6 tips for conducting an effective performance appraisal

5 min read  |   23 October, 2023   By Aimée Brougham-Chandler

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Everyone knows what to expect in a traditional performance appraisal. 

But how can you make them as useful as possible for your team - and your business?

In this blog, we cover tips for small business owners & managers on ensuring your performance appraisals are as effective & valuable as possible. 


6 tips on how to conduct an effective performance appraisal:


1. Prepare

Preparation is key - both for the employee & the person running the appraisal.

It's a good idea to review previous notes around performance and to look at previously agreed objectives or goals. Have these been met? What have you observed throughout the process? Encourage the employee to make their own notes in preparation for the review as well. 


2. Create an agenda

Just like in any other meeting, an agenda will help to guide the direction of the discussion. Agendas can help you ensure you cover all you need to in an appraisal, including next steps. 

After you’ve created your agenda outline, you could send it to the employee and invite them to add any additional points they'd like to discuss. A performance review is not a one-way conversation, and it may well be that an employee will go into the appraisal with their own purpose (e.g. asking for a pay review), so it’s important to allow them to have the time to fulfil theirs.

Likewise, by each sharing your agendas, it allows you both to further prepare for the discussion. For instance, knowing that your employee wants to discuss their pay prior to the appraisal gives you the opportunity to look back at when they last received a pay review, rather than be blindsided by the question when it comes up.


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3. Discuss successes & challenges

Ask the employee for their thoughts on what they think went well during the review period, along with anything they struggled with. 

Its crucial to ensure that when discussing an employee's performance that you do so in relation to any objectives or targets that they were set. It's important to have established these goals well in advance, as it's not fair to assess performance against criteria employees are unaware of. 

It can be all too easy during a performance appraisal to focus on what improvements can be made. Remember to take some time to reflect on successes & celebrate them. Here are some ideas on what to say in an appraisal if you need some inspiration.


4. Discuss ideas for development

The majority of the performance appraisal should be focused on future development. Whilst it’s good to reflect on what has and hasn’t worked well, those elements are in the past and the appraisal should mostly focus on what the employee can do moving forward to achieve their objectives and contribute towards the company’s goals - that’s what motivates many people to work.

Discuss any career plans & development opportunities to help up-skill your employees (and help the business achieve its goals). 



5. Agree actions 

With the employee’s future development in mind, both the employee and the manager should come away from the performance review with an action plan. This needs to be an achievable plan with actions for each individual, including deadlines, to be able to facilitate the growth and development of the employee.


6. Summarise the meeting & provide further support

Conclude the appraisal by summarising what has been discussed and who is responsible for actions moving forward. It would also be a good idea to plan when you will meet again for the next performance appraisal. This gives the employee clarity and allows you to start to develop a regular feedback habit. You can take this opportunity to ask the employee to give you feedback.

When it comes to feedback and appraisals it’s important for small businesses to get the process right from the outset. Attracting and retaining talent has never been a more prevalent issue for businesses and a well-executed performance appraisal is the key to supporting & developing your team.

Find out how Breathe's performance management software can help centralise your teams' appraisal notes & development records. Why not take out a free 14-day trial today?


Author: Aimée Brougham-Chandler

An IDM-certified Digital Copywriter as of February 2023, Aimée is Breathe's Content Assistant. With a passion for guiding readers to solutions for their HR woes, she enjoys delving into & demystifying all things HR: From employee performance to health and wellbeing, leave to company culture & much more.

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