Whats the Purpose of an Appraisal System in a Small Business?

After having thought about this question for over 30 years, i think I finally have the answer.

When I was the Partner-in-Charge of Indirect Taxes in PriceWaterhouseCoopers (a fairly lofty title) we used to do Performance Appraisals every 6 months as an opportunity to tell others the right and wrong things they were doing in the expectation or hope that they’d fix the wrong things.

I think that that’s what many people think. They associate the words “Performance Appraisal” with a 6 or 12 monthly judgment or appraisement of an individual’s performance.

Seems to make sense, right?

But think about that for a moment.

The effect of that is:

  1. You only focus on an individuals objectives (or KPI’s) every 6 or 12 months, and
  2. You tend to judge individuals without regard to actual business objectives.

If you have the same view, then like many I used to be, you have been hoodwinked by the HR boffins.

Here’s my definition of a Performance Appraisal:

An opportunity to consider whether an individual is in a position to achieve their objectives over the next 6 months.

Can you see how that changes the focus?

  1. You need to get clear on the individuals objectives before they can assess their ability to achieve those objectives
  2. In fact, as their Manager or Supervisor, you need to get clear on your own objectives before they can get cler on their objectives
  3. And, before you can get clear on your objectives, the business needs to get clear on its objectives. So, you can see where we’re heading here – top down, right?)
  4. Then, the focus of the Appraisal becomes a positive one of considering how the individual can achieve their objectives into the future rather than

Better still, the Appraisal System becomes an Objectives and Appraisal System and with the right system, it no longer becomes something you do every 6 or 12 months. Rather, its something you do every day (or at least every week).

At Small Business Authority we have developed an entire Objectives & Appraisal System which achieves all the above plus more.

As well as the above, the System includes an approach to Appraisals (including the more formal periodic Appraisals and Salary Reviews).

And a formula for writing SMART objectives.

Just the savings in HR costs saves for the cost of the System 10 times over.

Without overstating it, we believe that this System can be the difference between an ordinary small business and a great small business.

To get clear on your needs and whether we can help you, contact us