What is an annual appraisal?

Hi, today’s top tip is the four of clubs. It’s all about annual appraisals, and it comes from our 52 top tips for employers. 

Annual appraisals, an opportunity to step out of the rat race. An appraisal reviews the big picture. It’s not about the specifics, although those can be used as examples to illustrate a point. The annual appraisal is about performance against previously agreed, medium, and long term objectives. The employee is strongly encouraged to evaluate their own performance, and this has been discussed and documented between the employee and their line manager. Past performance is assessed and future targets are agreed. 

I love performance appraisals. 

The annual appraisal is a really powerful tool and more and more companies are being quite innovative in the way in which they’re using it. Some of our clients are doing 360-degree feedback where one employee is evaluated by their line manager, by their colleagues, and their subordinates. In one of our clients, they’re also asking customers to provide feedback on that employee. That works if you have a very strong one-to-one relationship with a client and an employee. 

The annual appraisals should be properly documented, and in some cases, they are used for setting pay reviews and for bonuses, but you need to be really careful about that link because it can be quite subjective and you take away some of the objectivity if somebody thinks that the way in which they review themselves is going to be linked to a pay review or to a bonus payment. You’re going to get a much more honest opinion if actually the performance appraisal looks back over the objectives that were set in the past, and then looks at the current year’s objectives for the business, and derives the individual’s objectives from that. 

There should be a really clear line of sight between what the employee is going to achieve in the coming 12 months and what the business goals and the business strategy is for the next 12 months. Employees need to understand the role that they play in achieving the overall company business success.