisal interview.

Since appraisal is often conducted only once a year, and no line manager has a perfect memory, it is advisable for line managers to make records throughout the year of instances when the employee has performed well, adequately, or badly.

Doing so will provide specific, factual examples of job performance for the manager to discuss with the employee during the appraisal interview. Without such evidence, the appraisal interview may turn into a haphazard chat based on generalisations. This will be neither meaningful nor constructive.

Having specific examples will be particularly important if the manager needs to discuss aspects of an employee’s performance that are not wholly satisfactory. This will function as a starting point for discussion on why performance was not satisfactory in the particular area and what can be done to achieve an improvement in the future. Without concrete examples, the employee may not accept the manager’s claim that his or her performance was unsatisfactory and may become defensive.

Checklist for appraisal interview preparation

If a line manager fails to prepare properly for an appraisal interview, the employee being interviewed will quickly sense and resent this.

Dos and don’ts

1. Do review the job description and the previous year’s appraisal report to check the job duties and responsibilities, and what was said at the previous year’s appraisal.
2. Do talk to other line managers or supervisors – and peers where appropriate – with whom the employee has been working during the year to obtain factual feedback on performance.
3. Do think through what aspects of the employee’s performance are to be discussed and identify specific examples of both good and not-so-good performance.
4. Do be prepared to back up any criticism with facts and examples.
5. Do consider what points the employee may wish to raise and think through how any delicate areas can best be handled.
6. Do agree the date; time and place for the interview at least two weeks in advance, taking into account the employee’s preferences. Part-time employees should be appraised at times that fall within their normal working hours.
7. Don’t underestimate the time necessary for the interview. There is no ideal length of time for an appraisal interview, but it is advisable to schedule more time than you think you will need to avoid having to cut a discussion short.
8. Don’t forget to brief each employee well in advance about the purpose and scope of the appraisal interview.
9. Don’t be tempted to complete the appraisal form until after the interview, although you should review the appraisal form and make some provisional notes.
10. Don’t allow interruptions during the interview, and make sure that there are no distractions from mobile phones and other electronic devices.
11. Don’t overlook the importance of taking into account the personality and temperament of each employee. Any likely reactions should be identified beforehand, and an appropriate response planned. Different styles of interview may be needed to cater for individual needs. A relatively insecure employee may, for example, need a lot of reassurance.

 Advance briefing

Employees should be properly briefed before their appraisal interview on what the interview is for, how it will be conducted and what they should expect to gain from it.

These briefings may be done on a group basis. However, it is also important for the line manager to ensure that each individual has the opportunity to raise questions about the purpose and process of appraisal, and have any doubts or concerns dealt with.

The briefings can be conducted at the same time as the self-appraisal forms are issued.

Self-appraisal

Many organisations structure their appraisal review schemes to include a self-appraisal form. This is issued to each employee prior to the appraisal interview. It can be issued at the advance briefing. The self-appraisal form is a tool to help employees prepare for their appraisal interview.

Once the employee has completed the self-appraisal form, he or she should give a copy to the line manager.

This process also benefits the manager. It provides advance notification of the employee’s views and opinions about his or her performance and future development, and any contentious issues that the employee wishes to raise.

The self-appraisal form should be issued to the employee at least two weeks before the interview, and the employee should be asked to complete it and return a copy to the manager no later than one week before the interview.

Examples of self-appraisal form questions

In which areas of your job do you consider that you have performed successfully?

What do you think the main reasons for your successes are?

In which areas of your job do you feel that you have been less successful than you might have been, and what do you think the main reasons for this are?

What do you believe your main strengths, skills and talents are?

To what extent do you think your abilities are being fully utilised in your current job?

What do you consider your weaknesses or shortcomings in relation to your current job are, and how do you think these could be overcome?

What problems or constraints, if any, may have prevented you from doing your job to the best of your ability during the past 12 months?

What ideas do you have for solving any problems identified?

What goals and objectives do you think would be appropriate for you for the coming 12 months?

What training, coaching or other development do you feel would enhance your job performance or benefit you in your employment with the organisation?

What action would you like your line manager to take to help you perform your job more effectively in the future?

What action do you think you could take to do your job more effectively in the future?

What are your plans and ambitions for the short, medium, and long term?

Appraisal interview structure

Any system of appraisal will centre round the appraisal interview. The line manager should conduct the review objectively, focusing on the job being performed and not on the employee’s personality.

The employee should gain a clear understanding of how well he or she has carried out the job over the past year, a full awareness of where he or she stands at present, and an insight into what training, development and career opportunities might be available or planned for the coming year.

Preliminaries

Take time at the start of the interview to relax the employee and establish rapport.

Explain the purpose and scope of the interview and what the intended outcomes are.

Remind the employee of the overall objective of appraisal, i.e. that it is intended to assist the employee to maximise his or her job performance, both for the employee’s benefit and for that of the organisation as a whole.

