Performance review template and guidance

Posted on March 17, 2021
Posted by Frankie Mundy

performance review templateIt’s that time of year again…! If your business is gearing up to carry out annual performance reviews, make sure you plan ahead. Whilst you’re not legally obliged to have a formal performance management process in place, it is good practice. Not only will it help you to make sure your staff are performing as expected and to identify any issues or concerns promptly, but it will also ensure that you’re incentivising staff in a fair and transparent manner, avoiding potential claims of discrimination. In fact, carrying out a formal review process is perhaps more important than ever if your staff are working remotely during the coronavirus pandemic, as you may not have the same level of oversight of how your staff are getting on. Preparing a performance review template is an important part of any robust appraisal process; this guide provides a template you can use alongside guidance on how to manage the performance of your staff. 

 

Performance review template

 

What is a performance review template?

It’s a form used as part of a formal performance review or appraisal process to assess and record your employee’s performance and set out a personal development plan for the future. It might also be referred to as a performance review form or an appraisal form. 

 

What should I include in an employee’s performance review form?

Your performance review form can serve two functions: 

  1. To assess how well your employee has met the objectives and competencies expected of them.
  2. To plan ahead for the coming year by putting in place a personal development plan for your employee. 

 

Our performance review template provides for you to do both of these things by following these steps:

 

  1. Provide it to your employee ahead of their performance review meeting to allow them the time to reflect on their performance and fill in their sections of the form.
  2. During the appraisal meeting, go through the form together and assess how well your employee has met their objectives and the competencies expected of them.
  3. Use the form to plan ahead for the coming year by setting new objectives, development and training needs for your employee (see below).  

 

What should my employee’s personal development plan say?

It is sensible to use a performance review template to put in place a personal development plan for each of your employees. This will help ensure that their objectives and performance needs are clear and identify any training and development needed. ACAS recommends that personal development plans include:

  • A description of the employee’s development need
  • Clear and reasonable objectives for how the development will be achieved
  • A timeline for achieving the development
  • How you will measure whether the development has been achieved

In order to ensure that there is no confusion around what you expect your employee to achieve, your targets should be clear and tangible. Where possible, they should adhere to what are known as SMART objectives. This means that they should be: 

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time bound

For example, requiring an employee to increase sales by 10% within the next 12 months, or to complete a particular type of paperwork within a week of being asked would be a SMART objective. Requiring an employee to improve sales as much as possible or to complete paperwork as quickly as they can would not meet the SMART criteria.

You should also include any competencies that you need the employee to display to be effective in their job. This will depend on the values and culture of your business, but may include:

  • Focusing on client relationships and needs
  • Showing a commitment to development, both personal and of colleagues
  • Leadership
  • Commercial awareness
  • Communication

Note that you must tailor your objectives to the specific staff member concerned. If a staff member is disabled you must take this into consideration when setting their objectives. You have a duty to make any reasonable adjustments to ensure that they are not placed at an unfair disadvantage due to their disability. For example, if one of your staff members is dyslexic, you might allow them longer to carry out a stock take. If you have part-time workers you must set them objectives that they can realistically achieve within their working hours.

 

Managing staff performance

 

Do I have to have a formal performance management process in place for my staff?

No, this is not obligatory. 

However, it is advisable to put procedures in place to monitor the performance of your staff on a regular and ongoing basis. It will help you to ensure that under-performance is identified promptly, that any issues or concerns your staff have about their work are dealt with and that you are able to incentivise staff (if you intend to do so, eg with bonuses) in a fair and transparent manner.

How you manage the performance of your staff members will differ depending on whether they are employees or other types of worker (such as freelancers, casual workers or agency workers).

Employers typically only have a formal performance management process for employees. This is partly because employees have the right not to be unfairly dismissed, and it is therefore particularly important to make sure you have a transparent and consistent method for managing their performance. As well as this, employees usually represent your most long term and expensive staffing investment, so it will typically be in your interests to ensure they are performing to the levels that you expect. 

You should not formally manage the performance of freelancers or casual workers as this will tend to suggest that such a staff member is an employee, with all the rights and security that entails.

 

How should I manage the performance of freelancers, casual workers and agency workers?

You should not formally manage the performance of freelancers or casual workers as this will tend to suggest that such a staff member is an employee, with all the rights and security that entails. You should also not formally manage the performance of agency workers.

You will of course want to check that these staff are achieving the objectives and completing the work you require so that you can address any performance issues that arise. You should offer feedback and keep records of any performance issues. This will be invaluable in case you end the staff member’s contract and they allege that you have done so for an untoward or discriminatory reason. For agency workers, you can also provide feedback to the agency. 

 

Performance management process

 

What is involved in a formal performance management process?

 

Your process will usually involve:

 

1. An annual appraisal or performance review

This will help you to assess whether the employee has met their objectives and to set objectives for the following year; see Personal Development Review Form for a performance review template.

 

2. Regular informal opportunities to review performance

In the period between setting an employee’s objectives and appraising their performance, their line manager should ensure there are regular opportunities to review the employee’s performance and give any informal feedback. This will include regular informal one-to-one meetings with the employee to discuss their on-going work and development plus formal reviews to discuss how they are performing against their objectives and any further development needs. Serious problems should not be raised for the first time at the annual appraisal; you should deal with them as soon as they arise, bearing in mind you may need to treat them as disciplinary matters. See Taking disciplinary action for how to go about this.

