What is a Performance Appraisal?

Estimated reading time: 3 mins

It’s a process where a manager (or specialist appraiser) analyzes and evaluates an employee’s work behaviors, by comparing them with pre-agreed standards/targets, documents the results of the analysis, and then uses the results to provide feedback to the employee to identify improvements, and why they are required. They’re also used to determine what training is required by an employee, and if they’re suitable for promotion, demotion, retention, or to be fired (hopefully not!)

A performance appraisal is a review, and discussion, of an employee’s performance of duties and responsibilities, as assigned to them in their job specification and previous appraisals. The appraisal is based on results measured by the employee in their job. It is NOT intended to appraise the employee’s personality characteristics.

The appraisal measures skills and achievements fairly, consistently and accurately. The process provides a means to help identify areas for performance improvement and to promote professional growth.

The process should not consider only the supervisor’s opinions and conclusions, but also those of superiors, subordinates and colleagues (these are known as 360-degree appraisals.)

An ongoing process of appraisal and feedback makes the process easier and simpler to conduct. An appraisal shouldn’t surprise employer and employee!

Each employee is entitled to a thoroughly considered appraisal. The success of the process depends on the manager’s willingness to be thoughtful, constructive and objective throughout the appraisal, and also on the employee’s willingness to be responsive to constructive suggestions and to collaborate with the manager to achieve agreed goals.

Why Appraise Performance?

A considered appraisal will stimulate employee’s interest and improve job performance. Periodic reviews help manager’s get a better understanding of each employee’s abilities and achievements. The objective of the appraisal process is to recognize achievement, evaluate job progress, and to identify further training for the development of skills and strengths. The appraisal provides the employee, the manager, executives, and Human Resources an important formal feedback mechanism on an regular basis.

The appraisal process aims to:

  • enhance work quality, efficiency and effectiveness of the individual by constructive feedback and ongoing professional development
  • achieve joint agreement on the priorities and focus in the future
  • encourage commitment to planned objectives
  • reach alignment of the individual’s work activities with the strategic vision of the company
  • increase job satisfaction through the setting of new challenges and the recognition of achievements at work
  • clarify performance measurement and expectations, including standards, roles, responsibilities, policies and protocols
  • reflect on events, experiences and achievements so the lessons are learned and outcomes repeated

Setting Goals, Together

The appraisal process starts with a manager and employee setting goals for the future together. The most effective goals are measurable and have easy to understand performance standards – they are S.M.A.R.T.

Regular Feedback

Regular, informal feedback should also be given to employees about specific achievements and learning progress. A half-yearly meeting (typically) is used to review achievements, identify performance issues and plan any further development needs.

Determining Skill Gaps

Employees require a specific set of skills and knowledge to meet their goals. At the start of the process, the manager and employee must determine if there are any gaps between the skills needed to perform their job, and the skills the employee has. A plan must then support the building of those skills.

Rewarding Achievements

At the end of the process, a formal meeting is used to appraise performance. Many organizations have a reward process that is performance-based. This includes salary increases, bonus payments, share options and other incentives.

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