Use appraisals to manage performance

Agree objectives

When agreeing performance objectives with your employees, first look at the aims of the company as a whole.

Some businesses make a distinction between goals, which apply to the whole business, and objectives, which apply to individuals. A goal might be to increase sales by a certain percentage over a 12-month period. An employee's objective might be to bring in, say, one new client per month over that 12-month period.

You may find following these steps helps you to set performance objectives:

• Break the business up into chunks, such as sales, production and administration. These are often called key results areas (KRA).
• Study the employee's job description carefully and decide which KRAs the job fits into - it may overlap a number of different ones.
• In each relevant KRA, find a number of objectives relevant to the employee.

Agree SMART objectives

To make sure the objectives are useful, you could use the SMART system. This means making sure any objectives are:

• Specific
• Measurable
• Achievable
• Realistic
• Time-based

For example, instead of "increase sales" as an objective, you could set: "Increase sales to new customers by 10 per cent over the next six months."

This targets new customers in particular, so it's specific. Asking for a set percentage increase makes it measurable. It is within the role of the employee, so it's achievable, and, depending on the business and market conditions, it should be realistic. And the six-month limit means it is time-based.

When performance is hard to measure

If results aren't easily quantifiable, try a system that scores employees from one to six on their level of competence in certain areas. These might include:

• leadership skills
• team working
• initiative
• flexibility

Subjects covered in this guide

• Introduction
• What performance targets and appraisals can achieve
• Set up a performance management and appraisal system
• Agree objectives
• Carry out the appraisal
• Rating performance
• Reward good performance
• Here's how staff appraisals help us monitor performance and motivate staff

 

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