Performance appraisal

Employee appraisal, what is it?

Employee appraisal is the process for collecting information from and about staff of your business for decision making purposes. Your objective should be to improve performance and as a result staff appraisal is defined as the process whereby current performance in a job is observed and discussed for the purpose of adding to that level of performance.

Objective of performance appraisals

  • To review career performance and provide feedback by manager and appraisee

  • To review strenghts and weaknesses and identify areas of improvement

  • To review career potential and discuss development plans

  • To review training needs

  • To determine reward

  • To obtain employee's feedback about your business

  • To improve communications generally

  • To imporve motivation and engagement

Types of appraisal

Performance reviews: they analyse your team member's past successes and failures with a view to improve future performance

Potential reviews: they assess suitability for promotion and/or further training

Reward reviews: they determine pay rises. Salary assessments should not be discussed as part of your performance review as they may dominate your conversation.

Linking pay to performance, is it a good idea?



As an incentive; if the appraisee feels pay can be influenced by performance they should be motivated by this. Those who perform well will become de-motivated if they believe that those who do not perform will receive the same financial reward

The appraisee will feel very inhibited in the appraisal meeting if they feel that their pay will be influenced by what is said. They are unlikely to feel able to talk openly about their weaknesses.

Who appraises?

Immediate managers are most likely to appraise their staff. Sometimes, it can proved to be slightly more complicated. In the case of project driven organisations where the appraisee may have been working under a project manager possibly on site and the line manager has therefore had little opportunity to perceive performance. This issue can be resolved if either the PM carries out the review or if the line manager prepares the review by gathering information from all parties concerning the appraisee's work.

Types of Appraisal Scheme

Rating Schemes

Comparison with objectives

Narrative report

This method lists a number of factors to be assessed such as quality and output of work, which are then rated on a numerical scale according to the performance level. The rating scales is easy to use and understand. It is however highly subjective.

Under this scheme, the employee and his or her manager agree objectives at the beginning of the review period. The subsequent review is based on how far these objectives have been met. This method is more objective than rating scales because the emphasis is more on work achievement. It can be more participative because it gives employees the chance to carry out a form of self-appraisal. However, some employees may not welcome the element of self-direction because they would rather be told what to do.

This technique requires the reviewer to describe the individual's work performance and behaviour in his/her own words. The narrative report may take the form of a written report. Narrative report is flexible. However, its effectiveness depends largely on the literacy ability of the reviewer.

The performance appraisal interview

1. Give adequate notice

2. Make sure s/he has copies of relevant. Give out the performance review form and allow time to complete. Allow yourself time to contemplate the points raised by the appraisee and consider your own assessment of the appraisees performance.

3. Prepare yourself thoroughly. Take into account the whole review since the last review.

4. Prepare the environment.

Structure of the interview

Explain the purpose and scope of the interview and explain what the agenda will be.

Conducting the interview

Remember that if you praise the employee this will aid relaxation and motivation. Be prepared to take criticism - of yourself, your company and anything else raised. Treat the interview as an opportunity to gain feedback.

Training and development

Development is not only about choosing one of our training courses. It might also means a combination between coaching and training, a period of secondment to another department or even allowing your employee to progress on a new responsability or role. Be careful not to make false promises!

Agree actions

Agree any actions to be carried out as result of your review and record in the appraisal form. Failure to obtain agreement will result in the employee being unlikely to carry out the actions given on the completed form.

Follow-up actions

Ensure that any agreed actions are followed up. The credibility of your performance appraisal process depends on that. Remember that performance appraisal is a procedure that can both reward and discipline, a means by which employees can be coached and counselled, and a vehicle through which negotiated improvements to performance level can be agreed. It also often provides an opportunity for discussion about ways in wich the working environment can be improved so as to facilitate better performance on the part of individuals and groups of staff.


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