As a business owner, your managers look to you for guidance on writing annual appraisals for their employees. Often this is done to assess eligibility for raises, but it is also a tool to improve employee performance and bring about improvements in the overall organizational operations. Preparation for the annual evaluation should begin early in the year, preferably just after the previous appraisal. Keep records during the year of employees' accomplishments and issues so that all of these areas can be accurately and objectively addressed.

Stick to the Facts

Set a standard of using facts, statistics and verifiable information in your company's appraisals. Emotions don't belong in the written reports. Whether the employee has done an excellent job, a poor job or something in the middle, the assessment has to be based on objective data. This protects you and your business from potential accusations of bias or discrimination, and it carries more weight as a true appraisal of the employee's performance. For example, instead of saying that John is a wonderful employee, detail his accomplishments in winning back a disgruntled customer or saving the company money by securing a new vendor.

Review Goals

Your employee's accomplishments should be gauged against his goals. Use the appraisal to restate the goals that were agreed upon the previous year, then describe the employee's successes or failures in completing the goals. Begin with the positive and, again, use specific details that can be verified. Review the records you have kept throughout the year, such as reports and communications, to determine whether each goal was met.

Address Issues

If an employee isn't meeting his goals or performing satisfactorily, don't wait until the year-end appraisal to address the situation. Instead, the year-end appraisal should summarize and reinforce previous discussions, detailing the necessary steps for the employee to improve his performance. You and your managers must provide constructive feedback to help him understand the problem and the consequence. For example, if the employee has been late for work, the appraisal should reference past conversations or warnings about how tardiness affects the company's operations.

Plan for the Next Year

The year-end appraisal should review the previous year's performance and also plan for the coming year. Create an appraisal form with a space to add new goals that the employee should work toward, particularly if there are areas that need improvement. Suggest ideas for the employee to pursue, such as additional training opportunities. Written appraisals should also include an area for the employee to provide feedback on the content of the assessment.