Recent research has suggested that just 58% of the UK’s workforce receive a formal appraisal and that poorly executed appraisals are costing the UK economy over £2 billion. Gareth Chick presents his top tips for appraisal success.

Investors in People announced in December 2007 that UK workers no longer rate employee appraisals. According to its research of over 3,000 people, many of them had fallen completely out of love with appraisals, believing them to be completely irrelevant.

In the poll, 29% of people stated that the appraisal experience was a complete waste of time; 44% believed their appraiser had been dishonest during the appraisal and one in five felt the system was ‘unfair’. It was also felt that managers were failing to address issues raised by their employees and a lack of feedback given during the year.

So it seems that there is widespread distrust of the system amongst employees. But what can UK businesses do to rectify the situation and to make appraisals more meaningful again?

Do you need an appraisal?

Firstly, companies need to take a long hard look at the system they have in place. Questions need to be asked including why they hold appraisals in the first place and whether or not their appraisals achieve their desired goals? They need to ask themselves honestly whether or not they simply a tick box exercise for their management or if they are a genuine and useful business tool which can be used to motivate and develop their employees?

Involve staff in the appraisal process

A ‘one size fits all’ approach to appraisals generally doesn’t work. Businesses should instead design a system that works for their specific company and its employees. For example, an appraisal that works well in a medium to large financial institution would be very different from an appraisal that would suit a small media company.

To ensure buy-in from everyone, staff and senior management should be totally involved in the process – from the appraisal design to its implementation. Staff should be canvassed about the type of appraisal that would work for them. By getting everyone’s agreement and support of the process, a culture change is far more likely and a more workable scheme more easily achieved.

Train your managers

One of the major criticisms of the research from Investors in People was that appraisals sometimes felt like a management chore and that managers were simply going through the motions every year. One of the reasons for this is lack of management preparation and training. Companies often delegate appraisals to line managers, who have little or no HR experience and who are often ill prepared for the task. It is little wonder then that their ambivalence is picked up by employees who end up feeling deflated and unmotivated.

Training must be provided for managers to ensure that they prepare well for the appraisals and understand how to carry out an appraisal effectively. The training should cover topics such as tackling difficult subjects; dealing with staff hostility and how to deliver positive feedback.

According to the research, one of the big problems with appraisals is that staff felt that their managers do not tell them the truth and skirt around difficult issues. This kind of training would give managers the confidence to tackle such issues head on and with the right amount of sensitivity.

Ensure they prepare

The meetings should be arranged well in advance to allow the appraiser and appraisee ample time to gather the necessary data to support a constructive dialogue at the meeting. Time should be allocated to appraisees to prepare for their appraisals.

Most of the talking should come from employees

Appraisees should also assume ownership of the process. It is important that they demonstrate commitment to their own performance, training and development and are prepared to talk. It is suggested that, as a rough guide, appraisees should do 80% of the talking during an appraisal meeting.

Don’t dwell on the negative

Organisations must understand that an employee will tend to remember only the negative feedback so they should take pains to ensure that the appraisal is more balanced towards the positive. Often, too little time is spent focusing on things that are done well by employees, with goals achieved and projects that run smoothly sometimes being taken for granted.

Set individual goals for different employees

Employers must remember that every employee has different needs. If two workers are doing the same job, they will have different goals and ambitions; what works for one, might not work for the other. When putting in place objectives and goals for the future, companies should ensure they really address the needs of that particular individual and will contribute to their future career development.

Feedback all year round

Whilst appraisals are usually a six monthly or annual event, feedback should not be confined to these formal review sessions. Instead, employee feedback should be ongoing, with continuous assessment being given by managers.

By making feedback and assessment part and parcel of working life, employees will start to trust their managers and stop seeing appraisals as an intimidating, stand alone event that has little bearing on the rest of the working year.

Appraisal follow up is also important. If it is decided that the goals laid out are to be reassessed in six months, then managers must stick to the plan and set up the meeting. Too often, follow up is neglected which only adds to the employee’s frustration and undermines the importance of the entire appraisal system.

We all know that high staff turnover is the most costly and time-consuming issue for any business. However, if appraisals were once again considered to be a serious management tool, rather than a waste of time, organisations could improve their staff retention records and boost their employee motivation levels this year.

Gareth Chick is director of business consultancy Spring Partnerships.