News | May 24, 2022

Appraisals – common pitfalls and challenges

We have all had that feeling around appraisal season. Everything seems fine so why waste time when we have work to get on with? However, with many employees still working from home for some or all of their time, a good appraisal system is now more important than ever before.

Are employers legally obliged to appraise employees?

In short, no, but failure to assess performance and provide feedback can have a number of ramifications as without this, how can an employer objectively justify who should receive pay increases or bonuses or tell an employee that they need to improve?

Is there a one size fits all system?

Again, no. Appraisals should be crafted around the employer’s business, how the employer measures performance and how it wishes to encourage growth.

What are the best criteria?

In the event of an employment claim, objective data is the employer’s best friend. Anything linked to quantitative data, for example, fee income, number of calls made etc will be difficult to challenge. That is not to say that these criteria should be applied blindly as there may be reasons why some employees’ stats are lower than others, in which case, the employer may need to adjust the scoring. However, Tribunals also accept that employees are not robots and therefore, it is reasonable for employers to also use subjective criteria such as attitude, potential etc but they would expect the scores to be backed up with some form of data, which is measured consistently amongst colleagues. It is important to obtain feedback from those who work closely with the employee which may include those in other departments. A common problem for managers is that they can score an employee they know well but others (perhaps those who do not work in the office as regularly) are underscored purely on the basis of a lack of knowledge.

How does an employer assess someone who they rarely see in the office?

Lockdown created a temporary level playing field for employees as it forced most employees to work from home. This took away some of the unconscious bias that can arise from favouring an employee simply because they are visible as they are always at their desk or out drinking after work. With the return to the office, we are now seeing a two tier system, with younger and older workers more prepared to attend the office whilst those in the middle, typically with childcare needs, adopting hybrid working. It is therefore important to speak to people throughout the course of the year rather than waiting every 12 months to provide an assessment. If managers feel disconnected from employees, it is their duty to bridge that gap, by ensuring regular monthly or quarterly catch-ups either in person or online. It is easy for employers to form inaccurate views about performance based on presenteeism.

Can appraisals put employers in a better position to dismiss?

Some may think this an odd question as appraisals should be all about developing employees but the emphatic answer is yes! The first situation is poor performance. Employers often approach solicitors and say how dreadful an employee’s performance has been over a number of years and that they wish to dismiss immediately. Whilst discussing the issue, it becomes clear that the appraisals are either incomplete, non-existent or actually provide an opposite view. Where an employee has more than two years complete service or a protected characteristic, moving straight to dismissal will be challenging and costly. No one likes providing bad news, but it is important that appraisals are used not just to praise employees but also to provide constructive feedback where there is a problem. This gives employers the perfect platform to formally performance manage if things do not improve. The second situation is redundancy. Unfortunately, employers can encounter changes in business activities that requires a different approach to staffing. Where there are multiple employees undertaking the same or similar function, employers often need to apply a scoring criteria to assess who should be selected. As mentioned, objective criteria are gold dust when defending litigation. By being able to refer back to accurate and well thought out appraisal scores, employers will find the redundancy process less risky and time consuming.

How does an employer appraise absent employees?

It is not uncommon for those employees who are sick or on family related leave to be overlooked or a view taken not to disturb them. This can be a huge error. Whilst employers do need to tread carefully so as not to be seen to be harassing staff, it is important that these employees are offered an opportunity to participate in a process. Employers should consider adjustments to how the process is conducted, perhaps on the phone, offsite, video link or even via correspondence and should also adjust scoring. For example, a full year target may need to be prorated based on the actual time spent working. These steps will ensure that employers maintain accurate records and limit allegations of discrimination.

What if the employee does not agree with the appraisal?

Ideally, appraisals should be agreed and signed by both parties. This limits the scope for future challenges of accuracy. However, sometimes employees will simply not accept the feedback. In this case, employers should seek to hold additional discussions perhaps with involving independent managers to try and reach a consensus. This may head off an employee grievance. If agreement cannot be reached, an employer will simply need to file its appraisal and note the comments made by the employee. These types of scenarios tend to escalate over the preceding years so should be kept under regular review.

Practical steps:

Appraisals are a keen component of recruitment and retention as well as keeping employers out of the Employment Tribunal. Employers should ideally:

  • Make appraisal questions and/or scoring as objective as possible.
  • Consider having two managers moderate scores.
  • Obtain views from those who work with the employee and do not limit to personal experiences.
  • Appraise regularly.
  • Not form views based purely on an employees presence in the office or the employer’s social scene.
  • Not forget about absent employees.