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Why Employers Should Conduct a Performance Appraisal

Updated: Jan 25, 2023

Written by Chartered FCIPD Breda Cullen of HR Team, the fastest growing HR consultancy service operating across Ireland, Northern Ireland and the UK.

What Is A Performance Appraisal?

A performance appraisal is an important element in the broader set of processes that make up performance management. Its purpose is to identify areas for growth and improvement, to inform suitable development plans, or to inform administrative decisions on contractual areas of employment – such as pay, bonuses, promotions, or redundancy.

HR Team Director, Martina McAuley, said: “Performance management is not just about dealing with poor performers. It is a process that begins with getting the right employees, setting the correct expectations, coaching employees to deliver efficient, high-quality work, and dealing with under-performance in a proportionate and appropriate manner.”

The Advantages Of A Performance Appraisal

Improve Communication The performance appraisal process can provide valuable insights about your employees. The key is to communicate openly with your staff members before, during, and after the review. Less than one-third of employees say they always know how they perform at work, and this process ensures they are clear on their performance levels.

Ensure to set clear expectations throughout the year and communicate them to your staff. An employee who assumes that everything is fine won’t have the chance to correct a problem. This kind of situation can lead to frustration, reduced productivity, poor morale, and potential resentment. Performance appraisals can help strengthen the bonds with your team. They not only reduce uncertainty but also allow you to set strategic goals for your staff and address behavioural issues in the early stages, but employees also have the chance to express their concerns and discuss their training and development needs. Staff can learn what is expected of them and how their performance is evaluated.

Reward Top Performers The purpose of performance appraisals is to identify employees’ strengths and weaknesses. Managers can use this information to determine who has contributed the most to the company’s growth and reward those who have made great efforts. Managers may show unconscious bias against employees based on non-performance-related factors. That’s why it’s important to gather data from multiple sources and set clear expectations for each role.

Supporting Development Appraisals can reveal opportunities for improvement and help managers identify the training needs of their staff, leading to a more productive organisation. They also allow you to spot potential talent – companies that invest in employee development find it easier to attract and retain talent.

Boost Employee Morale and Motivation While most employees do not look forward to appraisals, these evaluations can serve as a motivational tool. Bonuses, promotions, training programs, and other outcomes of performance reviews may improve team morale. Praising your team members for their accomplishments is just as important. Encourage your employees to try to better themselves and offer specific steps for improvement. Focus on the positive and show your team how to build on those strengths.

Ensure to provide constructive feedback, regardless of an employee’s performance. Encourage the top performers in your team to seek new goals and challenges. Ask your staff to complete self-assessments to determine where they see themselves and what they want to improve. Use this information to help employees achieve their full potential through ongoing feedback and training programs. It is important to remember that the performance appraisal is only a small part of the process, which should be occurring continually throughout the year.

Managers and employees should continually review their progress. Business leaders should give their team feedback to ensure that the organisation gets the most out of its employees.

How To Prepare For An Effective Performance Management Structure

HR Teams B.E.T System

Basic standards for employees An organisation’s basic standards are non-negotiable and must be clearly outlined at the induction stage. These may include matters such as timekeeping, code of conduct, mobile phone policy, social media policy, sickness protocols, grooming and appearance etc.

Expectations of employees Job descriptions outline clear roles and responsibilities for employees. These must be communicated clearly to ensure that every employee understands what is expected and required of them in the organisation.

Targets for employees Managers should review key performance indicators regularly with their teams to keep track of progress and hold regular team briefings.

A lack of clearly defined goals or key performance indicators can severely hinder your organisation. Targets can include deadlines, financial targets, productivity targets, wastage targets, sales targets etc. Targets may shift, but it is imperative that employees are fully aware of what they are at all times.

HR Team is a leading consultancy firm that provides HR, employment law, and health and safety services to employers in Ireland and the UK. The firm provides employment law and strategic human resource services to business start-ups, SMEs and large multi-national organisations. HR Team has offices in Dublin, Derry and Belfast. You can find out more about HR Team here:


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