The Importance of Employee Appraisals

An effective appraisal and performance management process can have a significant impact on an organization’s culture, staff morale, and employee engagement levels – all of which enhance employer brand and support the retention of key talent within a business.

There is debate as to whether traditional appraisal systems are still effective for the needs of an evolving workforce. Organizations such as Deloitte have announced that they are moving towards more ongoing discussions and feedback with employees. Whether it’s traditional six-month reviews and appraisals, or ongoing one-to-ones and performance catch-ups, the important element is that there is a clear and consistent approach to performance management and reviews.

A commitment to having appraisal conversations with employees can help to improve the bottom line by aligning individual performance with business objectives. It also supports the creation of a more people-focused culture and an environment in which employees will want to stay, progress, and thrive.

Employee recognition and rewards

Appraisals provide the opportunity to recognize and reward employees and to ensure they feel valued for the work that they do. By monitoring performance and progress against objectives employers can assess whether to reward staff with salary increases, promotions, or bonuses. It’s also a chance to say thank you and to provide verbal feedback and praise. Rewarding any successes highlighted doesn’t have to be financial. Although money still holds considerable importance, and salaries should be regularly reviewed to ensure they remain competitive and in line with performance, simple and sincere acknowledgments still go a long way towards maintaining employee engagement.

New challenges and clear objectives

Organizations with great workplace cultures are ones where employees feel a real sense of belonging. They understand what the organization is trying to achieve, are inspired by its mission and values, and recognize how their role plays a part in achieving overall success. The discussions which take place during appraisal meetings will help employees to understand how the individual objectives set for them will play a part in the wider business plan. This helps to give employees a sense of ownership within the collective vision and to empower them to achieve the results needed. It’s also a great opportunity to regularly review objectives and to provide ongoing challenges to ensure employees remain motivated by new goals and experiences.

Continued progression and development

Organizations that provide clear progression opportunities are attractive to new recruits and are more likely to be able to retain talented employees by mapping out a career path for them. Regularly looking at performance will help to identify when employees are ready to take on more responsibility. Setting aside the time to discuss an employee’s individual ambitions will also help organizations to spot and develop potential talent and build a strong succession pipeline.

Culture of trust and openness

In today’s fast-paced business world, it’s more important than ever to maintain a meaningful, two-way dialogue with employees to help keep talented people within your organization. One of the key enablers for achieving employee engagement is to ensure that employees have a voice and appraisal and performance review meetings can help to fuel discussion and empower staff to share their opinions. They will feel encouraged to influence innovation by feeding ideas upwards and the relationship which develops from open communication within appraisal systems will help employees to feel more able to approach and discuss any ideas or issues outside of these meetings as well.

Support and training

Open discussions on performance can help to identify any problems early and provides the opportunity to explore positive solutions. Managers can look at what additional training and support could be provided to enable the employee to achieve results which they would feel proud of. High performing employees can be supported with further training to help them to progress to the next level in their careers.

Prevention of long-term dissatisfaction

Issues can usually be nipped in the bud before they escalate to the point of someone leaving if they can be raised through appraisal meetings. It is a great opportunity for an employee to raise any worries or concerns, or to discuss any barriers which they feel are holding them back. Taking the time to listen to employees and address any concerns helps to create a happier workforce and will continue to fuel a culture of openness and trust.

Supporting staff to deliver an effective appraisal system

For appraisals and performance communications to work to best effect, managers need to feel effectively equipped to provide regular feedback and ongoing performance management. Investing in training for managers to able to deliver effective performance appraisals with an authentic approach is a worthwhile investment. Maintaining a natural management style will help them to foster the trust and respect needed to build open and transparent relationships and developing skills such as active listening and performance assessment will help to ensure a constructive appraisal system is in place.

By Gill Buchanan

Gill is a founding Director of Pure Resourcing Solutions has worked in the recruitment field since 1988. Gill’s experience is broad based and includes eight years of specialist recruitment experience within an international specialist recruitment company including five years working within financial services recruitment in Sydney, Australia.