Clarify the main duties of the employee’s job and his or her areas of responsibility.

Recap on the objectives and targets that were set for the year.

Performance review

Before providing feedback, encourage the employee to put forward his or her views about performance.

Discuss aspects of good performance first.

Give sincere praise for good performance. Use examples, and place particular emphasis on any tasks that required special effort.

Discuss how far agreed targets have been met.

Discuss any instances of poor or below-average performance, and the likely causes. Use specific examples and ensure that the discussion is frank and considers the problem areas in detail.

Explore any constraints that may have prevented performance to maximum capacity, and their causes.

Discussion of the future

Discuss and agree any training and development that would benefit the employee in the coming year.

Discuss and agree any action that the employee needs to take to improve performance.

Discuss and agree objectives and targets for the future, and how these will be assessed.

Give the employee the opportunity to discuss his or her career aspirations and aims by asking the employee where he or she would like to see him- or herself in the short, medium, and long term. Take care not to raise false hopes or make promises that perhaps cannot be kept.

Share with the employee any plans that the employer has which may affect the employee’s work and his or her aims.

Refrain from making an assumption that an older employee may retire in the near future.

Close of interview

Summarise what has been discussed.

Summarise the action points that have been agreed.

End the interview on a positive note.

 Performance assessment

The factors that are chosen for the purpose of assessing employees:

Performance should be properly defined and capable of objective – and, where possible, quantifiable – evaluation

Possible factors on which performance may be assessed

Job knowledge – including the employee’s understanding of the job, its responsibilities and the procedures associated with it.

Quantity of work output – including, for example, promptness in completing tasks that are allocated and reliability in meeting deadlines.

Quality of work – including, for example, accuracy, the degree of supervision required and the extent to which objectives have been effectively met

Planning and organisational skills – the employee’s ability to plan and prioritise his or her work effectively, coordinate different elements of the work and, where appropriate, delegate.

Ability to learn and develop – the speed with which new duties and/or skills are mastered and the employee’s perceived willingness to learn new things

Paperwork – accuracy and timely completion of reports and other relevant paperwork.

Communication skills – the employee’s effectiveness in written (including e-mail) and verbal communication with colleagues, superiors, subordinates, and/or customers

Working relationships – perceived effectiveness in working as a member of a team and the quality of relationships with colleagues and/or customers

Motivation – the employee’s level of enthusiasm for his or her work and willingness to take different tasks on board and/or make extra effort, when asked.

Initiative – ability and willingness to come up with constructive ideas, offer suggestions and take responsibility.

Supervisory ability (where relevant) – ability to manage, motivate and lead staff effectively.

Due to a change in the law introduced on 6 April 2011, employers can no longer compel employees to retire at any specified age, unless the requirement to retire is justified objectively. However, employees may retire, i.e. give up work, at a time of their own choosing.

This means that managers cannot use retirement as an excuse to dismiss employees who might be experiencing difficulties with their work (for whatever reason). Instead, they should treat employees of all ages fairly and equally when appraising past performance and providing training and development opportunities. This will help to prevent capability issues from arising.

Treating older employees differently from younger employees in appraisal could amount to age discrimination, which could, unless justified, be unlawful. For example, if a line manager disregards inadequate performance on the part of a 65-year-old employee on the assumption that he or she will be retiring soon, but delivers heavy criticism to a 25-year-old employee whose performance is similarly inadequate, the difference in treatment would amount to age discrimination.

Performance ratings

It is common for appraisal schemes to contain a system of performance ratings, i.e. a scale on which each employee is graded on the basis of the sorts of factors listed above. A typical grading scheme might run from 1 to 5, with 5 representing outstanding performance, 3 representing competent performance and 2 representing performance below the required standard.

Where such a system is in place, line managers may find themselves challenged by employees who believe that their ratings should be higher than those deemed appropriate by the manager. Where there is a difference of opinion, the manager should discuss with the employee:

• why he or she has provisionally graded the employee at the specified rating, backed up by evidence of how the rating has been arrived at; and
• why the employee believes that he or she should be more highly graded

The manager should ask the employee to give specific reasons to justify his or her belief.

The manager should be prepared to listen to the employee’s point of view and should remain open minded about the ratings until the interview has been concluded.

Setting objectives

If an employee is to be able to perform to the best of his or her ability, the manager should ensure that clear and specific objectives are identified and agreed. There are three over-lapping areas for objectives:

• Job objectives: Targets defining specific tasks to be completed or projects that the employee agrees to achieve. Job objectives would be relevant no matter who was performing the job in question.
• Career objectives: The setting of projects that will assist the employee’s future career development.
• Skills-related objectives: Areas in which the employee agrees to take specific action to develop his or her skills, for example the goal of becoming proficient to a defined standard in the operation of a new computer system. Such objectives will be specific to each individual.

