A Small Business Guide to Performance Appraisals

A vital tool to keep employees motivated and focused, regular performance appraisals are essential in any business

A Small Business Guide to Performance Appraisals

How should I handle the performance appraisal meeting?

Appraisal meetings should be used as a constructive tool, allowing both employee and manager to express unfettered views and feedback.

Follow the steps below to conduct an efficient appraisal meeting:

  • Explain the purpose of the meeting. Especially if it’s their first time being appraised, your employee can understandably feel nervous. Explain to them that the meeting is there to help talk through and improve any problems they have, rather than punish them for any mistakes.
  • Set out your agenda for the meeting. If you can, put the member of staff at ease by praising their work in general.
  • Talk through the self-assessment. Using open questions, ask the employee to expand on what they put in the form, focusing on the key points you should have already identified. By doing this, the onus is on the employee to explain their areas of weakness, turning your role into a more positive, solutions-oriented one.
  • Add your own views. Be specific, especially when it comes to dishing out criticism. Use the evidence you have gathered to support any assertions you make. Narrow down the areas of performance that you think need improvement.
  • Discuss the problems you have identified, and try to arrive at solutions. Start, again, by asking the employee to express their own view – in particular, as to why the problem has occurred, and their own views on how to solve it. Don’t take their answer as gospel, however; sometimes deep-seated issues are at work, such as lack of confidence.
  • Review the employee’s career plans. Make sure you’re well aware of any changes to this; you need to know if an employee is planning to leave so you can take steps to address this.
  • Consider development and training needs. Look at NVQs as a way of assessing and improving performance.
  • Set objectives for the next period. You should also agree on a date for the next meeting.
  • Discuss the effectiveness of the appraisal process itself. Ask the employee whether they feel the process was fair, or if there is anything you can do to make it more effective.
  • End on a positive note. Summarise the session and what has been agreed and express hope for improvement in the future.


What do I do after the performance appraisal meeting?

Straight after an appraisal meeting, when matters are still fresh in your mind, you should write a performance appraisal report. This should cover objectives you have set for the next period, and any commitments you have made (such as a commitment to a pay rise if extra training is completed).

When you have written this down, give copies to the employee – and check with them that what is written represents an accurate record of what was agreed. You should also give a copy to a third party, such as a line manager, to review, to check for consistency (this is particularly important in larger organisations).

You should also have an appeals process in place for people who feel the appraisal was conducted unfairly in some way. This helps you nip problems in the bud before they develop into a grievance.

Setting objectives

Performance appraisal is centred on setting and striving to achieve goals for improvement. Whilst we cannot be prescriptive in this article, remember that the objectives you set should be ‘SMART’ – specific, measurable, agreed, realistic and time-limited.

Additionally, think about whether particular areas of performance are already covered – or should be – by everyday workplace policies. (such as responding to support emails within 24 hours).

Finally, remember to always seek an employee’s input when setting objectives with them; otherwise the danger is the goals will be unrealistic, too easy, or overly burdensome.

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