Using appraisals and mentoring to improve business performance

Appraisals can be one of the most powerful tools for developing staff, building teams and highlighting training needs. Mentoring is another excellent method of developing potential at all levels. Done well, both can be good ways to develop and motivate your staff – this guide will help you to make the most of the opportunities they offer.

What is an appraisal?

An appraisal looks at past and current activity with the aim of improving an individual’s future performance as well as the business as a whole. They are a review of the person rather than the tasks an employee has performed, and so focus on all aspects of their job, personal skills, training needs and career development.

They are also an opportunity for employees to talk about themselves, their problems and their hopes. They are not just a moment for managers to criticise them or talk about the business.

The role of the appraiser is to establish what motivates someone and to look at positive steps that can be taken to develop a person. The aim is two-fold: to get the most from employees and to help them get more from their careers.

The appraiser leads the process by asking structured questions and listening to the answers, while keeping notes. The tone should be constructive rather than critical. The employee should do most of the talking and they should be done at a time and place when there will not be interruptions.

Areas of review

The first part of the appraisal looks at the person’s strengths, weaknesses and ambitions. Where do they see they fit in to the business? How do they want to grow? Questions for an employee to consider could include: 

• What do you feel are your main achievements since the last appraisal/you started?
• What strengths do you think you have shown in these?
• What things do you feel you have not achieved satisfactorily?
• What constraints, obstacles and difficulties have you encountered in your work?
• What do you feel are your main weaknesses in work? How do you think you can best address these?
• What suggestions do you have for improving the way in which your job is done?
• How would you like to develop your strengths and abilities?
• What guidance or help would you like?
• What targets/standards do you plan for the next six months?

Standardise the approach

It may be better to create a standard appraisal form with these questions and space for written answers. This has several benefits:

• It highlights the formality of the appraisal process, underlines how seriously you take it, and ensures your approach is consistent.
• It gives appraisees the chance to consider the questions in advance so there is more honesty and more time to discuss solutions. 
• It ensures the appraisee gets their viewpoint across.

Improving performance

The second part of the appraisal looks at how the job might be done better. Six key areas for review could include:

1. Activities
   
   It helps to review and discuss activities in turn, with the emphasis being on the priorities of the role. This process may reveal that some less important tasks are demanding too much time. 
2. Task allocation
   
   The reason why one person handles a task is often historic. You may want to re-allocate work according to people’s strengths, or to give them the opportunity to develop. 
3. Time
   
   Time management is particularly important in a smaller business. Reducing the time taken to carry out routine tasks may bring significant overall improvements. You should also consider overlap with tasks carried out by other people and whether rescheduling the time of day that they are carried out would improve effectiveness.
4. Communication
   
   Does the employee communicate effectively with their peers, seniors and subordinates? For instance, are there frequent misunderstandings? Could these be reduced?
   
   It is often helpful to obtain feedback from the other members of staff who have regular contact with them, in order to get a fuller picture of how someone works.
5. Skills improvement
   
   This concentrates on two areas: what progress the employee has made in improving their skills, and which skills could be further improved.
   
   Possible training should be discussed and agreed, as should training for any areas that the employee would like to move into in the future. Learning appropriate new skills keeps people on their toes, their interest high and your business at the top.
6. Work patterns
   
   With increasing techniques for flexible working, some people may want to consider a different work pattern such as teleworking, part-time, or job sharing. It may be better to accommodate people in this way rather than lose a good staff member altogether.

The output

What should you get out of an appraisal? Initially, some ideas and intentions that should then be written down. Then both parties need to agree an action plan for the ones you intend to take further. This simply states who will do what and by when.

That vision and commitment to action will increase the likelihood of improvement.

What is mentoring?

There is another way of developing people that can be used in conjunction with appraisals. That is to find another person (in or out of the organisation) to act as a mentor. This can also help if you are a solo operator; where you can work with someone outside your business who has been through, or is going through, similar experiences. It is a less formal and a more ongoing process than appraising.

The mentor’s role is to help build confidence and reduce uncertainty. It is also to help an individual tackle various issues but without making decisions for them. The key is to establish a basis of trust and confidentiality. However, unlike an appraiser, the mentoring relationship explores and confronts both business and personal issues.

A mentor is an experienced and empathetic person whose role is to help people develop skills and learn more from their experiences. They also act as a sounding board.

