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The Importance of a Staff Appraisal Policy - Guidance For Employers

Managing Performance Before a Problem Arises

It is implied into every contract of employment that an employee will perform the role to a minimum required standard. What the required standard is will vary from role to role and may encompass not only the technical aspects of the job, but more subjective aspects, such as the employee's attitude or ability to interact with clients and colleagues.

Those in very senior roles are expected to be more aware than most of what is required of them and to be capable of judging for themselves when something falls below the required standard.

To demonstrate a reasonable belief that an employee is incompetent so as to justify dismissal, employers need to produce some evidence of poor performance. While this may be gleaned from data such as sales or productivity reports, records of customer complaints or a demonstrable fall-off in trade, the most important evidence will often be provided by those managing and supervising the individuals concerned.

A performance appraisal system that is diligently pursued by the employer can prove invaluable in motivating staff, but can also provide important evidence of performance problems which can later be used to support a fair dismissal. In the event of dismissal, the employer is also likely to be better placed to demonstrate that opportunity for improvement has been given if regular appraisals have been undertaken.

Existing procedures

If you currently have a system for dealing with performance issues, even if it is not written down in a document, it may be that these existing procedures will have to be incorporated into your new written policy.  You should take professional advice about what you need to do if you already have rules and regulations governing performance issues before you plan to implement a new policy.

Managing performance

An Appraisal process is but one aspect, albeit an important one, of a collection of tools and approaches that can be grouped under the term ‘Performance Management’. Put simply, this comprises the things that an employer can do to ensure that the employee is working most effectively, and has all the support, training and development needed to assist them to perform in their role to the best of their ability.

It can include

  • Induction process
  • Probationary reviews
  • Informal one-to-one review discussions
  • Support and Supervision system
  • Counselling meetings
  • Team meetings
  • Peer support
  • Formal annual performance appraisals 
  • Observation on the job
  • Performance management / disciplinary procedure

Your organisation may have separate policies and procedures on some of the above elements, and you should ensure that all policies and procedures on this subject are compatible and complementary.


Decide what timescales you will put in the procedure – what will your ‘appraisal cycle’ look like. Will people have an individual appraisal date depending on their start date, or will you seek to ensure that all appraisals happen each year around the same time? Given that the appraisal system should result in individual objectives that are based on organisational objectives and feed into the overall workplan and learning and development plan, it is probably more desirable to undertake all appraisals around the same time each year.

Appraisal Paperwork

You can design your own paperwork to suit the needs of the organisation. You may additionally devise a separate Action Plan/ Workplan and / or Personal Learning and Development plan arising from the Appraisal form and discussion. All paperwork should be referred to throughout the year during review sessions to ensure that the plans remain on track.

Training in appraisals

If the appraisal system is to be effective it is important that both managers and staff understand the purpose behind it, the process itself, and what is expected of both parties. Ideally, training (or briefings / workshops) should be arranged for staff and managers. You may also want to develop Guidance Notes for managers and staff. At the end of this document you will find an example of guidance notes for managers.


Once you have considered all of the above and have a document you are happy with, send the document to all staff, staff representatives or recognised trade union representatives asking for their comments by a specific date.  This is called the consultation process and you should give staff a reasonable amount of time to read the policy and return their comments.  Having an end date for this is essential so that implementation of the policy can take place.  Take any comments into account when making changes and issue to staff as the final policy, outlining how the consultation process impacted on the final document.

If you have a recognised trade union agreement there may be a process of negotiation to go through before a final policy is agreed upon.


The procedure should be given to all employees upon their induction.

Using Your New Policy

Once you have gone through the action plan and implemented your policy it should be used in all performance issues and the procedure that you have decided upon should be followed to the letter.  This way everyone will be treated the same in line with current legislation.

360 degree appraisals

‘Traditional’ appraisals involve the manager appraising the staff that they manage. 360 degree appraisals involve the appraisee receiving feedback from people (named or anonymous) whose views are considered helpful. These can include the appraisee's peers, up-line managers, subordinate staff, team members, other staff, service users, suppliers - anyone who comes into contact with the appraisee and has opinions/views/reactions of and to the appraisee.

They can be a powerful developmental tool and quite different to traditional appraisals (which fulfil different purposes). As such, a 360 degree process does not replace the traditional one-to-one process - it augments it, and can be used as a stand-alone development method.

Policy Review

Set a date to evaluate the effectiveness of the policy, perhaps annually, and nominate a person to take responsibility for this.  Changes to the policy may also be required by changes in legislation and new case law.

Considerations For Employers

Addressing performance issues as soon as they arise is important from a legal perspective and can also have a number of advantages for both employers and employees. For example:

  • An employee is more likely to turn their performance around if concerns are highlighted at an early stage than if matters are left to fester.

  • If offering training and support results in a positive outcome, this is less time-consuming and costly than going through a poor performance dismissal procedure and recruiting a replacement.


  • Being able to demonstrate that an employee has been given support and the opportunity to improve will greatly improve the employer's chances of effecting a fair dismissal.

Employment Law Advice and HR Support for Employers

If you require employment law advice on Time Off For Dependents or any other employment issue give us a call today on 0370 218 5662. You can also find out more about our fixed fee HR packages here and fixed fee employment law packages here, or get in touch with us here.



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