Having clearly defined objectives will give the employee a sense of direction and be likely to create commitment and enhance motivation.

Objectives should:

• clearly define what is to be done.
• clearly define the end result that is expected.
• be expressed in precise terms.
• where possible, be measurable.
• be agreed with the employee.
• be set at a level that the employee believes to be realistic and achievable.
• challenge the employee; and
• have a realistic time deadline placed on them

If the employee indicates during an appraisal interview that he or she is considering retiring in the near future, the line manager should take care not to discriminate against him or her but could begin to make plans for the future if the employee does decide to retire.

Dos and don’ts

• Do continue to treat the employee in the same way as you would treat other employees, for example in the provision of training opportunities.
• Do adjust the employee’s performance expectations proportionately if he or she indicates that he or she would like to work reduced hours in the run-up to retirement, and if the employer can accommodate this.
• Do discuss with the employee how he or she could pass on his or her knowledge and skills to other staff in the run-up to retirement.
• Do discuss succession issues with the employee, for example how the employee might be involved in training a replacement for the job.
• Do reassure the employee that he or she can change his or her mind about retirement if he or she wishes.
• Don’t say or do anything that might amount to age discrimination against the employee.
• Don’t assume that, if the employee indicates that he or she plans to retire at a particular time, he or she will do so. Until the employee actually hands in his or her notice, communication of an intention to retire is not binding on the employee. The line manager could remind the employee of the requirement to give notice under the employment contract and the length of the notice period.

 Giving criticism effectively

Good feedback, including the giving of constructive criticism, is essential to an employee’s development and is a fundamental element of effective appraisal interviews. Line managers should ensure that they provide their employees with regular feedback throughout the year, not just at the time of the appraisal interview.

The key rules for making criticism constructive are to concentrate on the person’s actions or behaviour, not his or her personality, and to concentrate on the future and not the past. The aim should be to correct, not to punish.

In giving criticism, the line manager should:

• give criticism promptly after the event to which it relates.
• ensure that the criticism is clear and specific.
• avoid generalisations.
• use specific examples.
• remember to ask for the employee’s input and be prepared to listen without prejudging.
• deliver criticism objectively and unemotionally, ensuring that no annoyance or disapproval is implied.
• make sure that the employee understands what he or she has done wrong, why it is wrong, and how he or she should do it next time.
• explain the effects of the employee’s actions or behaviour on colleagues, the department, and/or the organisation as a whole.
• encourage the employee to take full responsibility for his or her actions.
• make it clear that he or she wants to collaborate with the employee to seek solutions to any problem areas.
• let the employee know if, in the manager’s opinion, the employee is capable of improvement.
• since receiving criticism is difficult for most people, and there is a high chance that misunderstandings may arise, check after giving criticism that it has been fully understood.
• end the conversation with a positive statement, for example one about the manager’s confidence in the employee’s overall competence to perform the job; and
• where possible, use praise to cushion criticism

What to say and what not to say
Don’t say	Do say
You are very careless.	There are regular mistakes in your work that we need to discuss. Here are some examples.
You’re lazy and your work is always submitted late.	You have missed the agreed deadline on the last three occasions. We need to talk about how to prevent this happening in future.
You do a good job.	Your paperwork is always 100% accurate and on time.
You make too many mistakes.	I want to discuss what we can do to reduce the level of mistakes.
Your supervisory skills are not up to scratch.	What are your views on your ability to supervise your staff effectively?
I was really annoyed when that happened.	When that happened, the outcome was, as you know, that we lost the contract.
You should have taken more responsibility for that.	Do you agree that you were the person responsible for that?
You need to sort this problem out.	I want to discuss how I can support you in sorting this problem out.
You’re simply not up to the job.	I believe that you are capable of improvement and would like to discuss what further training might be helpful.

 Completion of appraisal forms

Appraisal report forms should always be completed after the appraisal interview. If the form is completed before the interview, the employee may well wonder what the point of holding the interview was.

The purpose of the form will be to record the results of the appraisal interview. This will encompass the joint views of the line manager and the employee about the employee’s performance, training needs and future career development. Action points that were agreed at the interview should be clearly recorded. The form should not contain comments about matters that were not discussed at the interview.

The employee should be asked to sign the form after completion, to confirm that it is an accurate record of what was discussed. The line manager’s manager should then review the forms, as an overview and consistency check.

Paul Middlemast, MA, Chartered Human Resources Practitioner, is the founder and Senior Partner of https://ospreyhrc.com.of HR Consultants that work with an extensive network of human resources, management and legal and development specialists. For many years, Osprey hrc has provided practical and professional support to help organisations achieve the best possible results.

If you want to find out more about how HR outsourcing can benefit your organisation, please get in touch with Paul Middlemast, Senior Partner by email:  or give us a call on 07831 427234.

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