 

3. A separate process for staff members on probationary periods

In addition, it is common to have a separate process for staff members on their probation period; they will benefit from closer supervision as they settle into a new role, and it gives you an opportunity in turn to assess whether the staff member has a future with your business. See Probation Review Form for a template review form and our employer’s guide to probationary periods for more information.

 

 

What preparations should I make before putting a formal performance management procedure in place?

 

1. Check your employees’ contracts

When introducing a new performance management process, the first thing you must check is whether the new process will involve changes to employees’ contracts of employment. For example, you might want to introduce a performance management process which says that an employee will not receive a pay rise or bonus if they receive a low rating in their appraisal. However, if their contract says they are automatically entitled to annual pay rises or an annual bonus, you may not be able to legally make the change without their consent. If you do so anyway, this would amount to a breach of contract and you could face a claim, or the employee could treat their contract with you as at an end and claim constructive dismissal.

 

2. Ensure managers are committed to the process

Getting manager and senior staff buy-in is critical to the success of any performance management process.

 

3. Consult staff if appropriate

If you have staff representatives, it may be sensible to consult with them about a new performance management process. If not, you should think of alternative ways to consult staff, for example by email updates or at staff meetings. You could also use such staff or staff representatives to help with trialing the scheme, so you can get useful feedback before it is rolled out fully.

 

4. Train staff to implement the scheme.

Such staff will need to understand how the new process works, how to treat staff fairly and not unlawfully discriminate, and the need to comply with your data protection obligations, such as keeping the employee’s personal information safe and secure. See Records and staff data for how you must handle the personal information of your staff members. Training staff will be particularly important if you are using new technologies to conduct performance reviews remotely for the first time during the COVID-19 pandemic (eg by video conference). 

 

5. Choose a suitable date to implement your scheme

A new system of performance management that affects pay will normally coincide with your business’s tax year. This will make it easier to calculate the implications of any changes in pay.

 

 

How do I prepare for a performance review or appraisal?

Most companies provide annual performance reviews or appraisals to reflect on the work the employee has done over the last year, although it is sensible to have regular informal meetings throughout the year to discuss progress and to avoid any surprises at the annual review.

To prepare for a performance review/appraisal meeting, ACAS recommends you do the following:

  1. arrange for the meeting to be held by the employee’s line manager, since they will have the most knowledge of the employee’s performance;
  2. give the employee adequate notice of the date and time of the appraisal meeting;
  3. ask the employee to complete a personal development appraisal form in advance of the meeting (you can use our performance review template);
  4. consider confidentially gathering the thoughts of others in the organisation with whom the employee works closely;
  5. review any records that have been taken to track the employee’s performance throughout the year;
  6. set aside time to conduct the interview and hold it somewhere you will not be interrupted; and
  7. if the staff member has a disability, make any reasonable adjustments necessary in order to allow them to attend and/or participate in the meeting (for example, you may need to provide documentation in large print for someone with a visual impairment or hold the meeting at the employee’s home if the employee is unable to get into the office).

 

How do I conduct a performance review or appraisal?

ACAS recommends that you bear in mind the following points when conducting the performance review or appraisal meeting:

1. Open by explaining the purpose of the meeting and begin with positive feedback, emphasising things the employee has done well and asking the employee how they think they can continue their good work.

2. Do not avoid any issues with the employee’s performance; address these during the appraisal meeting. If the problems are serious and you cannot resolve them informally, you will need to deal with them according to your disciplinary procedures (see Taking disciplinary action for information about this). You must ensure that you treat your staff equally in their appraisal meetings (ie judge them by the same criteria) to avoid any claims of discrimination (eg if some staff are treated more harshly than others).

3. Avoid leading questions or simple yes/no style questions; instead use open questions to invite the employee to elaborate on their answers. An appraisal is an opportunity for the employee to discuss their development needs openly, so encourage them to suggest ways that they could improve their performance, rather than trying to dictate to them.

4. Review the employee’s performance against their personal development appraisal form by assessing:

    • how well they have met their objectives;
    • how well they have demonstrated the behaviours or competencies expected of them; and
    • how they have progressed in their professional development.

Set future objectives and development needs and record your assessment and future objectives on the employee’s personal development appraisal form (you can use our performance review template).

5. After the meeting, send the final form to your employee to make sure they are happy with the content and for their signature. It is also helpful to have a more senior manager countersign the form after the appraisal meeting, to ensure that appraisals are being conducted in a consistent manner.

 

You should keep a record of the meeting; see Records and staff data for information about your data protection obligations when keeping records about your staff.

 

Performance review records 

 

What records should I keep about a staff member’s performance?

It is sensible for both you and the staff member to keep records of their achievements and development. You can each record examples, which you should then discuss with the staff member at a performance review meeting.

You must bear in mind your data protection obligations when keeping records of staff performance. You will generally have a legitimate interest in keeping such performance records (ie to maintain an effective workforce and enable your staff to develop), but you must make sure that you have identified the reason for keeping the information, and do not retain the records for longer than necessary (eg after the staff member has left the company). For further information on what you must do when storing staff records and how long you can keep them, see Records and staff data.

 

For more information about performance management, Sparqa Legal has extensive guidance on both managing staff performance and offering staff development opportunities and incentives, including a template letter you can use to confirm a promotion.

 

The content in this article is up to date at the date of publishing. The information provided is intended only for information purposes, and is not for the purpose of providing legal advice. Sparqa Legal’s Terms of Use apply.