The importance of appraisals

Ally Maughan, founder of HR specialist People Puzzles, explains why you should make time to review staff performance and receive employee feedback.

Appraisal. The word alone can strike dread into the most hardy of hearts. They can seem like a chore, an inconvenience, a time when you have to listen to everyone else’s groans and gripes. Most businesses know they need appraisals and many regularly conduct them. But how many small business owners have an appraisal themselves?

Judging from the businesses I work with the answer is not a lot. And it’s easy to see why. With so many pressures on the average business owner, something has to slide. Taking time out for an appraisal might seem like the first thing that should and would drop off the schedule. But if you take away the word appraisal and focus on what an appraisal really is, it seems like a completely different story. It’s a chance to take stock. Make plans. Set goals. Challenge. Inspire. Review. If all of those things are going to be relevant to anyone, then surely it’s really the people with the most influence on the business.

It should really be one of the last things to drop off a schedule. Running a business can be a lot like a relationship. At the start you talk a lot about where things are going and what you both want out of it. But after a while you settle and then stop talking. You can quite happily coast along for years. But you might be missing out on it being even better. If only you’d talked about it.

Take the time for yearly reviews; for everyone. They should review and critique the past year and help to shape the next one. Asking other people for feedback is of key importance but giving and receiving feedback is an art form. We’ve seen things like 360 reviews work really well but also seen them tear people apart and take away their confidence. So you need to find what will work best for your business.

A way that feedback can be delivered in such a way that it develops others and brings a positive new energy. If you don’t think it’s something you can do yourselves then consider getting someone external in to help you with the process. One of my clients hadn’t done any appraisals for a couple of years and the team of four directors hadn’t had any constructive feedback in that time. Their employees had a lot of grumbles about how things were going but there was no forum for them to listen, be challenged and change. They also hadn’t listened to each other. They really didn’t know what each other was doing and everyone was frustrated.

We spent some time with them reviewing what they were spending time on and I also asked the people who worked with them to give honest feedback. We got together as a group to review all this and commit to plans for the next year. All those frustrations were out in the open and they could make positive plans to move on and strengthen as a business.

That might not be the right way for all businesses but engaging with each other and with feedback is really important. It can be hard to take feedback sometimes but, if there’s something that your staff or clients aren’t happy with, it’s better to know about it and work on it.

Without taking time to plan and making steps to improve there will be a time when improvement stops. Small businesses are not normally limited by the market; they are limited by what they can spend time doing and by the ambition of those at the top. By taking the time to think about what you want and making some changes you can break away from those constraints.

See also: What is the best method of performance appraisal?

Staff appraisals are important for SMEs

Industry experts have said staff appraisals are an integral part of employer-employee relations, despite the findings of a recent report casting aspersions on their use.

The Chartered Management Institute (CMI) says the ‘importance of sharing information cannot be overstated’ and appraisals should motivate employees towards improving their performance.

Mike Petrook, a spokesperson for the CMI, says: ‘What should happen to make them work well is a clear link to be made between the organisation’s strategic goals and the individual’s own objectives.’

He states that although there should be a formal appraisal once a year, informal talks in the form of one-to-ones should take place once a month.

Despite the comments, a recent report by Investors in People found that many respondents were unhappy with their appraisals.

The research found that 44 per cent of the 2,900 people surveyed believed their appraiser had been dishonest, while 29 per cent of people felt their appraisal was a waste of time.

Only 41 per cent of those questioned believed it was useful.

See also: Staff Appraisal Template Examples – Lists of online resources offering free example staff performance review documents for download.

Alan Dobie

Alan Dobie

Alan was assistant editor at Vitesse Media Plc (previous owner of before moving on to a content producer role at Reed Business Information. He has over 17 years of experience in the...

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