Employee appraisals

A well designed, well executed appraisal scheme can benefit both employers and employees by providing a regular opportunity for:

• reviewing, managing and improving performance;
• recognising achievement;
• increasing motivation;
• assessing strengths and weaknesses;
• identifying training needs;
• obtaining feedback and ideas;
• clarifying and setting objectives;
• career counselling and
• identifying future potential.

The detailed design of an appraisal scheme will depend on which of the above objectives it aims to achieve.

Most schemes focus on reviewing past performance, setting new objectives and identifying training needs.

Some appraisal schemes are linked to pay reviews.

Where pay is related to individual performance (as opposed to seniority or length of service), linking the appraisal to a pay review may be a logical and necessary process.

It can, however, make it difficult to achieve some of the other appraisal objectives at the same time.

For example, an employee who knows that a pay increase depends on a favourable assessment is unlikely to draw attention to any weaknesses in performance.

It will therefore be difficult for an employer to use the same appraisal review to identify the employee’s training needs.

In these circumstances it is better to make the “reward” review a separate process from the wider ranging appraisal review.

The frequency of appraisals is a matter for individual choice.

Some employers operate annual schemes.

Others prefer more frequent quarterly reviews.

Where new employees are required to complete a probationary period, an initial appraisal is sometimes conducted to formalise the transition to permanent employment or to justify dismissal.

Whatever the circumstances, it is important that managers are committed to the appraisal scheme and do not see it as an administrative chore.

The appraisal form should be viewed as a working document to monitor progress against objectives and plan training and development activities – not to be filed away and forgotten until next time.

Designing and implementing an appraisal scheme

A common reason for the failure of appraisal schemes is that they are too complex and require too much paperwork.

What matters in appraisal is that the discussion between appraiser and appraisee takes place and is acted upon.

The paperwork is an important record of what was agreed but it is more important that there is an ongoing review of the commitments made by both parties during the appraisal meeting.

Often objectives which have been set during appraisal and training plans which have been agreed are overtaken by events or other priorities.

Managers should be focused on the ongoing process of performance management – supporting, monitoring and adjusting objectives – not form filling.

When designing an appraisal scheme, make sure that your appraisal form reflects your objectives.

Keep your objectives realistic.

Do not try to cover too much ground.

It is better to carry out a limited but thorough review than to overstretch your managers’ patience and resources.

Your appraisal form should be simple to complete, and your procedure as streamlined as possible.

Most schemes require the employee’s immediate manager to carry out the appraisal.

The completed appraisal form is then forwarded to a more senior manager for his/her comments.

This procedure ensures that senior managers are kept in touch with the progress of individual employees and that the scheme itself is monitored and that standards are consistent.
For an appraisal scheme to succeed, it needs the commitment of all those who will be required to participate.

This includes managers, employees and trade unions, where appropriate.

The details of the proposed scheme, including its objectives, criteria and procedure, should therefore be discussed with all parties and their views taken on board before the design is finalised.

All participants will need to understand the objectives and importance of the scheme as well as the methodology.

Training is therefore vital for appraisers and appraisees.

Most managers will fall into both categories and will therefore need training from both perspectives.

Often appraisal schemes fail because the appraisal reviews are seen as a distraction from “real work” and not given sufficient time and thought.

Appraisal training is the opportunity to “sell” the benefits of the scheme to those who may be sceptical and reluctant participants.

If senior managers are involved or can be persuaded to lead the training, their commitment will be seen, and it will be easier to persuade others to follow their example.

A small pilot scheme, with limited participation, may help to identify any problems with the scheme before wider scale implementation.

Appraisees are often painfully honest in their appraisals and may even be a harsher judge of their own performance than the appraiser.

Most appraisals result in a consensus view of the employee’s strengths and weaknesses, but disputes can arise when an appraisee feels that he/she has been unfairly judged.

