How To Conduct Fair And Effective Employee Appraisals

Most organisations review employee performance annually to determine pay adjustments, promotions, training needs or, where necessary, terminations. Yet, for many employees, the thought of being "appraised" evokes anxiety or resentment, usually due to perceptions of unfairness. That’s unfortunate, because a well-structured appraisal process is one of the most objective ways to assess performance and reward merit.

For your appraisal system to function effectively, it must be seen by employees as fair, consistent and based on clear expectations.

Step 1: Building a Fair Appraisal Structure

One of the most overlooked obstacles to fairness is job creep — the gap between what’s written in the job description and what the employee actually does. If a supervisor is assessing performance based on outdated expectations, the entire process becomes flawed.

To ensure fairness:

• Maintain up-to-date job descriptions

• Clearly define performance expectations

• Explain how performance will be assessed

Using generic performance appraisal templates or off-the-shelf software is rarely sufficient. Instead, develop or customise tools that reflect the actual roles, responsibilities, and culture of your business.

Step 2: Creating a Fair Appraisal Report

Appraisal reports shouldn’t be based on what’s observed in the last few weeks before the review. That approach lacks perspective and fails to capture the employee’s true performance.

Instead:

• Record observations throughout the year

• Address issues as they arise, not just during review time

• Recognise good work early and often

Employees should also be told who will contribute to their review — whether it’s a supervisor, a peer, or a client. Feedback is only fair when it comes from someone who has directly observed the employee’s work.

Step 3: Conducting a Fair Performance Appraisal Interview

Train your appraisers. A manager who knows how to give objective feedback and conduct a review conversation professionally helps reduce perceived bias.

Best practices for fairness:

• Focus on behaviours and outcomes, not personality traits

• Ensure appraisers are trained to deliver constructive feedback

• Encourage two-way dialogue

Allowing employees to complete a self-assessment can also make the process fairer and more collaborative. It gives them the chance to explain challenges, highlight contributions, and suggest support that would help them improve.

Step 4: Implementing a Fair Performance Improvement Plan

The appraisal isn’t the end of the process, it’s a starting point. If barriers to performance are identified (e.g. outdated software, unclear procedures), leadership must commit to resolving them.

Failing to follow through is not just frustrating for the employee, it’s unfair. Support systems such as training, mentorship, or improved tools show that your business is serious about enabling success.

A Final Thought

At its best, a performance appraisal system isn’t about judgment, it’s about development. Done right, it motivates employees, supports career growth, and strengthens your entire organisation. The foundation? Fairness at every step.

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Disclaimer:

The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.