How to Accurately Appraise Employee Performance in Your Business


Are you preparing to carry out an employee performance appraisal? Ensuring that all of your company’s employees are performing effectively is one of the most vital aspects of managing a business.

It’s also something that many businesses – particularly small companies without a dedicated HR team – can struggle with. How can you accurately, consistently and fairly appraise and track the performance of your team?

Below, we’ve listed four tips and techniques that you can use to carry out accurate, useful performance appraisals of your business’s employees to ensure your office remains productive, focused and dedicated towards achieving your goals.

Create a standard performance appraisal criteria. 

Many small businesses make the mistake of assessing employees using unique and different criteria. The end result is a performance appraisal that doesn’t provide an actionable, constructive form of advice for employees or managers.

Does your business have a standard performance appraisal criteria? Performance appraisals need to be standardized for all employees, meaning that all people are assessed and appraised using the same criteria.

Standardization prevents employees from feeling that they haven’t been treated fairly in their appraisal. It also makes it easier for your HR team to track employee performance over the long term and view improvement as it occurs.

Understand the goals of a performance appraisal. 

What is the goal of your performance appraisal? Performance appraisals need to do two things: they need to provide a record of performance for managers, and also to provide actionable, helpful information to employees.

Can an employee receive their appraisal and understand which areas they excel in, which require improvement and which key skills make them an important part of the business?

If your performance appraisal system is used to support promotions and salaries, for example, does it accurately assess the criteria required to work out what each employee deserves and is entitled to?

Focus on useful feedback, not surprises.

Many employees fear performance appraisals, with worries of surprising problems and complaints that they may not be aware of. Good performance appraisals should be free of surprises, with employees largely aware of issues before being appraised.

In the most effective workplaces, managers make employees aware of performance issues as soon as possible. This creates immediate change, rather than delaying any progress until the point at which performance appraisals are carried out.

Do your team members understand their performance issues and areas in which an improvement may be required? It’s important to address performance issues if and when they occur and not to leave any long-term issues until appraisal time.

Carry out appraisals frequently and consistently. 

The key to gradual improvement is great tracking. By keeping detailed, consistent records of each of your employees’ performance, you can track improvement over the long term and watch as your business becomes more effective.

Create consistency by carrying out performance appraisals on a regular basis. It’s best to assess performance every six months, although some businesses might be best suited to annual performance reviews and appraisals.

The more consistent your business can be in tracking and appraising its employee performance, the easier you’ll find it to measure long-term performance trends and stay aware of progress.