How to run an employee appraisal for UK employers?

A well-run employee appraisal gives employers a structured opportunity to review performance, recognise achievements, identify development needs and agree objectives for the future. Rather than treating the process as a once-a-year formality, employers can use regular performance conversations to keep employees aligned with expectations and address potential issues early.

An effective performance review should be based on specific examples and evidence, while giving employees the opportunity to discuss their own achievements, challenges and development goals. Depending on the business, the process may also include a self-assessment performance review, feedback from colleagues or a 360 performance review to build a broader picture of performance.

For UK employers, there is no general legal requirement to conduct formal appraisals at a specific frequency, although regular reviews and at least an annual review are recognised as good practice. Where an appraisal identifies ongoing performance concerns, employers should also consider appropriate support and follow a fair process when managing capability or conduct issues.

What is an employee appraisal, and why does it matter?

An employee appraisal, also called a performance review or performance appraisal, is a structured discussion between an employee and their manager about performance over a defined period. It can cover achievements, challenges, development needs, career aspirations and objectives for the future. Employers should use regular performance reviews to discuss what employees are doing well, where they can improve, and whether they need additional support or training.

An effective performance appraisal system should therefore do more than assign a rating. It should focus on performance management, creating a consistent process for reviewing it, recording agreed actions and revisiting objectives. While the format can vary between organisations, regular reviews can help managers identify issues early and give employees clearer opportunities to improve and develop.

Are employee appraisals legally required in the UK?

There is no general statutory requirement for UK employers to hold a formal employee appraisal at a specific frequency. However, regular performance reviews for employees can be helpful, especially if conducted at least once a year as good practice. Employers should also follow any appraisal or capability procedures included in their own policies and contracts.

The legal risk usually arises not from failing to hold an appraisal itself, but from how an employer manages performance, capability, conduct or dismissal. Where problems with an employee’s performance could eventually lead to formal action, employers should keep appropriate records, provide employees with support to improve and follow a fair procedure.

What should an employee appraisal cover?

A useful employee performance review should cover the employee's achievements against agreed objectives, examples of successful work, areas where performance could improve, training or development needs, career aspirations and objectives for the next review period. Managers should focus on evidence and specific behaviours or outcomes rather than vague judgements about personality or attitude.

📌Example: To conduct an employee appraisal, instead of writing “You need to be more organised”, a manager could say: “Three project deadlines were missed this quarter. Let's discuss what affected delivery and agree on practical steps to improve planning for the next quarter.” 

How should employers prepare for an employee appraisal?

Preparation is one of the most important stages if you’re wondering how to run an employee appraisal. Before the meeting, managers should review the employee's objectives, previous feedback, relevant performance data and any agreed development actions. The aim is to enter the conversation with specific evidence rather than relying on recent events or personal impressions.

Employers should also give employees enough information to prepare. This could include the topics to be discussed, the review period being assessed and any documents or self-assessment forms they should complete. A consistent employee performance review helps employees understand what is expected and makes it easier to compare progress over time.

Should employees complete a self-assessment performance review?

A self-assessment performance review can give employees an opportunity to reflect on their own achievements, challenges and development needs before meeting their manager. This can make the discussion more balanced and help managers understand how employees view their own performance.

Employers can use a self-evaluation performance review as one source of evidence rather than treating it as a formal rating on its own. For example, an employee may identify a development need that their manager had not previously considered, creating an opportunity to discuss training or mentoring during the appraisal.

Should employers use a 360-degree performance review?

A 360-degree performance review gathers feedback from multiple perspectives, which might include managers, colleagues, direct reports or other people who work closely with the employee. It can provide a broader picture of workplace behaviours and collaboration than manager feedback alone. However, employers should make sure feedback is relevant, fair and supported by evidence. A 360 review should complement, rather than automatically replace, the manager's overall assessment. This is particularly important when an appraisal could influence formal performance action or other significant employment decisions.

