Co-founder and director of HR Consultancy 10Eighty Liz Sebag-Montefiore explains best practice for conducting performance appraisals 

Many smaller businesses have no HR department.

An SME may have a personnel officer or use a consultancy and/or specialist provider for payroll, advice and recruitment but budget constraints often mean delivering robust people policies and processes is challenging.

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Talent management is particularly difficult for smaller organisations, not least the issue of performance appraisal.

Regular meetings with employees to review performance covering role, goals, development, key performance indicators and job objectives are key to succession planning.

In a small business, it’s likely line managers will conduct performance reviews which means it’s essential preparation is put in place, so they are effective and productive.

At 10Eighty, we believe regular and constructive conversations with employees, which support their career development and performance at work are the most effective way to promote and empower employee engagement.

Employee centred

More than simply a method of keeping track of employee performance, it’s a good idea to check in with employees, providing feedback and keeping up to date with the needs of the workforce.

As a manager, you need to understand what makes team members tick – what your top performers do, how your best employees create a shared understanding and how the organisational culture drives productivity, innovation and agile performance in a competitive environment.

Using appraisal conversations to learn about your employees and how to improve their lives at work will make the organisation more effective.

Don’t get too hung up on backward-looking performance reviews but concentrate on forward-looking feedback for career path planning.

Put people first

Research suggests that traditional performance reviews demotivate people and don’t improve employee performance.

Gallup found  only 29% of employees agree performance reviews they receive are fair, and just 26% agree that they are accurate.

Many large organisations like Deloitte, Microsoft and Netflix have dropped their annual appraisal process in favour of alternative ways to manage performance.

Time with leaders and managers is a key factor in employee engagement; as such interactions facilitate open communication, feedback cycles, and opportunities for growth, as managers collaborate with teams and are available to employees.

Optimum performance

Good employees seek feedback in order to improve performance and enable personal development; what they don’t want is a retrospective critique of past performance.

They need forward-looking guidance and encouragement to enable a proactive approach to career management.

A constructive career conversation makes the process more relevant and effective.

To engage and motivate employees, the organisation should adopt an employee-centric approach to sculpt roles that enable optimal employee performance:

• What’s important to the employee?
• What do they like doing and what are they good at?
• Who do they know? Does the employee have a network that will support and enable their aspirations, development and personal brand?

It’s simple enough – improving the quality of employees’ work experience facilitates the development of talent to optimise potential.

Also read how to boost employee productivity.