Some people advocate separating appraisals from pay review, however this does not make sense in organizations which require staff to be focused on their contribution to organizational performance, especially where there are clear accountabilities and measures.

Organizations rightly or wrongly are geared to annual performance, and the achievement of a trading plan. This cascades to departments, teams and individuals, so it makes sense to assess people over a time period that fits with what the organization is working to. Put another way, it's not easy to appraise someone on their year's performance half way through the year.
Transparency and accountability are prerequisites for proper assessment and appraisals.

Arguably 'best practice' is to schedule appraisals close to trading year-end, when year-end results and full year performance - for individuals and departments and organizations - can reliably be predicted. By holding appraisals at this time, and staff knowing that appraisals are focused on this trading period, people's thoughts and efforts can be concentrated on their contribution towards the organization's annual trading plan, which is a main appraisals driver and output (as well as individual development of course). Holding appraisals after year-end means that people start the year without formal agreed objectives, and also creates bigger delays for financial and payroll departments in their task to process pay awards and adjustments.

Departmental, team and individual objectives provide the context for the appraisal, linking clearly to performance bonus and performance-based pay awards, the rationale for which needs to be transparent and published prior to the start of the year to which they relate, for the full benefit and effect on staff effort to be realised.

Pay review would also coincide with the trading year, which makes sense from the planning and budgeting perspective. The business is in a position to know by the close of the final quarter what the overall pay review position is because the rationale has already been (it jolly well should have been) established and year-end financials can be predicted. Moreover the next year's trading plan (at least in outline) is established, which gives another useful context for appraising people, especially those (most staff hopefully) who have contributed to the planning process (i.e., committed as to what they can do for the coming year, targets, budgets, staffing levels, priorities, objectives, etc).

The appraising managers can therefore go into appraisals fully briefed and prepared to discuss and explain the organization's overview results and financials to the appraisees. And the appraisees can see results and think in terms of their full year performance and contribution to corporate results, plus what they plan for next year, which provides the basis of the aims and objectives to be reviewed through the coming year and at the next year's appraisal.

Other than for directors, complex or difficult appraisals, appraisal meetings should not be 3 hour marathon sessions - this daft situation happens when boss and subordinate never sit down together one-to-one other than for the annual appraisal. If you only talk properly with someone once a year no wonder it takes all afternoon...

Boss and subordinate should ideally sit down one-to-one monthly (or at worse, quarterly, for the more mature, self-sufficient people), to review activity, ideas, performance, progress, etc., which makes the annual appraisal really easy when it comes around, and manageable in an hour or 90 minutes maximum.

Use of a good appraisal form including self-assessment elements is essential for well organised appraisals.

Ensure that appraisers and appraisees understand that they must prepare in advance or you're looking at 3 hour marathons again.

Training for appraisers and appraisees on how to use the appraisals process properly is very helpful obviously, especially taking a more modern view of what makes people effective and valuable to employers, and how to encourage this development, which relates to developing the whole person, in the direction they want to go, not just job skills.

Alan Chapman
http://www.businessballs.com/performanceappraisals.htm

See also:

• Age diversity information -- UK regulations