In the business world, success is directly related to employee performance. Whether you love or loathe appraisals, most employers use them to review staff performance and set objectives. You may have noticed that performance reviews are often referred to as appraisals across the industry and are a widely used management tool. 

However, although appraisals may sound purely beneficial, there have been studies hinting that performance reviews are failing employees and organisations and causing minimal impact on overall business performance. This blog will help you start to create a better appraisal system that will ultimately benefit the performance of your business.

It’s all about balance

Most businesses usually aspire to use performance appraisals as part of their business strategy, as well as to monitor individual performance. By doing this, companies are assuming that appraisals can translate into strategic goals and operational practice. However, most performance reviews are usually rushed conversations where a performance rating is handed out and any urgent performance issues are brought to attention.

It has also been noted that some businesses are finding performance reviews a burden in their management processes, rather than a useful tool. Line managers are expected to identify staff training needs and provide career counselling on top of their usually busy roles. With so much going on in businesses nowadays, it’s not surprising that many appraisal schemes fail to deliver outstanding results.

A makeover for reviews

Most performance review systems are usually formed when a business is hierarchical and despite any changes, still work to support pay raises and promotions. You may think that this has questionable relevance in today’s organisations, especially where career progression is limited but rewards are more flexible.

Instead, systems should now work to deliver the context of the business, which the common appraisal model may not fit. This adapted appraisal system should then remain adaptable to any changes that may happen in the business’s strategy or structure. Ultimately, transforming the usually inconvenient performance review starts with business strategy and then clarity about roles, skills, and behaviours that are needed to achieve this. 

Below are some top tips are creating the perfect appraisal system:

  • Create clear aims and measurable success criteria
  • Involve all employees in designing the system and how you might implement this
  • Keep everything simple to understand and use
  • Ensure that its use is one of the managers’ core performance ideals
  • Be sure to show employees how their performance links with the goals of the business
  • Always back up this process with clear training and development

If you’re looking for some assistance in creating a better appraisal system for your team, speak to ActionCOACH today!