⚠️Warning: Do not use anonymous or subjective feedback as the sole basis for a formal capability decision. Where performance concerns arise, employers should keep appropriate evidence and give the employee a fair opportunity to respond and improve. 

How should managers conduct the performance review meeting?

The appraisal meeting should be a two-way conversation rather than a manager delivering a list of criticisms. A strong performance review allows employees to discuss achievements and challenges while giving managers the opportunity to provide clear, evidence-based feedback.

Managers can begin by discussing what has gone well before moving into areas for improvement. Questions such as “What achievement are you most proud of?” or “What has made it harder to meet this objective?” encourage employees to contribute to the discussion and can uncover issues that may not be visible from performance data alone.

What are good performance review examples?

Good performance review examples are specific, evidence-based and focused on outcomes or behaviours. For example: “You completed the client migration two weeks ahead of schedule and received positive feedback from the project team. How could we build on this success in your next project?”

For improvement feedback, managers should describe the issue clearly and focus on what can be changed. An example might be: “Four reports were submitted after the agreed deadline during the last quarter. Let's discuss what caused the delays and what support or changes could help you meet future deadlines.” This is more actionable than saying an employee is “unreliable”.

How should managers discuss development and career goals?

An appraisal is also an opportunity to discuss training, skills development and future career objectives. Managers can ask employees which skills they want to strengthen and identify practical support, such as coaching, mentoring or training.

The discussion should result in clear actions where possible. For example, if an employee wants to develop project management skills, the agreed action could be to complete specific training and lead a defined project before the next review. This turns a general career conversation into a measurable development objective.

How should employers set objectives after an appraisal?

The final stage of the meeting should turn feedback into practical next steps. Employers can agree on objectives that are specific, measurable, achievable, relevant and time-bound, often known as SMART goals. Each objective should make clear what the employee needs to achieve and when progress will be reviewed.

For example, instead of setting a goal to “improve customer service”, an employer could agree: “Increase the average customer satisfaction score from the current baseline to the agreed target by the end of Q4, with monthly progress checks.” The exact target should reflect the employee's role and the organisation's existing performance measures.

What are good performance appraisal examples?

Useful performance appraisal examples should connect an employee's performance to measurable outcomes or clearly observed behaviours. Examples might include completing projects against agreed deadlines, improving customer satisfaction, reducing processing errors or developing a specific professional skill.

Employers should avoid setting objectives that are impossible to measure or that depend entirely on factors outside the employee's control. A strong employee evaluation example should make it clear what success looks like, what support is available and when the objective will be reviewed.

Should salary be discussed during an employee appraisal?

Employers may choose to discuss salary progression or performance-related pay alongside an appraisal, but the approach should be clear and fair. Decisions about performance-related pay should be fair and objective, and employers must avoid less favourable treatment because of a protected characteristic.

If pay is linked to performance, employers should explain how decisions are made and apply the criteria consistently. A performance appraisal system that combines subjective ratings with unclear pay decisions can create concerns about fairness and potentially increase discrimination risk.

How should employers manage poor performance after an appraisal?

An appraisal can identify performance concerns, but employers should distinguish between a capability issue and a conduct issue. A capability issue relates to an employee's ability to do their job, while conduct concerns relate to behaviour. The distinction matters because the appropriate management process can differ. Where an employee is struggling with capability, employers should first investigate the reasons and consider appropriate support, such as training, coaching or mentoring. 

⚠️Warning: When undertaking capability and performance reviews, when someone is disabled, you must ensure reasonable adjustments are in place before taking formal action. Some examples might be adjusting shift patterns, allowing more time for written tasks or providing specialist equipment.

When should an employer use a performance improvement plan?

If informal support does not resolve a performance issue, an employer may consider a performance improvement plan (PIP). ACAS says a PIP should set out specific objectives, a reasonable timeline for improvement and any further support or training required. Employers should discuss the plan with the employee and provide a written record.

For example, a PIP might require an employee to meet agreed project deadlines consistently over the next three months, with fortnightly check-ins and additional training on project planning. The plan should also explain what may happen if the required improvement is not achieved.

