A Better Understanding Of Employee Performance Appraisals

Employee Performance Appraisals
Employee Performance Appraisals

Employee performance appraisals, also known as performance reviews or evaluations, are systematic processes used by organizations to assess and evaluate employees’ performance and contributions. Performance appraisals are used to provide feedback, set goals, identify areas for improvement, and make decisions related to rewards, promotions, and training.

Job analysis information obtained serves as a foundation for HR functions, such as recruitment, selection, training, performance management, and compensation.

Here are some key aspects to help you understand employee performance appraisals:

1. Objective Setting
2. Performance Measurement
3. Feedback and Coaching
4. Two-way Communication
5. Performance Rating or Ranking
6. Development and Training
7. Performance Improvement Plans
8. Rewards and Recognition
key aspects employee performance appraisal

Objective Setting

Performance appraisals often involve setting objectives or goals for employees. These objectives should be specific, measurable, attainable, relevant, and time-bound (SMART). Clear objectives help employees understand what is expected of them and provide a basis for evaluating their performance.

Performance Measurement

Appraisals measure employees’ performance against predefined criteria. These criteria can include key performance indicators (KPIs), job competencies, behavioral expectations, and organizational values. Measurement can be quantitative (e.g., sales targets achieved) or qualitative (e.g., communication skills).

Feedback and Coaching

Feedback is crucial to performance appraisals. Managers provide constructive feedback to employees, highlighting their strengths and areas for improvement. Effective feedback focuses on specific behaviors, avoids personal criticism, and offers development suggestions. Coaching may be provided to help employees enhance their skills and overcome challenges.

Two-Way Communication

Performance appraisals should encourage two-way communication between managers and employees. Employees should have the opportunity to share their perspectives, provide self-assessments, and discuss their career aspirations. This dialogue fosters engagement, improves understanding, and strengthens the working relationship.

Performance Rating or Ranking

Many organizations assign performance ratings or rankings to employees based on performance appraisal results. These ratings can be numerical (e.g., on a scale of 1 to 5) or descriptive (e.g., exceeds expectations, meets expectations, needs improvement). Ratings help make decisions related to rewards, promotions, and identifying high-potential employees.

Development and Training

Performance appraisals provide insights into employees’ development needs. Based on appraisal results, organizations can identify skill gaps and provide training and development opportunities. This helps employees enhance their capabilities and contribute more effectively to the organization.

Performance Improvement Plans

In cases where an employee’s performance is consistently below expectations, performance appraisals may result in performance improvement plans (PIPs). PIPs outline specific actions and timelines for employees to improve their performance. Regular follow-ups and support are provided to help employees succeed.

Rewards and Recognition

Performance appraisals often determine rewards and recognition for employees. High-performing individuals may be eligible for bonuses, salary increases, promotions, or other forms of recognition. Transparent and fair reward systems based on performance outcomes motivate employees to excel.


It’s worthwhile to note that performance appraisals should be conducted fairly, objectively, and consistently across the organization. Managers should receive appropriate training to conduct appraisals effectively and minimize biases. Regular feedback and ongoing performance discussions throughout the year are encouraged to maintain a continuous focus on employee development and improvement.

 By considering and implementing these aspects of employee performance appraisals, organizations can foster a culture of performance excellence. This will provide opportunities for employee growth and development, align individual and organizational goals, and ultimately drive overall success.

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  • Ram

    Ram, the author of "Business Development: Perspectives" on Amazon Kindle, has a wealth of experience in business development across multiple industries. He has over 30 years of experience in commodities, FMCG, and software industries, and has held various leadership positions in these sectors. In the commodities and FMCG industries, Ram served as GM of Business Development for southern India, where he successfully established new businesses and expanded existing ones. In the software industry, he was Regional Director of Business Development for Asia, where he was responsible for expanding the company's presence in the region. Ram has a proven track record of turning around loss-making ventures and establishing successful businesses. Ram has also served as the Director of Industry Partnerships and IT Blog editor at a software company, showcasing his expertise in technology and industry partnerships.

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