Performance Appraisal

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What is Performance Appraisal?

Appraisal is required in the growth of every sphere, hence also an employee need an appraisal system to keep a check on their work. This is a regular review system of an employee's job performance and their overall contribution to a company.


Performance appraisal also known as the annual review performance or evaluation of the employee, this evaluates an employee's skills, achievements, and growth - or lack in growth thereof.In this article, we will discuss performance appraisal in detail.


Performance Appraisal Overview

A performance appraisal is a review of an employee's job performance and his overall serving in a company. This appraisal is done annually or at different intervals. Organizations use performance appraisals, giving the employees a showcase of their work in a big-picture in the form of feedback, this justifies the increment in their pay scale and bonuses as well.


The appraisal report can be conducted at any given time but generally this tends to be annual, semi-annual, or even quarterly. Companies have a limited budget from which they award their increments and bonuses. Performance appraisals further help to determine how to allocate the funds. This appraisal system provides a way for the companies to determine which employees have contributed the maximum to the company’s growth.


Types of Performance Appraisal

Appropriate Appraisal methods for an organisation will largely depend on the variety of roles that is performed within the organisation, the time available to invest in the review process, and objectives for carrying out the reviews also matters for different organizations.

We also need to incorporate elements of methodology within the review system. Popular types of appraisal system are as follows:

  1. Straight Ranking Appraisals

  2. Grading

  3. Management by Objective

  4. Trait and Behavior Based Appraisals

  5. Behaviorally Anchored Rating Scale    

  6. 360 Degree Appraisals

360 Degree Appraisal

Organisations who focus on employee development use this 360-degree tool to analyse the performance and potentiality of the staff and this enables the employees to path their career based on the feedback received. Organisations usually perform this 360-degree feedback on an employee before a major decision about the professional's career.


The results from the 360-degree feedback are usually used by the person receiving the feedback to plan for the training and development. Results are also used by some organizations while making administrative decisions, such as pay hike or promotion strategies.


Employee Appraisal

An employee performance appraisal is a process that combines both the written and oral element. Here management evaluates and provides feedback on employee’s job performance.


These include steps to improve or redirect the activities as per needed. Documenting performance provides a basis to increase their pay and promotions. Appraisals are important to the staff members to improve their performance and provide an avenue by which they can be rewarded or recognized for a job well done.


The goals can be now easily realized if employee performance appraisal is processed. It fetches as the ultimate purpose for the betterment of all the parties. To create and also to maintain the framework, employers need to inform the workers about their value, appreciate them for their best works, also establish a track record for fair and honest feedback, that is to  be consistent in their treatment of all the employees, and  workers for their own check about their participation into the company's processes and operations.


Annual Performance Review

Successful annual performance appraisals have a thing in common that they are carefully planned and prepared for the employees as well as for the organization. Managers need to take time to carefully prepare the process of performance appraisal by gathering the information they need to effectively rate their employees' according to their performance. They can checklist the following for the preparation of appraisal report:

  1. Conduct the performance appraisal meeting.

  2. Set a comfortable environment for the meeting.

  3. Review and discuss the performance ratings.

  4. Discuss the performance on goals.

  5. Review and discuss all over parameters.

  6. Set goals for the coming year.

  7. Set development plans with the employees.

  8. Engage the employees in the discussion on their career aspirations.

  9. Finally complete the administrative paperwork.

Hence, we see how important the appraisal system is for an organization. This helps in the overall conduct of an employees’ performance in an organisation.

FAQ (Frequently Asked Questions)

1. What is the Importance for Performance Appraisal?

Ans. Performance appraisal allows initiates positive feedback as well as this identifies areas for the improvement. An employee here can discuss and even create a developmental plan with the manager so that he can enhance his skills. It motivates the employees if appraised by a good merit-based appraisal system.

2. What are the Limitations of Performance Appraisal?

Ans. Limitations are:

  1. Biasness of the Employer.

  2. Ambiguity in the standards.

  3. Several qualities of the appraisal are left unseen.

  4. Strict Appraisal System.

3. What is Management by Objective?

Ans. MBO or Management by Objective is a strategic approach that is to enhance the performance of an organisation. This is the process where the goals of the organisations are justified by the work and management by the members.