The Importance of Performance Appraisals

In January and February 2019 many NZ businesses will experience a spike in employee resignations.

If you watch TV you might have noticed that employment law advocates have already started to advertise to their target market of disgruntled, disillusioned and unhappy employees.  Typically, this type of advertising starts in January when these employees are dreading returning to work and are actively looking at taking their employee to task and seeking new employment opportunities.  I’m not sure why the advertising has started early this year but it has prompted me to highlight the benefits of Performance Appraisals and perhaps give a business the opportunity to save itself from a New Year’s employee resignation and personal grievance liability case.

We know that when managers create positive work environments, establish clear goals, communicate regularly and give honest timely feedback that employee’ performance is increased, performance issues are reduced and employees feel engaged. We also know that the cost of staff turnover can be as much as 200% of the employee’s annual salary/wage so establishing a Performance Appraisal policy today will improve your business and if you can conduct some appraisals this side of Christmas you may save yourself an issue in the New Year.

If you don’t have time to conduct appraisals before Christmas a casual chat with your employees may allow you to identify a disillusioned employee and schedule an appraisal for the New Year giving the employee a hope of a more positive start to 2019.


Conduct an initial Performance Appraisal at the 3-month anniversary of a new employee.  Review the success of the on-boarding process and identify any further training and support the employee may require.  Now that the employee has a working knowledge of the business review the targets and goals of the position and consult with the employee as to the regularity of the Performance Appraisals.  I recommend once or twice every 12-month period.  NB Performance Appraisals don’t necessarily go hand in hand with remuneration reviews but they can if you wish. 

Invite your employee to the appraisal preferably giving them a 1 week lead time.  Nominate a physical space that is private and where you will be uninterrupted by visits or phone calls. 

Give the employee a list of the points you wish to cover and respectfully pre-warn the employee if they are not meeting the positions targets and goals and offer them the opportunity to come prepared with some possible solutions.  It is important to be clear that this is not a disciplinary meeting but rather an opportunity to review and seek solutions to any issues. 

Some discussion ideas:

  • How well do they think they’re doing in their job?

  • Which parts of the job do they think they are doing well and where do they think they could improve?

  • Do they need any equipment or training to help in their role?

  • How do they feel about their job and the company?

  • What would they change if they could?

 Do some preparation for the meeting.

  • Review the employee’s job description.

  • Review the position’s targets and goals and assess the employee’s performance.

  • Get feedback from their colleagues and customers as to their performance and “fit” in the business.

  • Review any notes from previous reviews