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Free Employee Policy Templates for Small Businesses

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Updated for 2024

Appraisal of Performance

Implementing an Performance Review (Appraisal) System

Appraisal Policy

As a small business why should I bother undertaking staff appraisals?

Carrying out effective appraisal of your employees allows a variety of benefits:

  • Provides structured opportunity for staff at different levels to discuss work, their relationship and how they support each other
  • Provide a forum for individual feedback on work performance
  • Provides a formal channel through which development needs are identified
  • Clarifies what is expected of an individual and how this relates to the Company objectives
  • Improves teamwork through shared objectives
  • Allows face to face discussion on a one-to-one basis
  • Helps to plan ahead together
  • Chance to explain to staff about developments affecting the department / team
  • Opportunity to thank staff for a job well done
  • Can have a frank exchange of views
  • Can counsel and advise your staff
  • Staff can present their views and ideas
  • Opportunity for you to influence attitudes and behaviours

Although there is nothing in law which says that you have to appraise your staff, it represents best practice, and furthermore appraisal reports may also be used as evidence at an Employment Tribunal to demonstrate issues identified with a workers performance for example in unfair dismissal claims.

OK I'm convinced where do I start?

If you don’t have an appraisal scheme in place, then you need to introduce one. When planning the scheme, it is important to decide how often the appraisals need to take place, who will carry the appraisals out and any types of forms or appraisal reports required. It is up to you as the business owner to decide the sort of system which best suits your business (but don't forget to ask your staff what they think too!). You need to ensure that your employees understand why you are introducing the scheme so they do not feel threatened by it. Once you decide on a system (keep it simple by the way!) then you need to communicate the new arrangements to your staff.

Have a look in our download section below. There are a number of helpful resources including a simple appraisal policy template, sample appraisal documentation and a number of other helpful documents. We also have a full appraisal training workshop free template which you can use to help inform and train staff and supervisors about the appraisal process.

How do I carry out a staff appraisal?

Plan - Agree a date for the appraisal interview and arrange a suitable venue which will be private and where you will not be disturbed - an office is fine if the phone can be re-directed - leave at least one hour for the interview.

Prepare - inform the appraisee well in advance. remind them of the process and ask them to prepare. There is a form below - 'Appraisal and You' which will help the appraisee to prepare for their interview. You as the manager should also prepare thoroughly by collecting the information required beforehand. This will include how they have performed against any objectives set for them last year, problems they have had, any relationship difficulties and any development needs you think they may have.

Appraise - structure the appraisal interview along these lines:

  • Introduction - remind the appraisee of the purpose of the interview and try to put them at their ease.
  • Ask the employee - for their view of how the last year has gone, what they thought they had done well and not so well and any major problems they had.
  • Review their performance / objectives - go through how you think these went and discuss in detail. Include whether they met any deadlines, were proactive in solving problems, were sufficiently trained or skilled to do their job and any constraints which were outwith their control.
  • Objectives / tasks for this year - identify and agree these with the appraisee including any timescales or performance criteria required. Based on what you require of them, explore whether there are any skills or knowledge gaps which need addressed to support them doing their job (and if appropriate for their future career).

Conclude - summarise the key points you have agreed with the employee including the objectives agreed, actions to be taken forward by you or the appraisee, agree a date for the next review (this could be in 1/3/6 months time depending on what would be most appropriate).

Write down - what was agreed at the appraisal interview - preferably in the format you have outlined in your appraisal system. Give this to the employee and ask them to sign it off as an agreed output from the appraisal interview. Ensure a final agreed copy is given to the employee and another copy placed on their confidential file.

Got it...any pitfalls I should be aware of?


1. Dont Lecture! Ensure that the employee is allowed to do most of the talking during the interview. Remember this should be a positive conversation and must not make the appraisee feel threatened or anxious. Even if you need to be critical you should engage the appraisee by asking them what they think could be done to address the problem.

2. Don't connect appraisal to pay rises. Don’t ever expect an honest and open discussion about improving an employee's performance if the outcome of the discussion will affect that employee’s salary. While the employees performance may well form some part of how you decide any individual pay award, it is best seperated out from the appraisal process.

3. Don't forget the team! Traditionally appraisal is done on an individual basis: it's the individual's style, effort and outcome that are appraised not the team that they are in. While this is generally the correct approach, it can be extremely helpful to also review the way the team works collectively with that team and if appropriate set some specific team tasks / objectives which the whole team must work on together to achieve.

4. Don't forget yourself! You are likely to receive a lot of direct feedback from your staff on how they think you are performing! Don't ignore this and try to understand and accept any fair criticism. After all it is unreasonable to ask staff to change or improve if you are not willing to do so yourself!

Free Performance Management Appraisal Programme Documents for Download

1. Appraisal Workshop - This a full 37 page Appraisal Workshop with all the material needed to implement an appraisal system for your organisation. It includes a variety of exercises to assist this. It also has a handout for Appraisees to assist them to understand and participate in the process.

2. Simple Performance Appraisal Policy - Appraisal Policy for a simple implementation. However it covers all the elements of effective appraisal.

3. Appraisal Documentation Template
Generic Pro-forma including a personal development plan which can be used for any appraisal implementation

4. Appraisal and You
Form to help the appraisee prepare for their appraisal meeting

5. Appraisers Checklist
Checklist for the manager / supervisor undertaking an appraisal. This will ensure that no part of the process is missed

6. Response Style Indicator
Test which allows appraisers to assess their response style - can be used as part of appraisal training.

Useful Links
Business oriented site with a great deal of information on performance appraisal as well as a whole number of assessment tools - all for free

Advice, Conciliation and Arbitration Service
Useful downloadable templates featuring a number of different appraisal forms