What is a performance review or staff appraisal?

A performance review – sometimes known as a staff appraisal – is a valuable opportunity to review the performance of employees, identify areas where they can continue to develop, and help to motivate them.

There are numerous different ways to appraise employees, but most commonly they take the form of individual meetings between a line manager and their direct report.

At a minimum, performance reviews should take place annually, although quarterly reviews are also common across organisations.

What should be included in a performance review

An appraisal meeting should be used to:

• review aspects of the employee’s role and their performance against previously set objectives
• identify areas of weakness
• agree expectations and objectives for the following period
• establish any training and development needs.

Ahead of the meeting, written feedback should be sought from the employee about how they feel they’ve performed in specific areas. This feedback can then form the basis of the review.

A questionnaire – asking questions about employee’s main successes, what areas they’d like to improve on, how they would like to develop and even how they feel the company is working around them – is a good way to obtain this feedback.

Once you’ve discussed the employee’s feedback, the remainder of the appraisal should be used to agree on goals for the next year.

Are appraisals a legal requirement?

There’s no law to say you must appraise your staff, but it’s definitely recommended.

If you do hold appraisals, however, there are two areas of employment law that you need to be aware of. These are the Equality Act and Data Protection.

To comply with the Equality Act, you must ensure no staff are excluded from the appraisal process. This includes those who are on maternity leave, new starters, part-time employees and those who are absent. All appraisals must also be held in the same way, i.e. with the same form.

Under the Data Protection Act, which gives employees rights to access data held about them, you must make sure that all notes and paperwork relating to appraisals are able to be viewed by the employee. The information must also be securely stored. HR software can be really helpful here.

Why should I conduct a performance review?

We often find performance reviews are viewed negatively by employers as a time-consuming box-ticking exercise, impractical to carry out across all staff members in large organisations, and a real stretch to prioritise in smaller ones, but used astutely, they can bring huge benefits to any business.

1. It helps employees feel valued

When people feel valued and appreciated, they will work harder and be happier. A performance review provides the employee with an open environment in which to discuss their thoughts and opinions, and gives them an opportunity to tell you how they feel they are getting on.

This isn’t something you can achieve with an informal work chat in 10 mins over a cup of tea in the staff kitchen. A formal meeting gives the employee the chance to feel their voice is heard and gives you the chance to tell them they are appreciated. Something that is very easy to forget to do.

2. It gives you a structured, balanced plan for future performance

Other than just expecting your staff to perform ‘well’, performance reviews give you and your employee a chance to identify and agree upon objectives for the future.

As well as outlining the work standards you require in your business, it also provides structure for the employee – giving them something to aim for. An employee who buys into what they are doing, and has something to work towards is likely to be happy, engaged, and more productive!

Remember, objectives are overarching targets, not a list of daily tasks.

3. It helps to identify issues with performance

An employee may feel more comfortable discussing work issues in a structured two-way conversation that is carried out with every member of staff. That way they won’t feel singled out in any way.

You may like to discuss areas in which you feel they could improve and they could equally have identified areas that they feel less strong in. Such issues could be related to systems or processes, relationships with other team members or managers, or training and development requirements.

If they raise any serious concerns, for example, comments that suggest they are being bullied or harassed, then you would investigate those further outside of the performance review process.

4. It’s a set time for you to discuss performance

Rather than relying on ad-hoc conversations about performance, some employers mark out time in the calendar to ensure that they talk to staff.

We would recommend talking to your employees more than once a year, and perhaps setting up a formal meeting every quarter. These don’t all need to be formal appraisals, but they can be meetings to discuss how the employee is getting on with the objectives agreed at their annual appraisal.

Talking in depth about performance takes more time than you would think, but the benefit is that it can drastically reduce the daily burden you feel from employees not knowing what to do, or asking questions that you think should be obvious.

Often it’s a case of empowering your employee to think for themselves, showing that you trust them, and the positive results will follow.

5. It helps you apply the right training to the right staff

Offering the same training to all staff may end up being more of a drain on your time and your pocket than it needs to be. However, using performance reviews to identify who actually needs more training helps keep costs down and ensures you are investing in the right areas and people.

Remember, training doesn’t always need to involve expensive external courses. You can always consider cheaper options such as internal training, work shadowing, online training courses, free webinars and books.

No matter how large or small your business, our advice is to invest time and energy into performance reviews. Implemented effectively, they’ll pay dividends to your business in the long run.

The content of this blog is for general information only. Please don’t rely on it as legal or other professional advice as that is not what we intend. You can find more detail on this in our Terms of Website Use. If you require professional advice, please get in touch.