Agree a date, time and location for the appraisal discussion.

• There is merit in having a cycle for appraisals: at least annually, but a lot changes in a year, so quarterly or six monthly is recommended, to review how employees are working towards their objectives, help coach them back on track or revisit the objectives if the business has changed direction.
   
  
• Allow plenty of time. A rough guideline would be 2-3 hours for someone doing a reasonably complex job, otherwise 1.5-2 hours.
   
  
• Make sure that the meeting will not be interrupted. If you have a busy office, go somewhere else, take the phone off the hook and switch off your mobile.
   
  
• Don't cancel the meeting unless it is absolutely necessary. Re-arranging it because you need to get your paperwork up to date will give the impression that you value your paperwork more than your employee's work.
   
  

An appraisal review preparation form may assist the employee to prepare for the discussion, encourages his/her full participation in the process and also may give you a good indication of which areas will need full discussion during the meeting.

You may wish to print out your appraisal form and make notes to structure the meeting and the feedback. Use one copy for your preparation - do this BEFORE the appraisal! If you issued the appraisal preparation form, you may wish to compare your views of the employee's performance, training and development needs, and suggested objectives against his/hers. Use the form to record the outcome of the appraisal discussion.

Do your preparation:

• Make some notes
  One way to prepare for an appraisal meeting is to gather evidence throughout the review period: every time someone does something really good, make a note of it in a diary or specific file (as well as praising the employee!) Insert papers, such as thanks from co-workers or customers, so that you have the evidence to hand when you come to have the discussion. Evaluation forms from training courses, project reports etc can also be a great prompt. Encourage employees to do the same. Once the review is complete, the documents should be disposed of securely.
   
  
• Consider achievements over the whole review period
  As well as stating the extent to which objectives have been met, include any shortcomings and reasons, and anything done in addition to the main job role. It's always easier to pick up on non-achievements but make sure you document positive actions too.
   
  
• Plan your feedback - both positive and constructive suggestions
  Have examples ready and be specific eg "I witnessed you do this" and (a) "it's clear this is a key strength of yours. I think we can develop it in this way" or (b) "this wasn't dealt with in the best way; how do you think you could do this better in the future?" Follow on from strengths to be built upon and consider what development the employee needs. If possible, measure this against the competencies used within your business, so that there is a clear link between recruitment, performance management and development.
   
  
• Think about future objectives
  This is your opportunity to ensure that objectives are set in line with your business goals. Often objectives have no link to business strategy and whilst this is sometimes difficult to see in all jobs, there will always be something the employee can influence, so think carefully about this.

  Set "SMART"objectives, ie ones that are that are specific, measurable, achieveable, realistic and with timescales. They should be stretching enough to motivate but not impossible to achieve. Wherever possible, have timescales to achieve the objectives and ensure you can measure these. For example: rather than just "increase customer satisfaction", a more specific objective would be to "reduce customer complaints by 20% in six months".

  Make sure that some of the objectives you set are related to how the job is done. There are many examples of employees achieving a financial objective, but the way they went about it may leave a lot to be desired, eg upsetting colleagues, abusing the discount system etc. And don't forget to take into account management skills when appraising your managers!

  You may wish to also consider succession planning . Take the opportunity to consider and discuss future roles and responsibilities: these should link into development needs.

• Get feedback
  If relevant ask others for feedback eg customers/clients of the appraisee. If the employee works in a supporting role (eg HR, IT, finance), you may wish to get input from the managers who use these services. However, if you do this, you should advise the employee in advance to ensure this is seen positively.

Conduct the appraisal, using the following structure:

• Open the meeting:
  • Clarify the time allocated.
  • Check that the appraisee has done his/her preparation.
  • Explain the format and the importance of carrying out reviews.
  • Suggest that the appraisee should make a few notes.
  • Complete the appraisal form either together during the meeting, or at the end of the discussion.
  
   
  
• Review:
  • Review the period (year/half year/quarter) to date.
  • Ask the appraisee to give his/her assessment first.
  • Add your feedback and that from others if relevant. Think carefully about what feedback and observations you can share which will help the appraisee to develop and learn. Be as specific as you can.
  • Focus both on what's gone well and what could have gone better. 'What did you learn from that?' 'What would you do differently next time?'
  • If your appraisal scheme requires this, agree an overall performance rating for the period.
    Research shows that some employees would like to have their rating before the feedback, suggesting they may not concentrate on what you have to say until the rating is given as they may be pre-empting their "score". This may not work for all discussions (such as those where you will be applying a "below expectations" score), so you may wish to choose to tailor this to each individual.
  
   
  
• Look to the future:
  Look to the future and agree key objectives. Again, ask for the appraisee's views first. Explain how the employee's objectives link with those of the business so that he/she can understand the required contribution. With the employee leading the discussion, explore his/her career development plans (if any) and what training and development is required.
   
  
• Get feedback:
  This is a great opportunity for you to ask for feedback from the employee: 'What can I do differently to help you in your job?' It can also be a good time to generally discuss underlying issues and how things are going, clarifying whether, from both sides of the situation, expectations are being met.
   
