Let’s be honest—when you hear the words performance appraisal, what comes to mind? For many small and medium business owners, it’s a task that feels complicated and maybe something you struggle to find the time for.
But done right, performance appraisals can be one of the most valuable tools for strengthening your team, improving morale, and driving business success.
What is a performance appraisal?
At its core, a performance appraisal is a structured conversation between an employee and their manager about how they’re doing in their role. It’s a chance to reflect on achievements, identify areas for growth, and set goals for the future. Importantly, it’s not just about assessing past performance—it’s about setting people (and your business) up for future success.
Why appraisals matter for small businesses
Unlike larger organisations with layers of management, small businesses rely heavily on every individual pulling in the same direction. Regular appraisals help ensure:
In a busy business, it can be easy to put these conversations off—but the cost of not having them is often much higher.
Practical tips for effective appraisals:
✅ Keep it simple. You don’t need a 10-page form. A one-pager covering key achievements, challenges, and goals is often enough.
✅ Make it a two-way conversation. The best appraisals aren’t lectures—they’re dialogues. Give your team member the space to share their thoughts, challenges, and ideas.
✅ Focus on the future. While it’s important to review what’s happened, spend most of the time looking ahead. What support does the employee need? What are their goals for the next 6-12 months?
✅ Follow up. An appraisal isn’t a one-and-done. Make sure goals and actions are revisited regularly—ideally in informal check-ins every few months.
Final thought
Performance appraisals don’t need to be complicated or bureaucratic. In fact, the simpler and more genuine they are, the more valuable they become. Take the time to invest in these conversations—you might be surprised at how much they energise your team and support your business growth.
Need help setting up an appraisal process that works for your business? Let’s chat. Book a free consultation today or send us a message—we’re here to help.