Can appraisal records be used as evidence of poor performance?

Records of regular, fair performance reviews can form part of the evidence used to demonstrate ongoing performance concerns. It can be helpful to identify performance reviews, PIPs and complaints from colleagues or customers as examples of evidence that may be relevant when managing capability issues.

However, employers should not assume that a low appraisal rating automatically justifies dismissal. Where dismissal for capability or conduct is being considered, employers should have evidence of poor performance and the steps taken to support improvement, and they must follow a fair procedure.

How can employers improve their performance appraisal system?

A consistent performance appraisal system should make it easy to prepare, conduct and record reviews while keeping performance discussions connected to the wider employee experience. Employers should review whether their process is producing useful feedback, whether objectives are being followed up and whether employees understand how performance is assessed.

An online performance appraisal system can help centralise review templates, objectives, feedback and records. Digital tools can also support reminders and consistent workflows, reducing the administrative burden of running reviews across larger teams.

How often should employers conduct performance reviews?

Employers should conduct regular performance reviews for employees at least once a year as a good starting point. However, businesses may choose to combine an annual formal appraisal with more frequent one-to-ones or quarterly check-ins, depending on the role and organisation.

A more frequent approach can be particularly useful when employees are new to a role, working towards short-term objectives or receiving additional support following a performance concern. The key is to make the frequency consistent enough that employees understand when and how performance will be reviewed.

How can employers make employee reviews more consistent?

Employers can improve consistency by using standard appraisal templates, clear performance criteria and documented objectives. Managers should also receive guidance on giving evidence-based feedback and handling difficult conversations. Consistency does not mean every employee receives identical objectives; it means that comparable roles are assessed using fair, transparent and relevant criteria.

💡 Good to know: Review your performance appraisal system periodically. If managers regularly skip follow-up meetings, employees do not understand how ratings are determined, or objectives are rarely revisited, the process may need to be simplified or redesigned. 

What should employers do after an employee appraisal?

The appraisal should not be the end of the performance management process. After the meeting, managers should record the key points discussed, confirm agreed objectives and identify any training, development or support actions. Employees should understand what happens next and when progress will be reviewed.

Regular follow-up meetings can help employers identify progress early and address problems before they become more difficult to manage. Where a performance issue remains unresolved, keeping accurate records of discussions, objectives and support can also help demonstrate the steps taken to assist the employee.

How should employers follow up after a performance review?

Managers should agree on a clear date for the next check-in and review progress against the objectives set during the employee performance review. If an employee needs training, mentoring or other support, the manager should confirm who is responsible for arranging it and when it will happen.

This creates a continuous cycle: review performance, agree objectives, provide support, monitor progress and review again. Over time, this approach can make performance appraisals a practical part of performance management rather than an isolated annual exercise.

What are the most common employee appraisal mistakes?

Common mistakes include:

• Relying on vague feedback

• Focusing only on recent events

• Failing to document agreed actions

• Setting unclear objectives

• Treating the appraisal as a one-way conversation.

Employers should also avoid allowing personal opinions or irrelevant characteristics to influence performance decisions.

An employee appraisal should be the starting point for continued performance conversations, not the end of the process. After the meeting, managers should record the key points discussed, confirm agreed objectives and development actions, and set a clear date to review progress. Employers should also assess whether their current performance appraisal system gives managers a consistent framework for preparing, conducting and following up on reviews.

If an appraisal identifies a performance concern, employers should first establish why the employee is struggling and consider whether additional training, coaching, clearer objectives or other support could help. Where performance does not improve, a performance improvement plan can set out specific objectives, a reasonable timeframe and the support available. Employers should also consider whether reasonable adjustments are needed if a disability is affecting performance.

For businesses looking to make the process more consistent, an online performance appraisal system can help centralise objectives, feedback and review records while giving managers a structured process to follow. The goal is to turn appraisal conversations into an ongoing approach to performance management, employee development and early intervention when issues arise.

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