Mentoring in practice

Mentoring should involve meeting regularly to help identify, explore and define any problems or issues. The mentor’s role is also to raise the potential implications of any possible solutions. An action plan can also be developed so that progress is maintained and monitored.

The mentor needs to be someone competent that the mentee respects. There may be some difficult personal issues that will need to be addressed, so the mentee must feel comfortable with their mentor and trust their discretion. Mentoring recognises an individual is capable of resolving most problems for themselves and simply needs a person to bounce ideas off.

In smaller businesses a mentor can act as a critical friend – challenging ideas and assumptions impartially and helping the business owner see things in a different light. They can help mentees face issues and weaknesses they would prefer to ignore. They can boost confidence and lift morale. A vital role of a mentor is also to inspire, to encourage a vision and to make people alive to the possibilities of success.

Mentoring can often be used to accelerate someone’s integration into a new role. A new recruit learns how things are done, how they can make best use of their strengths, and what new skills they need to develop to perform their new role effectively. Mentors can give constructive advice and feedback that may not be possible from their direct manager. Finally, they can also act as long-term role models.

Tips for working with a mentor

• Be prepared to challenge and be challenged.
• Ask potential mentors about their background – what have they done themselves? Can they relate to your situation? What experience or formal training have they had in mentoring?
• Request and follow up references. Questions to ask of referees include: how has the mentor helped your business? Are they easy to work with? How do they handle problems? Do they just listen, advise and inspire, or do they try to get involved? Are they easy to get hold of? 
• What frequency and type of meeting does your mentor suggest? Does this fit with your needs?
• Ensure that your prospective mentor has sufficient time for regular contact and face-to-face meetings. 
• Where will face-to-face meetings take place? Meeting in a restaurant or pub may help to create a more open and relaxed meeting.
• Keep your appointments. Self-discipline to follow through is essential but can be encouraged by a good mentor!
• Good mentors will provide supportive and encouraging feedback, but they will always ask you to take responsibility for your decisions.
• Though it may sometimes be tempting, don’t let them become actively involved in your business or you will impair the relationship.
• Never ask your mentor to act on your behalf. First, that breaches your confidential relationship and, second, it puts them in a possibly awkward position with the third party. Anyway, the point is that they give you the confidence to speak for yourself. However, there is no reason why they can’t refer you to some of their contacts, of which a good mentor has many.
• If you are using an external mentor, what will it cost? If you know exactly what you want from the process and can find someone who wishes to build up their own mentoring expertise, you may be able to get input for free. Accountants charge upwards of £40 an hour, tele-coaches from £50 an hour. 

Useful contacts

The International Coaching Directory  

W: www.coachreferral.com

The European Mentoring & Coaching Centre 

T: 07000 234683 
W: www.emccouncil.org

Some Business Links provide mentors: 

Business Link (England) 

T: 0845 600 9006 
W: www.businesslink.gov.uk

Business Connect (Wales) 

T: 08457 969798 

Highlands & Islands Enterprise 

T: 01463 234 171 
W: www.hie.co.uk

Scottish Enterprise 

T: 0845 607 8787 
W: www.scottish-enterprise.com

Lloyds TSB Commercial is a trading name of Lloyds TSB Bank plc and Lloyds TSB Scotland plc and serves customers with an annual turnover of up to £15m.

Our service promise
We aim to provide the highest level of customer service possible. However, if you experience a problem we will always seek to resolve this as quickly and efficiently as possible. You can request a copy of our ‘How to voice your concerns’ leaflet from your business team or any branch. Our complaint procedures can also be found on our Contact us page.

While all reasonable care has been taken to ensure that the information in this business guide is accurate, no liability is accepted by Lloyds TSB for any loss or damage caused to any person relying on any statement or omission in this business guide. This business guide is provided for information only and should not be relied on as offering advice for any set of circumstances and specific advice should always be sought in each instance.

When using these services your agreement will be with the relevant third party and their terms and conditions will apply. Lloyds TSB shall not be responsible or liable to you for any failure by the third party to provide these services or in relation to use by the third party of any confidential information supplied to them by you.

Please contact your business team or branch if you’d like this in Braille, large print or on audio tape.

We accept calls made through RNID Typetalk.

Calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help improve our quality of service.

Lloyds TSB Bank plc Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065. Telephone: 020 7626 1500.

Lloyds TSB Scotland plc Registered office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Registered in Scotland no. 95237.
Telephone: 0131 225 4555.

Authorised and regulated by the Financial Services Authority and signatories to the Banking Codes.