Appraisals, when done well, provide the perfect opportunity to give feedback, motivate employees, identify skills gaps, set targets in line with the business’ objectives and find ways to improve employees’ performance. They also give line managers the opportunity to identify staff training needs, provide career counselling, spot high flyers of the future and manage poor performers.

In other words, appraisals give both managers and team members a rare opportunity to step out of their day-to-day working roles and take a look at what’s working and what isn’t.

However, the reality can be somewhat different. Sadly, all too often appraisals become a box-ticking exercise, or a rushed discussion where performance ratings are handed out or lapses in performance are exposed.

Not only is this a missed opportunity, poorly conducted appraisals can actually end up doing more harm than good. A report by Office Angels highlighted the importance of getting staff appraisals right: a quarter of employees start looking for a new job within two weeks of a ‘bad’ appraisal, and 40% begin a job search within a month.

Getting it right

The first step is to ask employees to prepare for the appraisal discussion – some companies get them to fill in forms to make this easier. But the ideal situation is to get people coming in prepared to talk about what’s worked and what hasn’t.

In practical terms, this means that the person doing the appraisal (it should be the immediate line manager) needs to have a good knowledge of the employee’s work over the past six to 12 months. You must be ready to talk about what has worked, what the problems have been, and identify training opportunities. It’s vital to put a set time aside and to ensure there are no interruptions. The person being appraised will feel that you value the time you spend with them.

When it comes to feedback you have to be very specific and really spell things out. This is even more important when you’re giving negative feedback. For instance, if you say, ‘I don’t think your strength is customer service’, you need to elaborate, for example with, ‘when you told the lady who wanted the full refund to “get stuffed”’.

Appraisals are also useful for you to get a feel from employees of how they think the business is working. In growing companies, people often feel a sense of personal attachment and responsibility for the business. Smart managers tap into that loyalty and use it and make people feel their ideas are appreciated and welcome.

Reminding people that they have a key role to play in the business’ success – or how their role fits in to the overall growth strategy, can also make them feel valued, trusted and motivated.