  
• Close:
  Summarise, agree actions and date of next appraisal, and close the meeting. Don't forget to end on a positive note of encouragement wherever possible.

Complete the appraisal form and ensure that it is signed off by both parties and (if relevant) the appraiser's manager. The employee signs to agree the content of the discussion - even if he/she was not happy with the outcome! Allow a space for the employee to comment where appropriate.

Let the employee have a copy of the final, completed form so that he/she can check performance against the objectives through the year.

The process is not about completing the form; it's about continually developing and improving the performance of your employees. Ensure, therefore, that what is agreed is actioned within the timescales you set at the meeting.

• Lead by example. If you only pay lip service to this process, your team will follow your lead and the appraisal process will suffer down the line. This presents problems such as employees not being motivated to reach their targets or to develop their skills to further the organisation.
   
  
• Try to incorporate objectives which are both task and behaviour orientated.
   
  
• Don't view this as an HR process (or even barrier!) This is a tool to enable your organisational objectives to be met via your people.
   
  
• The appraisal is a unique opportunity to have a detailed discussion about the individual: how he/she is doing, where he/she is going, what support and development is needed to enable him/her to be even better at the job. Where it is difficult to hold uninterrupted conversations on site or to maintain confidentiality it may be a good idea to hold the discussion off site.
   
  
• Listen! Use open questions to clarify the feedback, use probing questions where you think there may be an underlying issue to get to the bottom of and watch out for body language that can give you other signals (such as defensiveness).
   
  
• Show that you own the feedback you are giving: "I feel....." "I think....." rather than "they have asked me to tell you this but I don't really agree with it". If you don't agree, then don't discuss it, unless you are able to support the feedback objectively.
   
  
• Preparation is important - you will only get out what you put in!
   
  
• Do not 'store up' feedback for the appraisal discussion - there should be no surprises! The appraisal is the opportunity to summarise things that you have addressed throughout the year. However, as each issue arises, you should take the earliest opportunity to discuss and address it. Usually a discussion and a way forward can be agreed but very occasionally this will not be possible and you will need to progress to the disciplinary procedure . See our separate guide on handling poor performers .
   
  
• Don't forget that appraisals are NOT about filling in a form. They ARE about having a detailed discussion about the individual, which is followed up with actions for development to improve his/her performance at work.

  That said, it is important to have a written record of the discussion documenting any shortfalls in performance, as further action cannot easily be taken if not recorded. On a more positive note, reward significant achievements!

• The first review is always the most difficult, as there is no starting point, so get this done within three months of the employee taking up the job, using the objectives and development plan that you set at induction and observations made during the employment so far.
   
  
• Have you considered 360 degree appraisal ? This is an additional tool which can be used by the employee to gain feedback from his/her manager, peers and direct reports. It can be as simple as asking for key achievements over the period, three main strengths and three main areas for development. There are more complex tools but they are quite expensive so this can provide a basic understanding of colleagues' perceptions. The results may not always be what the employee wants to hear, but will certainly give food for thought!
   
  
• Ratings must link directly with behaviours observed and advised. You cannot take action on performance - outstanding or problematic - without well-documented appraisal discussions and ratings.

• Halo/horn effect:
  If someone does a really excellent job on one occasion, especially recently, it is easy for this to cloud your judgement, resulting in the person receiving a high rating, even though, if you look at his/her performance throughout the rest of the year, this was perhaps fine but not outstanding. This is known as the "halo effect".

  Alternatively, if an employee has made a major error or upset someone significantly, yet his/her performance has exceeded the requirements of the job for the rest of the year, you may be tempted to mark him/her lower. This is known as the "horn effect".

• Negative/positive leniency:
  The appraisal process can be just as daunting for the manager as the appraisee! Therefore some managers are tempted to give everyone a high rating to avoid "rocking the boat". This is "positive leniency" and it is never a good idea. Giving a high rating when someone is not outstanding may make him/her feel good at the review, but it will not help you to fairly manage your team. Those who have genuinely put in the extra effort and achieved high targets will become disillusioned that they are receiving no recognition for it. Positive leniency also makes it much more difficult to address poor performance later on through the disciplinary procedure.

  The reverse, "negative leniency", is where a manager feels no-one ever reaches the goals that are set for them and therefore marks everyone down. This can have a similar effect to positive leniency by reducing morale as employees feel they are never going to achieve their goals. In such a situation, if you genuinely feel that standards are not being achieved, review the goals you set. Are they realistic and measurable? Did the employee buy into them? Are you encouraging your staff and providing them with the resources required to achieve?

• Central tendency:
  This occurs where a manager does not want to upset anyone and have to discuss shortfalls, or rate someone high, which might upset the rest of the team. As with the examples above, this will not help to motivate the team.
   
  
• Insufficient information:
  It is important to gather as much information as you can from other sources (see guidance above) rather than relying solely on your own personal experience with that employee. There may be situations that this person has handled excellently, of which you are not aware (although it is hoped that someone would bring this to your attention!) Conversely they may have made an error which was not brought to your attention at the time but needs to be addressed.