A Performance Appraisal is a periodic review and assessment of an employee’s overall contribution to the company. Because companies do not have enough funds to give out raises and bonuses to all employees, a Performance Appraisal is conducted to help employers determine who exactly are the top-performing employees and thus reward them accordingly.
Performance Appraisals are commonly performed every year – usually during an employee’s anniversary. They are sometimes referred to as annual reviews and involve the careful and objective analysis as well as evaluation of an employee’s skills, abilities, achievements, weaknesses, and areas for improvement.
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Performance Appraisals and Performance Evaluations are commonly interchanged. However, those who are familiar with human resource management will know the difference between the two. Performance Appraisals and Performance Evaluations similarly refer to a process of an employer conducting an assessment of an employee’s work performance in order for him to determine the amount of raise in salary and benefits that should be merited to an employee. Generally speaking, evaluations should come before an appraisal.
No employer wants to maintain employees who are not performing well or whose productivity is low, which is why Performance Appraisals and Performance Evaluations are both important aspects in business because these help assess the overall value of an employee’s work and work contributions so that an employer can determine if objectives have been met.
Employee Appraisals aid supervisors in evaluating their employee’s performance at work and help in developing a fair system in pay increases and promotions. Appraisals also aid employees so that they can improve their performance level and increase their level of productivity.
When done accurately and objectively, a Performance Appraisal can assist companies in devising or reorganizing job functions to make these fit the position of an employee and incorporate goals to promote development and growth for both the company and the employee.
Periodic employee evaluations are performed to provide critical assessments and feedback to employees. This allows employees to determine their strengths, weaknesses, and abilities. Performance Evaluations also serve as a chance for employees to discuss and communicate with their supervisors and to devise strategies in order for them to hone their skills and become better employees.
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Performance Appraisals provide several advantages to a company and are considered to be an investment because these allow companies to retain the loyalty of talented employees. Below is a list of advantages associated with conducting annual Performance Appraisals in the workplace:
Basis for Promotion
Most companies and organizations primarily conduct Performance Appraisals in order for them to weed out performing employees from non-performers. Through these appraisal processes, employers can then determine which employees have the set of skills and abilities and which ones can take on bigger work responsibilities in lieu of a promotion. As another effect of a Performance Appraisals, supervisors can also chalk out employees who are not performing well and can be called out for coaching, dismissal, or demotion.
Basis for Increase in Compensation
Another reason for conducting Performance Appraisals is to put value on an employee’s worth to the company. Performing employees will typically merit an increase in wages, benefits, allowances, or incentives as a means of reward for doing an exemplary job.
Promotes Employee Development
When Performance Appraisals are performed in an objective and a systematic way, this allows supervisors to properly analyze an employee’s strong and weak abilities and establish training policies or programs to help them hone their skills or help them improve on areas where they are struggling.
Performance Appraisals also allow supervisors to properly profile employees so that new jobs can be tailored for employees who can work more efficiently.
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Communication is an essential part of a successful business. Through proper communication, harmony between employees and management is established and a peaceful working environment is created. Performance Appraisals promote communication among superiors and employees because these allow supervisors to understand and accept their subordinate’s set of skills and weaknesses. This also helps supervisors look at things through their subordinate’s point of view.
Performance Appraisals also allow employers and employees to maintain a friendly and cordial management relationship, boost employee morale, and allow employees to give out suggestions on how the management can help them to improve.
The sole purpose of why employers conduct Performance Appraisals in the first place is to motivate employees. Through promotions and increase in compensation, an employee becomes driven to optimize his performance and to deliver accurate and efficient work, as well as achieving target goals.
Self-Assessments contribute to the well-being of a company and an individual, which is why Performance Appraisals have to be continually done each year despite it being a hassle and a tedious job to do. Be sure to properly document the results of your Performance Appraisals so you can have a reference point in the future. Self-Assessment forms, Performance Appraisal Forms, or Generic Appraisal Forms can be downloaded online to help you make your documentations more organized.
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