It is therefore important that the appraisal system includes a procedure for employees to appeal against their appraiser’s assessment to a more senior member of the management team.

This may be done as a formal step in the appraisal procedure or through the company’s formal grievance procedure.

In any event, the employee should be allowed to be accompanied by a work colleague or a trade union representative at the appeal/grievance hearing.

Over time, as a business develops and evolves, its organisation structure, skill set, and culture will also change.

If an appraisal scheme is to remain relevant, it needs to be reviewed and updated on a regular basis to ensure that it reflects these changes.

A scheme which fails to keep up with organisational change will quickly become ineffective and burdensome.

To avoid this, request regular feedback from appraisers and appraisees – both groups will have a valuable perspective on the relevance and effectiveness of the scheme.

The appraisal form

Most appraisal schemes require the appraiser to complete an appraisal form.

This constitutes the written record of the appraiser’s assessment of the appraisee’s performance.

It is easy when designing an appraisal form to get carried away and try to cover too much ground.

Keep the form simple and limit the questions to those areas which are key to your scheme’s objectives.

Concentrate attention on job performance and the achievement or non-achievement of objectives, not the personal characteristics of the appraisee.

Appraisal forms may be used to support unfair dismissal and discrimination claims which are brought before the Workplace Relations Commission (WRC).

It is therefore important that the criteria used to assess performance do not discriminate on any of the grounds covered by employment legislation – gender, marital status, family status, sexual orientation, race, disability, age, religion or being a member of the traveller community.

There are a number of different ways of assessing an employee’s level of performance on the appraisal form:

1. Rating

This is simple and easy to understand.

This is where a number of employee characteristics are rated on a scale which may range from 1 (= excellent) to 5 (= unacceptable).

On the downside this method can be subjective and there is the tendency for managers to choose the “middle of the road” option (e.g. 3 in a scale of 1 to 5).

2. Comparing the employee’s achievements with his/her objectives

This is less subjective but employers using this method must ensure that objectives are realistic and that in their assessment they take account of changing circumstances, beyond the employee’s control, which may have affected their performance.

3. Recording critical incidents of positive and negative behaviour

This enables performance to be judged on actual incidents rather than subjective assessments.

This method encourages continuous supervision and recording and allows managers to draw on criteria over a long period, not just the incidents which are fresh in the mind at the time of the appraisal review.

It can, however, be time consuming and may make the employee feel “over supervised”.

4. A simple narrative report

This is a report written by the appraiser (prompted by heading on the appraisal form).

This is a flexible approach, but its effectiveness depends on the appraiser’s writing skills.

The individual nature of such narratives limits their use for comparing one employee with another.

Most appraisal forms use a mixture of methods to achieve a balanced, objective assessment of performance.

Include sections in the form for setting new objectives and agreeing any training or development which is required to support future activities.

Self-assessment

The best way for an employee to prepare for an appraisal review is to complete a copy of the appraisal form in advance of the appraisal meeting.

In doing this, the employee has the opportunity of thinking through the appraisal criteria and noting any events or issues he/she would like the appraiser to take into account.

The employee’s copy of the appraisal form acts as an aide memoire for the meeting.

In most organisations the employee’s copy of the appraisal form is kept by the employee and does not have to be disclosed to the appraiser.

The appraisal meeting

Thorough preparation is the key to a successful appraisal meeting.

Take time to review the employee’s previous appraisal form.

Consider his/her performance since the last appraisal and whether or not the objectives which were previously set have been achieved.

Look at the whole period of time since the last appraisal, not just the events which are freshest in your mind.

Start putting together your assessments but do not reach too many firm conclusions.

An appraisal is a two-way process and your appraisee’s input might change your views.

A good idea is to complete the appraisal form initially in pencil, not ink.

Try to avoid subjective judgements. Instead, be ready with statistics, measurable results and actual examples to illustrate your points and back up your assessments.

