Appraisals can give a valuable insight into how staff are carrying out their work and confirming the allocation of resources Elizabeth Mills explains how to get the best out of an appraisal.

Although there is no regulatory obligation to conduct appraisals with employees, they may well prove to be a valuable tool as we move into FSA regulation next year.

From 14 January 2005 brokers will need to comply with the training and competency rules (TC). So, for individuals dealing with private customers, they will need to "determine the training needs of those employees and organise appropriate training to address those needs" (TC 2.3.1 R).

Firms will also need to "make appropriate records to demonstrate compliance with the rules" (TC 2.8.1 R). An appraisal can assist in formally and constructively reviewing competency and performance.

By conducting regular and effective appraisals you will be rewarded with a number of benefits. You will gain a valuable insight into the work being carried out by each individual enabling you to determine whether the allocation of your resources is being dedicated to the right areas for productivity.

Added to this you will identify people's strengths, what they are particularly good at, and also what they enjoy. You can then allocate responsibilities in line with those strengths and so make best use of the skills within the team.

Corrective feedback

You will also have the opportunity to reinforce good performance. No matter how confident or self assured someone may be they still need to know when they are doing a good job.

And, of course, they also need to know when they are not. If you identify where corrective feedback is required, the appraisal will provide the opportunity to address this formally. Productivity should increase once weaknesses have been addressed and training or support is provided

It actively encourages open and honest feedback designed to help the individual and his line manager to have a good understanding of expectations and performance against those expectations. This need not be just one way.

Managers can learn something about the way we manage from their teams it they are brave enough.

Considering there are so many benefits to conducting appraisals, there is nothing to prevents us from making them part of our organisational culture? Time, or rather lack of it, can be a reason for not doing so and one that we can all relate to.

If you want to conduct an appraisal, consider first who would be best to appraise the individual. The person who is responsible for the individual's performance and development is the most obvious choice (for example, his or her line manager).

This is because, in order for an appraisal to be meaningful and of benefit, it needs to be relevant to both the parties involved.

Effective communication

After all, why would the principal/director, want to appraise a commercial account executive who reports to the commercial manager? How could he or she offer feedback on that person's day-to-day performance, offering specific examples of where they have done something well or not, as the case may be?

Would a principal want to be involved in agreeing objectives and goals, when he or she has a commercial manager who is responsible for this - and probably best placed to do it?

The purpose of an appraisal is for effective communication between the person who assigns the work and the person who receives it. It is an essential communication link between these two individuals.

Of course, the approved person responsible for the business and compliance of FSA rules should know what is going on. But an appraisal is not necessarily the best way of achieving this.

If the approved person wants to know how individuals are performing he or she should arrange a post-appraisal briefing session with the managers conducting the appraisals.

If they want to speak directly to employees they should arrange separate one-to-one meetings, with a clear agenda and purpose for what they want to achieve.

There are some key components which can help you on your way when planning your appraisal process.

Carry out pre-appraisal planning. Give the individual the opportunity to consider how he has performed before the meeting takes place.

Ask the employee to complete a 'pre-appraisal questionnaire' which will assist in focusing on the relevant aspects covered during the appraisal meeting.

As line manager you should also complete the same questionnaire, considering how well you feel he or she has performed.

The questionnaire will form the basis and structure of the meeting (see box). Preparation is significant to ensuring the appraisal meeting is focused, relevant and constructive.

At the meeting, discuss the responses from the pre-appraisal questionnaires and talk through the differences highlighted.

If other issues arise that are not relevant to the appraisal process make a note of them and deal with them afterwards once the appraisal has finished.

Agree and plan new/updated objectives so the way forward is clear. Follow up.

The outcome of an appraisal should not be a surprise. Waiting for the written appraisal should not feel like waiting for exam results. Make sure you only record what was discussed and agreed with no hidden extras.

Written appraisal

The written appraisal is not a communication tool it is a record of what has already been communicated.

Individuals have their own ways of working, their own ideas and their own aspirations. Find out what these are and you will be well on the way to getting the most out of the people who work for you, and it will also assist you in retaining those people who are key to the development of your business.


- How they rate themselves against the core competencies of their role

- How they are evidencing their competence within the areas for which they are responsible (for instance, training records, online assessment results and CPD activities)

- A review of their job to include their likes and dislikes

- A review of their objectives (did they meet them?)

- What they have learned from conducting the work and what they would do differently, the training and development they would like to undertake during the next appraisal period (that is, not just for proving competency, but for actual development purposes) any career aspirations they may have

- A summary of how they have performed overall (underperforming, performing, over-performing)

- Identify potential issues that the individual could raise and think about how you will respond. Think about specific examples you can use to make your feedback 'real' so they can relate to it

- Consider exchanging questionnaires and feedback prior to the meeting.

This way both parties can be fully prepared, and it will highlight any areas where there are differences of opinion, allowing you and them time to prepare for this.