An effective performance management process and appraisals can have a significant impact on a company’s productivity and profitability, as well as its culture, values, and morale – all of which enhance your brand and support the retention of talent within your business.

However, a recent survey from the Society for Human Resource Management found that 72% of businesses conduct appraisals only once a year, and only 2% of employees gave their employers an A grade for their performance management!

These figures suggest that your employees want to be valued and that you as employers recognise their good work. An appraisal is an opportunity to give your employees honest and open feedback, and it is the best time to praise and recognise their hard work. Your best talent want to know how happy you are with their achievements, so this will spur them on to continue to work smarter and with even better results. They also value your input on what key areas they should be strengthening, and any training and development they may need to become even more productive.

Strengthening business and employer branding

Companies with great workplace cultures are those where employees feel a real sense of belonging. They know your brand and understand what the business is trying to achieve; they are inspired by your values and mission. The discussions that take place during an appraisal meeting will help your employees to understand how individual objectives set for them will play a part in the wider business plan.

Setting goals

The most productive employees are those that are driven to achieve goals. Setting SMART targets (specific, measurable, attainable, relevant, time based) helps to motivate employees. Use this time to talk to your employee about their goals and targets, and agree on them with your employee, so that they feel empowered and motivated to deliver.

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Building rapport

It is important for overall productivity, as well as the culture of the organisation, that managers have good relationships with their team. An appraisal, using two way dialogue with employees, helps to facilitate good relationships between manager and employee. One of the key enablers for achieving great employee engagement is to ensure that your employees have a voice; an appraisal can help provide a platform for discussions and empower employees to share their opinions.

Training and development

An appraisal is the ideal setting to discuss any training or development needs with your employees. You can identify any gaps in knowledge and explore positive solutions. Additional training and support could be provided to enable your employees to achieve results which they can feel proud of. High performing employees can be supported with further training to help them to progress to the next level.

Stepping back to look at the wider picture

As a busy manager you can sometimes adopt a helicopter view of on-going projects. Appraisals are a good opportunity to step away from the busy everyday hustle and bustle of work and reflect on the direction you want your team to be heading in.

Quickly resolving concerns

Issues, grievances and complaints can usually be nipped in the bud before they escalate if they can be raised in appraisals. It would be better still for regular 1-2-1s to be held with employees as part of an overall performance management programme, enabling such issues to be picked up and dealt with at the time, rather than being stored up for the annual appraisal. Nevertheless, in the absence of such regular meetings, appraisals may be used as a platform to voice such concerns. If this is the case, taking the time to listen to your employees and address any concerns helps to create a happier working environment and will continue to fuel a culture of openness and trust.

What you need to conduct an effective appraisal

For any performance management to be effective and productive, employers and managers need to feel effectively equipped to provide regular feedback and ongoing performance management. This is a skill in itself and doesn’t always come naturally to all managers, therefore training and development in this area to build the capability of the management team will help to create the trust and respect needed to build open and transparent relationships and developing skills such as active listening, performance assessment and goal setting will help you to ensure your business can benefit from a well delivered and maintained appraisal system and performance management programme.

If you need help with performance management, appraisals or building the capability of your management team to deliver effective processes, then please do call a member of the MAD-HR team, who will be only too happy to help.