Defining the Purpose of Performance Appraisals


The purpose of performance appraisals is evolving. Effective performance reviews or appraisals, (or what ever name you call them) have many benefits for the individual, managers and company. Why is it then that many people still ‘dread’ them?

It is evident that organisations need to know how well their people are performing, just as much as they need to know how the business is doing. The two are integrally linked. It is also important that people know how they are doing, as this is a key motivational factor. How all that is achieved can vary enormously.

A CIPD survey showed that over 80% of organisations in the UK were carrying out appraisals in some way, but do people really understand why they are doing them?

Purpose of Performance Appraisals

Previously, the Institute of Leadership and Management defined it as any procedure which helps the collecting, sharing, giving and using of information about people at work. It is an important tool in performance management. The aim is to improve an organisation’s performance by making better use of its people through improving their individual performance. Reference ILM Superseries – Motivating to Perform in the Workplace.

If a business wants to make the best of their team, they need a system which:

  • Regularly measures achievement against set targets.
  • Identifies and remedies any shortfalls against these targets.

Be clear on the purpose
Be clear on the purpose
The performance review process can be a positive interaction between a ‘coach’ and an employee, working together to achieve maximum performance. This is a planned discussion that provides the time for a manager and a member of his/her team to discuss past performance, set targets and identify future development. Therefore, it requires giving and receiving feedback. The aim should be for a free flowing conversation in which a range of views can be exchanged; with the emphasis on praise.

More recently the Neuroleadership Institute described it as a structured conversation to create a growth mind-set, agree where the employee wants to take on new challenges and establish how they fit with the culture. It is better if it is devoid of ratings.

Managers’ Views

During a number of our open and in-house workshops on effective performance appraisals, we have asked people to define their purpose. The managers came up with the following:

  1. To allow your people to be the best that they can be by agreeing expectations, setting goals, giving praise and helping them feel valued. This is for future business and individual success, growth; and well-being. It is important to keep the process simple and beneficial for all; whilst ensuring fairness and consistency.
  1. To
  • Create a joint vision and goals of how the individual can expand their role and grow for their own personal development.
  • Ensure people are on the right track by clarifying their role and giving recognition for achievements.
  • Agree expected results
  • Give direction and focus, knowing what the company objectives are, how they contribute to these and how they can take ownership by agreeing goals and key performance indicators.
  • Identify gaps for development needs and support.
  • Check well-being.
  • Provide time for staff to be listened to, find their voice and feel valued.
  • Motivate and increase enthusiasm – give praise.
  • Check their fit with the culture of the business.
  • Add value to on-going performance management.
  • Ultimately increase the profitability and growth of the business.
  1. An annual formal meeting to set SMARTA objectives aligned to the vision and values; identify training needs and is recorded.

It is interesting to hear the different views and how the purpose is changing. It is also what people choose to call this process, whether it is formal or informal; and how frequently they would expect to have these meetings.

It Is Not:

It's not about the big stick
It’s not about the big stick
  • Annual chat done to please ‘those upstairs’.
  • Tick box exercise to complete a complex form.
  • Something you do when you can find the time.
  • Unplanned event that you can ‘wing’.
  • Faddy idea to justify ‘jobs for the boys’.
  • Means to make your team work to unrealistic targets.
  • Opportunity to extract revenge for crimes against productivity.
  • Justification for awarding a low salary.

Most importantly, it is not the time to make people aware of poor performance. That should have been dealt with under performance management at the time. This means there should be no unpleasant surprises.

Your Purpose

When you are clear what the true purpose of performance appraisals is, you can design a process that is fit for purpose. You can then ensure that everyone has the right skills and the time to deliver that purpose.

  • What is your purpose of performance appraisals?
  • Is your current process fit for that purpose?
  • Are your people sufficiently well trained to deliver that purpose?
  • How do your team view the process – what is the mind-set?
  • What are your success criteria and are these being met?

In summary, when you get the purpose and process right, appraisals are highly beneficial.  They become an invaluable part of your performance management and contribute to business success. Get them wrong and they can have a devastating impact. Therefore, it definitely pays to ensure people are trained in how to give and receive performance appraisals.

To find out more, please contact us


Also published on Medium.

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