Formal periodic staff appraisals are obviously useful in a large organisation, but the managers of most small businesses employing only a few people usually don’t deem them necessary.
“I have a café running two shifts of three waitrons, with my wife working in the kitchen,” says Mike Bell. “I don’t have the time or the inclination to arrange to sit down and do performance appraisals. If anyone falls short of what’s required, I just tell them about it and then we all get on with the job.”
Mike’s attitude is typical of most owner/managers. He dismissed the suggestion that appraisals are a valuable part of performance management as “just buzzwords that don’t mean anything here on the ground”.
Perhaps Mike and others like him are missing a good opportunity. The appraisal system should and could work as a two-way communication tool for engendering a sense of teamwork, which in turn will drive the business forward.
When you institute staff appraisals, be sure to accept that it isn’t just about your employees, but also about your management style and your company’s long-term objectives.
Benefits of Appraisals
In order to appraise your employees, you’ll be forced to sit down and define objectives – the ones you want for the business both medium and long-term. To conduct a good appraisal you’ll then have to consider how you want your employees to grow with you and fit in to the enterprise to help fulfil those objectives.
Both the tasks outlined in the above paragraph are probably ones you have never undertaken before, purely because you are too busy. Defining objectives is, however, a vital exercise on the path to success, so one well worth doing.
Appraisals are great for staff motivation, giving you the chance to give positive feedback and praise for work well done. It’s also an opportunity to reward those you wish to reward with pay rises or bonuses.
Employees who perhaps have shown disappointing performance can be encouraged by discussing how and where they can improve. There may be extenuating circumstances or personal problems impacting on an employee’s performance which are only revealed by the appraisal, and can then be dealt with.
It’s a chance to identify anything you could do to assist your staff in carrying out their work – changing systems or restructuring for example – or helping them access training. As manager you can also gain from having a better grasp of the employee’s strengths and weaknesses, which helps with future planning and making business decisions.
Records of performance appraisals can also be useful in the unfortunate event that the company becomes involved in a lawsuit, or has to decide whether to dismiss an employee.
How to Conduct an Appraisal
There are numerous formal ways and means to conduct written staff appraisals, and a little online research will reveal all!
One that is particularly favoured by SMEs is the so called “360 degree Feedback”, which does not just allow for one person’s perspective on an employee’s performance, but gains feedback from all those who come into contact with the employee in the course of their work.
This approach allows subordinates to appraise their supervisors, and co-workers to assess each other, usually resulting in a good all-round, meaningful review when all the perceptions are combined.
This type of appraisal seems to enhance mutual trust and teamwork.
When it comes to deciding how to conduct appraisals the easiest option for small businesses is to use a standard format form, and keep it simple. Don’t forget you should inform your employees (or trade unions if necessary) what appraisal system you are planning to implement.
When handled correctly appraisals can benefit both employee and employer and contribute to a happy, open working environment.