In the second in her series on how to be an ethical employer, Tor Goldfield examines how to implement a fair and effective appraisal system.

Question:

Everyone in my organisation has an annual review with their manager, but I am thinking of making these more regular and including feedback from other members of the team. What’s the best way to introduce this system and ensure everyone understands the process?

Answer:

Appraisals so often cause consternation amongst managers and employees alike. In fact, research conducted by Investors in People (IiP) in December 2007 is even more damming: almost half of employees responding to the survey stated that their boss is dishonest during appraisal processes, a third thought the whole process is a waste of time and a fifth said appraisals were unfair. This must be why only 54% of organisations with fewer than 250 employees conduct annual reviews, according to the same research. What on earth is happening within UK business to generate such negative feelings about what should be a vital and beneficial management process?

The problem is that unless clear guidelines are set in place then it is very easy for an appraisal to be ineffective, at best, and extremely damaging to employee morale at worst. This is where having a strong ethical approach will ensure everyone in your organisation gets the most out of the review process.

Without doubt, much can change in a year, so appraisals should take place more regularly – ideally at six-month intervals and possibly punctuated with less formal updates every three months. This will allow you to maximise the career progress of stronger employees and raise your awareness of those who may not be doing so well. Given the current economic climate, it’s even more important to ensure your workforce is performing at its best, helping to give that much-needed competitive edge.

Prior to introducing the new appraisal system, take time to explain to everyone why the changes are being implemented and how the process will work. Listen to any concerns people may have because without their buy-in, any changes could prove to be a waste of time. Middle management may have particular concerns if they feel their responsibilities are being encroached upon.

This could be a good opportunity to re-visit (or create) job descriptions for each level. These will provide structure to an appraisal meeting. It’s impossible to accurately evaluate someone’s performance if neither you nor they know exactly what they are supposed to be achieving.

In smaller organisations, it can sometimes be tempting to allow an employee’s role to grow and evolve organically over time, but even this must be carefully managed to ensure they are still delivering against personal and corporate objectives.

Ask everyone to feed into this process, as they will no doubt have their own views about the responsibility and attributes of each role – you may even learn something new about your own organisation. Creating working groups at each level to deliver findings can generate a real sense of ownership and involvement.

One of the better appraisal styles is based on 360-degree feedback from colleagues at all levels. This helps to overcome any issues of subjectivity amongst managers and also combats the fear of dishonesty highlighted by the IiP study.

Some people may be excellent at carrying out requests and delivering on time, but have no idea how to delegate effectively, which could cause a problem as they rise up the ranks. Seeking input from those below and above provides all round insight into people’s performance.

Ensure that all feedback remains anonymous. As an ethical boss, it’s your duty to ensure that everyone responsible for managing appraisals is trained in delivering information without revealing the identity of the colleague who provided it. Transgressions of this rule must be swiftly addressed.

Review people’s performance against a pre-defined set of quantitative and qualitative evaluation criteria, and use the appraisal as an opportunity to create a clear development plan for the next six months.

You should also remember that this is a two-way process. Too many employers view an appraisal as an opportunity to get things off their chest or reprimand team members for transgressions that should have been dealt with when they first arose. Instead, take the time to truly listen to what people are saying. It may be that old processes or management structures are no longer appropriate, and employee feedback can provide the incentive and information needed to stimulate effective change.

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Ethical Q&A: Persistent lateness

Tor Goldfield is director at ethical media relations company Blue Rocket