This evidence-based approach will help you to avoid some of the common pitfalls of appraisal, including:

• the tendency to let one of the appraisee’s characteristics (good or bad) influence your rating of all of the other aspects of his/her performance;
• the tendency to be overgenerous or overcritical “across the board”, so that it is difficult to compare your appraisees with others;
• the tendency to allow recent events (good or bad) to distort your view of long term performance and achievement and
• the tendency to “stay on the fence” and rate appraisees in the middle of a scale (a rating scale with an even number of points may help to avoid this by forcing the appraiser to opt for a rating above or below the middle point).

The structure of the appraisal meeting will be largely determined by the format of the appraisal form.

Most appraisal meetings begin with a discussion of past/current performance and an assessment of how far objectives have been met.

The discussion will then move on to the setting of new objectives and the identification of training and development needs.

Each objective set should be “SMART” – specific, measurable, agreed, realistic and time-limited.

It is also important to obtain the employee’s agreement and commitment to any objectives which are set.

If they are imposed or seen as unattainable, they will be resented and/or ignored.

For a step-by-step guide to conducting an appraisal meeting and setting objectives, please see our step by step guide to conducting an appraisal meeting (coming soon).

Employees should be given a copy of the completed appraisal form and asked to comment on it for the record.

Appraisal forms contain confidential information and should be held securely in the employee’s personal file.

An employee who is dissatisfied with his/her appraisal should be given the opportunity to appeal to a more senior manager.

This can be done as a further step in the appraisal procedure or as a formal complaint under the company’s grievance procedure.

In either case, the employee should be allowed to be accompanied by a work colleague or a trade union representative at any subsequent appeal hearing.

Responsibility for the appraisal does not end when the meeting is over.

If the scheme is to be effective and credible, all of the points arising from the meeting must be followed up and any agreed actions, such as providing training or additional support, carried out.

The employee’s progress towards the objectives which have been set must be monitored as part of an ongoing process of performance management.

Poor performance

Problems of poor performance should be tackled as and when they arise and not left for the annual or quarterly appraisal.

The appraisal form is not the place to record verbal or written warnings about an employee’s poor performance.

It is important to investigate and identify the reasons for poor performance so that the correct procedure can be followed.

If necessary, formal warnings should then be issued separately as part of the company’s published discipline or capability procedure.

Poor performance during an employee’s probationary period may result in an initial appraisal which recommends dismissal.

In such cases, employers are advised to follow the Code of Practice for Grievance and Disciplinary issues under the Industrial Relations Act.

if you don’t currently have a grievance or disciplinary procedure in place we’ve got you covered with our templates

Disciplinary policy

Grievance policy

Failure by the employer to follow either their own established procedure or that provided by the Code of Practice could make a dismissal on the grounds of performance unfair, provided the employee has at least 1 years’ service.

An employee who is in his/her probationary period may not have been employed for a year, although this might be the case if the probationary period has been extended for any reason.

There is, however, no service qualification for bringing a claim of discrimination.

If a dismissed employee is successful in a discrimination claim and the employer has failed to follow the procedures, any compensation awarded by the WRC may be increased.

Before dismissing a probationary employee, employers should also check the employee’s contract of employment.

If the employee has a contractual entitlement to be dealt with under the company’s formal discipline procedure, it may be a breach of contract if the employer fails to do so.

For guidance on dismissal following an unsatisfactory probationary period, check out our guide on probationary periods.

Although problems of poor performance should be dealt with formally under the appropriate procedure, they must not be ignored or glossed over in the appraisal meeting.

Employees who are dismissed for poor performance and subsequently bring a claim for unfair dismissal to the WRC often cite appraisal forms in evidence.

If the appraisal form contains little or no indication of the alleged poor performance or contradicts formal warnings which have been issued under a formal procedure, the employer’s case is seriously undermined.

Where an employee is underperforming, it is essential to address the issues at the appraisal meeting and record the unsatisfactory performance and the action to be taken to deal with it on the appraisal form.