By evaluating the performance of your staff, you can ensure that both their individual goals and the collective ambitions of your company are being met.

However, finding a way of appraising your staff in a conclusive way can be easier said than done. We caught up with the businesses that have transformed appraisals for the benefit of all involved.

Traditionally, appraisals were a once-a-year, formal meeting – but modern companies are now looking to make these once nerve-wracking conversations into regular, informal and productive discussions.

Realising his business didn’t have consistent performance reviews in place, CEO Dez Derry from mmadigital reworked appraisals by first putting a transparent financial model in place. From this initial model, goals were broken down into daily, weekly, monthly and yearly targets, which were then used to form key performance indicators (KPIs) for both teams and employees. Using this method, each team had the same goal and the same metrics to measure performance consistently.

Since introducing this new method, Dez has noticed employees becoming more engaged and getting involved in a little friendly competition – all of which has led to the company’s turnover increasing. “It’s crucial to be fair and realistic when setting targets,” he said. “Setting unattainable goals is frustrating and disheartening. If you keep your team positive and motivated, your business will reap the rewards.”

After implementing a flexi-time model into data analysis business Consumer Intelligence, CEO and co-founder Ian Hughes found that staff were struggling with the changes. In response, he looked to Intel and Google for inspiration, and implemented the company’s very own OKR (objective and key results) system. OKRs link the work of each employee with a company’s overall strategic plan.

“We set an overall company objective for an upcoming quarter and then it cascades down to the employees,” Ian said of the OKR system. “Managers and staff together come up with individual objectives and key results.”

“All results are measurable, with a deadline and are discussed at 45-minute weekly evaluation check-ins and coaching sessions between management and staff. With OKRs, you are more accountable for your work and performance.”

The implementation has been beneficial for the business, with an uplift in gross margins and a more unified workforce. “We are seeing improved efficiency and effectiveness,” Ian added.

Today, there is greater recognition of staff wellbeing and the need to have a healthy work/life balance. For some companies, introducing an element of life away from work into an appraisal has been very beneficial, not just in terms of relationships but retention as well.

At Suresite, HR manager Janine Wilson wanted to prioritise checking in with staff’s wellbeing. “In today’s society, there’s a great awareness about the effects of mental health. As an employer, you need to know what’s going on in the personal lives of your staff and how that might affect their work,” she explained.

“In our new appraisals, we ask how everything’s going at home. We need to demonstrate that we can take action and help our employees, like granting more flexible hours for mums who are struggling to juggle the job and children,” Janine added. “This helps with retention, too. The employee won’t think they need to change their job just to get the help they need. If employers don’t tackle these issues, they will get left behind.”

Helen Jamieson, chief executive at Jaluch, agrees that there’s a link between making appraisals more personal and an increase in retention.

By adopting an agile appraisal system, Helen adapted the questions to be about issues that the company was currently facing. “It’s about people, not processes,” she said, emphasising the importance of asking how employees were feeling, how prepared they felt for change and what support they required.

“With a more engaged and discussion-based appraisal system, I can encourage employees to stay,” Helen explained. “Making changes to appraisals and performance management can be a big business benefit.”