There are a number of reasons that companies should be conducting regular performance appraisals with their staff; they show your staff that they are valued, they give you the chance to refocus and they provide you with an opportunity to assess the needs of your employees are to name but a few.

However, whilst the annual/quarterly/monthly review has always been a ubiquitous fixture in the world of work, are all companies following suit? Of late there have been a few high profile cases where companies have rejected traditional performance management techniques and statistics from CEB Global definitely justify why. It was found that 59% of employees feel that performance reviews aren’t worth the time that they invest in them, and it’s no wonder when a massive 56% reported that they don’t receive any feedback on what they should improve.

So is the appraisal process really dying a death or do SME’s still see the value that an effective and well executed appraisal process can have on people management?

A recent survey from breatheHR which looked into the way that SME’s manage their HR processes has found that the majority (86%) of small businesses still have an appraisal process in place. Unsurprisingly, 50% of smaller companies, of up to 10 employees, don’t have a process in place at all. This is consistent with previous findings, as 88% of businesses of this size only spend between 1 to 10 hours per week on their HR processes. Equally, it’s understandable that as companies increase in size, the likelihood of them having an appraisal process in place also increases. This could be down to the fact that they have more team members to manage and there is a higher need to implement formal structures to manage their staff performance.


The survey findings mapped those who have an appraisals process against the reported person who manages the HR process within that company. The results show that when an HR professional is involved with the company, be that internal or outsourced, it is more likely that the company will have an appraisal process in place. However, when either a PA, Office Manager or Finance Manager are responsible for managing the businesses HR, only 79% implement an appraisal process.


Knowing whether a company has an appraisal process in place is one thing, ensuring that it is carried out is something else entirely. Of those surveyed, a promising 54% said that staff appraisal and objectives processes are used by all of the teams in their business. It is obvious from the graph below that initially embedding an appraisals process throughout a smaller company is a problem. It will always be a challenge to enforce a consistent and high standard of staff assessment throughout a company. This is flagged up by the fact that a few teams use an appraisal process in 11% of SMEs and most teams use them in 25% of small businesses.


These findings from breatheHR show that there is still life the appraisal process yet, especially amongst small businesses, with 86% of SMEs having an appraisal process in place. What is apparent is that not all businesses consistently implement this across the entire organisation. This suggests that the majority of companies realise the importance of an appraisal process as a key HR function, but may not necessarily have the skills or time to action it consistently.

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About The Author

Mel is the Digital Marketing Manager at breatheHR. She regularly contributes insights into current SME and HR trends as well as reporting on breatheHR news and updates.