What Are The Benefits Of Conducting Performance Appraisals?

Getting the most out of employees has always been challenging. Read on to find out how you can make small changes to your employee appraisals and earn success for your business.
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Performance Appraisals

Small Changes That Make a Big Difference

Getting the most out of employees has always been challenging. Changing public and business attitudes have only led to tougher conditions for workplace success. “People businesses” like hospitality are hit especially hard by these expectations, and staff’s motivation can suffer as a result. That said, getting the best performance from employees can dramatically impact customer satisfaction, which the business directly benefits from, and one way of promoting this is with the use of performance appraisals.

Performance management is not just about dealing with poor performers. It is a process that begins with getting the right people, setting the right employee expectations, coaching employees to deliver efficient, high-quality service and dealing with under-performance in a proportionate and appropriate manner.

Last week, we discussed how you can stay compliant with employee labour law. The next article in our series of how small changes can affect your business in a big way explores why you should think about doing performance appraisals with your employees and how you can carry them out.

Part 7: Performance appraisals

The performance appraisal process can be extremely positive for both employees and management. Planned and executed properly, they offer an important opportunity to provide employees with constructive feedback. This can help them define successful career paths for their work and careers in both the short and long-term. The many benefits of performance appraisals include:

  • Learning about areas of your business that could be improved.
  • Identifying areas for further training.
  • Improving performance and profitability.
  • Increased job satisfaction and motivation.
  • Better morale and teamwork.
  • Surface – and resolve – any grievances.
  • Improved planning for employee development.
  • Fair assessment of pay increases.
  • Identifying candidates for promotion/succession planning.

Keep in mind that a performance appraisal is a dialogue. Employees must feel empowered to open up and speak frankly. Likewise, they must feel that feedback is not criticism but is intended to make them happier in their work by being more productive and more highly appreciated. Therefore, your choice of words as a team leader when giving feedback must reflect this approach.

By the way, a performance review is not a substitute for providing constant constructive feedback throughout the year. Moreover, while crucial, simply doing end-of-year reviews is not often enough to really grasp how well your employees are performing and feeling. Many HR organisations now advise half-yearly or quarterly reviews, and a Gallup survey found that employees who have had a conversation with their manager in the past six months are 2.8 times more likely to be engaged.

Looking to keep staff involved therefore brings us to 360o reviews. This feedback gives an employee the opportunity to understand how their work is viewed in the business from all directions. This is achieved with the input of colleagues whom they share an important working relationship with, like management or staff members who work with the employee. For example, in hospitality, this could consist of the store manager and the head chef.

The big advantage of the 360o review lets the employee know how they affected the work of other employees, rather than if they accomplished their own. The 360o review instead focuses more directly on the skills and contributions that an employee makes. The goal of the feedback is to provide the employee a balanced view of how others view his or her work contribution and performance, in areas such as:

  • Leadership.
  • Teamwork.
  • Interpersonal communication and interaction.
  • Management.
  • Contribution.
  • Work habits.
  • Accountability.

This list is not exhaustive, and depending on your industry’s priorities, you may wish to focus on different areas.

However, there are a few pitfalls to watch out for. Done wrong, performance appraisals and reviews can be painful and unhelpful for everyone involved, so it is important to know what to talk about. For that, consider a reporting system that logs basic information like employee attendance times and issues to best indicate your staff’s performance beforehand.

In the next article, we will cover what to do and what to avoid when carrying out performance reviews.

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