Performance Appraisals That Actually Work

Are you concerned that appraisals have turned into an onerous box-ticking task in your organisation? Is there an inconsistent approach across teams? Is there a lack of buy-in to the process from employees and managers? If so, maybe it is time to review your performance management processes.

Designing an effective performance appraisal framework

Creating a high-performing organisation involves more than a once-yearly conversation around performance. Having regular performance conversations which involve goal setting and providing constructive feedback are widely recognised as key factors in driving high performance. Creating a performance framework that guides employees and managers through these conversations will enable them to get the most out of them.

A good performance framework contains a balance of objective review of performance (are they achieving their goals), development (to help upskilling, retention, and engagement), and wellbeing (ensuring employees are supported).

In a climate where pay rises cannot meet expectations a well-designed performance framework can also provide a great opportunity for employee recognition. Performance management processes need to benefit both the organisation and the employee.

How to improve your annual appraisal framework

Start by listening

Listen to the views of staff, people managers, and leadership teams on what works and what doesn’t work with existing processes. Ask:

• Is there too much paperwork or are there problems with the design?

• Is there too little or too much guidance?

• How consistently is your existing process actually being used? Are performance conversations actually happening? Is the ‘day job’ being prioritised over people management?

• Have managers received training on how to use the existing process?

• Do managers know how to set objectives?

• Do managers not like giving feedback or do they simply not know how to?

• Do managers have enough time to prepare and give feedback?

• Do employees know how to fully engage in the process?

• Is it a cultural issue across the organisation that performance management it is not seen as a priority?

• Do managers understand the importance of having a framework for driving performance, engaging staff, and supporting development?

It may be that you do not need a completely new framework, you may identify that you just need to provide coaching and training to managers on how to set objectives and provide feedback. Maybe employees just need to gain a greater understanding of how to engage in the process, you may just need to give them more ownership of the process.

Performance appraisal framework checklist

Clear Objectives

Performance management should not be about backward reflection on performance. The start of any performance framework should be the objective-setting process that should take place at the start of the performance year. SMART objectives that can be clearly linked to team plans, organisational strategy, and values will help set clear, purposeful goals for the year ahead and will provide a basis on which to measure performance. Objective setting should only be done when the strategic objectives are available to drive a focus on strategic alignment.

Feedback from line management and self-reflection needs to be built in to develop a sense of progress. Objectives may need updating throughout the year, therefore you should regularly review if objectives are still relevant and achievable.

Personal Development

The start of the performance year is also a good opportunity to discuss development and career aspirations so the employee has an idea of what they can do to develop over the next year, what training/ coaching/ mentoring they can access and it will help to gain their buy-in to the performance framework.

Regular, timely feedback

It is important in order for it to have the desired impact. 1-2-1 provide a vital space for the manager to engage with the individual and make them feel part of the organisation, like they are contributing to a wider purpose and goals. Poor retention, low engagement, plodding, and quiet quitting are all risks if people are not fed back to regularly, especially in a hybrid or homeworking environment where relationships with their team may not be as strong.

Employee Ownership

Ensure there are sections for employee feedback, ask employees to prepare for meetings by reflecting on what has gone well, what has not gone so well, and what have they learned. You should give employees the opportunity to feedback on the support they are receiving from their managers.

Wellbeing

Ensure time is given to each one to one to discuss wellbeing, this is especially important if you are aware of any additional needs, making sure there are no barriers in place preventing the employee from performing at their best.

Mid-Year Reviews

It is always helpful to build in longer reviews part way through the year, this enables managers and employees to discuss performance and against objectives more in-depth and is a good time to adjust objectives if they have changed. It is also a good time to refocus on development if that has been de-prioritised. Motivating conversations at this stage will really help to get people back on track if needed.

End-of-Year Reviews

This should be a culmination of the regular one-to-ones held throughout the year, there should be no surprises at this meeting, and employees should have a good awareness of how they are performing. It should provide an opportunity to reflect on how they have developed over the year. If your organisation wishes to rate staff for reward or development purposes this will usually be at this point, any ratings should be easily justifiable due to the effort that has been put in to reviewing performance throughout the year.

Flexibility within clear frameworks

Prividing guidance for the regularity of meetings and a framework for the conversations. This is necessary to ensure ensuring that meetings are consistently taking place across all teams and that the right things are covered in each meeting. However, there should always be some flexibility around what should be covered.

Making it stick

Manager capability and confidence

This is key to the effectiveness of a performance framework. If you have managers who don’t like being people managers, don’t see the value and link between engagement, or just don’t understand the importance of their role as a people manager, the ‘day job’ will be prioritised over people's development. You should ensure that managers understand that driving their team’s performance and supporting their development is central to their role as people managers, this could be done by adding it to their objectives.

Ensuring they are aware of the benefits of effective people management, that they receive coaching and training on what good objective setting and feedback look like and that they understand that people management is just as important to the organisation as the ‘day job’ will give managers the confidence to invest time in preparing and delivering work around performance frameworks.

Clear guidance

To ensure a consistent and transparent approach throughout the organisation. There should be guidance for the conversations (how to set objectives, how to have coaching conversations, what good feedback looks like and how to rate performance- if your organisation wishes to do this) and clear expectations around the frequency of meetings.

Getting buy-in

Have discussions with leadership, managers, and employees about the importance of performance frameworks and the possible consequences if there was no performance framework.

Clearly explain how the performance framework can help to tackle any people issues in the organisation. Explain how it links in with organisational strategy and values and how it will help to embed these across the organisation. Use evidence to show why it is an effective approach in other organisations. Explain why it is much easier for me to manage performance regularly rather than manage underperformance or deal with poor engagement and retention.

Another benefit to highlight is it provides a clear, consistent and transparent process for reward, recognition and development. If performance and development are clearly documented, then it is easier to demonstrate that pay increases and access to development opportunities have been allocated in a fair and equitable way.

Empower individuals

Ask them to contribute to their objective setting, get them to schedule in their one-to-ones, and make it so it isn’t a top-down hierarchical process. Encourage them to be self-reflective and to provide themselves and their manager with feedback on performance. Make sure they link engaging in the framework with accessing development opportunities.

Review it regularly

At the end of each performance year time should be taken to review if it is working for those using it and making improvements where necessary. Is it being used consistently throughout the organisation and if not is further training or support needed? Making significant changes each year is inadvisable as managers and staff may become disengaged if they have to keep getting used to new frameworks and processes each year.

Prioritise development

Offering development opportunities can be a big motivator to many employees, however, if nothing comes out of development discussions it can have the opposite effect. Making sure that those who make decisions about development opportunities have access to the information collected through performance conversations will help them identify training needs, development and undertake more effective succession planning.