How to conduct a performance appraisal

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Performance appraisals are an integral part of performance management, as they allow each employee to receive feedback – be it praise for outstanding contributions, suggestions for areas for improvement, or to plan for career growth by setting performance and development objectives for the year ahead.

On this page, find out how you can prepare for, and conduct a performance appraisal, with tips on how you can improve the performance appraisal process over time.

When to hold performance appraisals

The time of year you select to conduct performance appraisals is important. Peak periods should be avoided as you need to be able to give each employee the attention they deserve. It is worth noting that the process of reviewing employee performance should be ongoing.

Aim to discuss each employee’s development with them as and when issues arise, rather than putting it off until a formal review. This keeps the lines of communication open, as it helps to ensure that nothing in a formal performance appraisal will come as a complete surprise.

Making regular notes throughout the year of each employee’s performance will allow you to accumulate information that can be discussed during the reviews.

Details of any new qualifications gained by an employee, participation in seminars, industry conferences or courses, or involvement in special projects should all be recorded on file. This will allow for more in-depth discussions and give you a more rounded picture of the employee’s contribution and professional growth since their last review.

Related: Hong Kong performance appraisal samples

Preparing for performance appraisals

Prior to each meeting, draft an agenda to follow. Key points to be covered should include:

  • Each employee’s goals or KPIs and how well they have met these
  • Areas where they have excelled
  • Areas where improvement is needed

Remind your employees to assess their own performance too. Self-analysis can be as simple as considering the goals each employee achieved – or missed. Or consider asking staff to complete a more formal “SWOT” analysis by addressing:

  • Their strengths and weaknesses
  • Opportunities they have taken advantage of to enhance their performance
  • Any threats that have impacted or may impact their performance

This can also be a good way to identify issues in your workplace that you may be unaware of, or highlight the need for staff training in particular areas.

During the performance appraisal, typical points to address can include:

  • The employee’s quality of work and ability to meet particular metrics
  • Dependability and punctuality
  • Leadership, communication and team skills
  • Progress made towards personal career goals
  • Innovation and problem-solving skills

Importantly, establish a follow-up strategy for each staff member. Conclude the appraisal with a discussion about the employee’s goals and career aspirations, and develop a plan to achieve these. This lets your employees know that your company is invested in their personal career growth.

Related: A guide to promoting employees

Example of a written performance appraisal

Performance appraisals should be completed with a written record of the employee’s performance.

A performance appraisal example is noted below:

Anna is working beyond expectations in her role as junior accountant. She brings a positive attitude to her role, copes well with pressure and has a consistent eye for detail.

Anna is able to work well within a team and demonstrates leadership to her junior colleagues. She has volunteered to be involved in a number of special projects, and she has developed outstanding relationships with a wide range of clients.

Anna has strong communication skills and is eager to progress her career, however she would benefit from additional development and training to further her knowledge of legislative and tax requirements.

Tips for performance appraisals

There are additional ways to make your performance appraisal process more effective. Some ideas you may want to consider are listed below.

Be aware of the setting

Not surprisingly, employees can find performance appraisals intimidating. After all, their work is under scrutiny. That’s why these meetings should ideally involve a conversation in a relaxed environment, to help settle nerves.

Simple gestures such as conducting a staff appraisal in a more casual setting such as a local café can go a long way to making the performance appraisal less intimidating, especially for employees who aren’t usually comfortable with giving feedback.

Maintain a balanced discussion

When you’re speaking with employees, make a point of providing positive feedback as this can help to maintain motivation as well as letting staff know what they’re doing well.

However, aim to balance the conversation with constructive criticism that lets each staff member know where their performance could be improved.

Where weakness is identified, highlight options for further training and professional development or discuss opportunities to be mentored. This allows each staff member to know you are offering solutions to encourage professional growth.

Handled professionally and thoughtfully, a performance appraisal can be a win-win for everyone, leaving staff re-energised and clear about their career progression within your company. It also gives you the reassurance of knowing you have addressed areas of improvement while inspiring staff to deliver their best effort for the year ahead.

Related: How to handle a pay rise request