Appraising employees

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Although there is no regulatory obligation to conduct appraisals with your employees, they may well prove to be a valuable tool as we move into FSA regulation next year. From 14 January 2005 you will need to comply with the Training and Competency rules (TC) and so, for individuals dealing with private customers, you will need to ‘determine the training needs of those employees and organise appropriate training to address those needs’ (TC 2.3.1 R). You will also need to ‘make appropriate records to demonstrate compliance with the rules’ (TC 2.8.1 R). An appraisal can assist you in formally and constructively reviewing competency and performance.

But aside from the FSA, conducting regular and effective appraisals can reward you with a number of advantages:

• They can provide you with a valuable insight into the work being carried out by each individual which will enable you to determine whether the allocation of your resources is being dedicated to the right areas for productivity.
• You will identify peoples’ 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.
• You 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 give you 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 their line manager have a good understanding of expectations and performance against those expectations…….and this need not be just one way. As Managers we can all learn something about the way we manage from our teams …if we are brave enough!

Considering there are so many benefits to conducting appraisals, what prevents us from making them part of our organisational culture? Time, or rather lack of it, can be an influencing factor and one I am sure we can all relate to. However the FSA rules (already mentioned) mean we will have to set time aside to review and evaluate performance in order to ensure competency is maintained. So we have two options; we get a blank sheet of paper and put on our thinking hats, or we use a well known review and evaluation process called a ‘performance appraisal’.

Where to start.

Consider 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 (i.e. their 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.

Why would you, as Principal/Director, want to appraise your commercial account executive who reports to the commercial manager? How could you offer feedback on their day to day performance, offering specific examples on where they have done something well or not, as the case may be? Would you want to be involved in agreeing objectives and goals when you have 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.

But, as the Approved Person responsible for the business and compliance of FSA rules should you know what is going on? Yes, of course you should. But an appraisal is not necessarily the best way of achieving this. If you want to know how individuals are performing arrange a post appraisal briefing session with the managers conducting the appraisals. If you want to speak directly to your employees arrange separate one to one meetings, with a clear agenda and purpose for what you want to achieve.

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

Pre-appraisal planning

Give the individual the opportunity to consider how they have performed before the meeting takes place. Ask them to complete a ‘pre-appraisal questionnaire’ which will assist them to focus on the relevant aspects that will be covered during the appraisal meeting.

As line manager you should also complete the same questionnaire by way of considering how well you feel they have performed.

The questionnaires will form the basis and structure of the meeting and so should include areas such as;

• 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 (i.e. training records, online assessment results, 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 (i.e. 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.

Preparation is significant to ensuring the appraisal meeting is focused, relevant and constructive.

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

Individuals are just that which means we have our own ways of working, our own ideas and our 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.

This article was written by Elizabeth Mills, Director, Broker Network
An edited version of this article was published in Insurance Times