Employee Performance Appraisal

What once was labeled “personnel management” is now the multiple levels known as, Human Resources. The functions of the HR department vary from recruitment to payroll, hiring, benefits, training, and all the way to implementing employee performance appraisals.

Human Resource also includes implementing policies and standards that create an orderly,  supportive environment. Organizations find that implementing structure and transparency is the best way to create an overall fair and prosperous business.

By educating the dynamics of an employee performance appraisal and why it is essential, department heads are encouraged to communicate with their employees throughout the appraisal period for overall improvements within the company.

Fairness and equal opportunity are the top expectations employees have of their employer. By using the technique of employee performance appraisal, companies find relief in knowing each employee are afforded the same opportunities for advancement and merit for a job well done.

What is a performance appraisal?

The employee performance appraisal is the process often with the combination of oral and written procedures management has in place that evaluates and offers feedback on the employee’s performance, which includes recommendations for improvement and redirecting activities if needed.

By utilizing the performance appraisal, employer’s provide facts for establishing promotions and pay increases. Appraisals are necessary for assisting staff members in understanding improvements needed as well as the opportunity which they can receive recognition and reward for excelling at their job.

Also, appraisals can serve other purposes, such as:

  • Provides an avenue for companies to clarify and reshape if necessary by current business trends
  • Open lines of communication between management and employees
  • Investigate possible harmful business tactics

Although some companies tend only to utilize an employee performance appraisal when a situation arises where an employee is in the process of being terminated, documentation throughout an appraisal period is imperative to help prevent repercussions towards the company.

When a business incorporates a performance appraisal into human resource procedures, they are following protocol established to determine if the level of quality an employee is producing matches that of what the job requirements are for the position within the company.

These determinations should match or succeed in comparison to current employees performance against past standards which the appraisal originated. For instance, when determining the criteria for a teacher’s position, a school board may look to past teachers performances along with new expectations when documenting the requirements of an appraisal.

This protocol allows an employer to offer feedback to its employees concerning their level of performance and if there is room for improvement needed by the organization.

The purpose in the end is to determine whether the employee is performing up to standards and if addition training should take place or if the employee is entitled to a pay raise or promotion. On the opposite side of the coin, it can also provide documented proof that is needed to demote or dismiss an employee due to poor work performance, behavior issues, or there is no chance of improvement.

Read : The Ultimate Checklist for Performance Appraisals!

Objectives of performance appraisal

The beginning step of the assessment process is the evaluation. After this step comes the stages of recognition, rewarding, and encouraging ability and effort. On the other hand, the objective could be a way to inform an employee that their performance is poor.

The primary objective of performance is to improve the overall organization through improved employee performance. The primary goal of the performance appraisal is to provide steps to assist an employees progress to the fullest potential to meet the organization’s needs and his/her development employment goals.

By utilizing this process, maximum performance and teamwork are possible. The core to the performance appraisal is to improve the line of communications between management and its employees. Objectives of performance appraisal are:

1). To increase productivity and motivation: An appraisal helps the employee set a plan of action and schedule work while identifying the skills needed to achieve them. With clarity in the task required, an employee is motivated in reaching the goal put before them in the designated time frame.

With increased clarity, the employee can center their attention on job-related productivity, which in return produces higher performance, commitment, and efficiency.This technique improves the productivity of individual employees as well as the organization in a whole as it stands to benefit from the improvements in employees performance.

2). To recruit a top pool of talent: Performance appraisal assists an organization in finding and recruiting those within a company while making people related assessments for the following opportunities:

  • Promotions
  • Career Planning
  • Development opportunities
  • Training
  • Strategic planning for success

Employees that are shown to excel in their performance receive merit rewards such as:

  • Job rotations
  • Increase in compensation
  • Promotions
  • Management training opportunities

By acknowledging the talent and accomplishments, the organization can retain leading talent found in employees. By having previous appraisals to compare to, management can reward an employee that has continued to show growth and improvement and is ready to take the next challenge.

3). To improve transparency: By establishing the objectives/goals and the expectations of the organization, the level of performance offers clarity to the appraisal process.

4). To mold employees: Performance appraisal provides the opportunity to mold an employee by identifying the gaps in competencies and skills. Once these have been identified, proper development and training programs can be implemented for rectifying the deficiencies. This protocol produces professional and personal growth of the individual.

Performance appraisal methods

“Stack ranking” no longer is one of the top strategies used in determining how and when an employee performance determines their status of employment. Feedback is the path employers rely on in determining the level of performance an employee is maintaining. Not all managers have daily access to the employees in their department, therefore it is necessary to reach out to others for input.

Rating Scale: The rating scales resembles a report card in that it consist of several criterion’s to determine the level an employee is at in skills and production. The following are categories that are typically listed:

  • Attendance
  • Output
  • Performance
  • Initiative
  • Attitude
  • Dependability

Each criterion receives a score ranging from poor to excellent. Once the scores are noted, a conclusion is derived.

Checklist method: Not the most preferred method by employees, the checklist is a simple form of listed traits of an employee with the only answer requirement being a yes or no. With this approach, the one doing the rating only answers the questions, it is up to human resources to perform the actual evaluation.

Forced Choice: This method has a series of employee related statements aligned with blocks for answering with either true or false. The rater is obliged to choose one or the other, then human resource completes the assessment.

Forced distribution (ranking): When using this type of evaluation, employees receive levels of ranking to force allocations. For instance, the top 10-20% of employees would be listed as top level performers, while 70-80% would fall in the middle with the remaining employees at the bottom of the bracket.

Critical incidences: This style of appraisal involves the identification and description of incidents where an employee accomplished a particular feat, something outstanding or perhaps an area that could use some improving during a performance period.

Supervisors record both good and bad circumstances that make an impact on an employee’s performance.  Both situations can sway the appraisal of the employee.

Behavior Anchored Rated Scales: This is self-explanatory in that the employee’s ineffective and effective behaviors assist with determining points.  The rater doing the evaluation is to decide which behavior best describes the individual’s performance. This technique is a combination of critical incidents and rating scales used for assessments.

Field review: A field review is an evaluation performed by someone other than an employee in the same department as the one up for appraisal. Typically, a staff member within corporate or Human Resource handles these types of appraisals.

Performance Test: This method looks at the employee’s skills or knowledge to determine if they are adequately performing up to standards. Generally speaking, this method is used more when testing is a requirement to move into a higher bracket or move up ranks in skill level.

Test such as these is a presentation of competence or performance displaying the required level of skill. The test should be pre-approved and reliable to be considered useful.

Confidentiality records: This method, mainly utilized by government entities, is reviewed by the employees ACR-Annual Confidentiality Report. The recording often found in these files are:

  • Teamwork
  • Attendance
  • Self-expression
  • Leadership
  • Technical abilities
  • Resourcefulness
  • Originality
  • Reasoning abilities
  • Initiative

Essay: This type of performance appraisal method is when the rater personally makes a note of the employee’s job performance description in complete detail in various categories, such as:

  • Promote ability
  • Overall performance impression
  • Existing skills and capabilities
  • Level of competency at performing jobs
  • Overall strengths and weaknesses
  • Training requirements
  • Behavioral tendencies

Cost Accounting: This method is typically stressful to an employee that is responsible for overhead and monetary returns to the organization. The benefit and cost analysis is the core of the cost accounting technique, meaning, the cost of keeping the employee versus the benefit is what determines the end results.

Comparative Evaluations: Often called the paired and ranking comparison, this method uses the combination of other different methods to compare co-workers performance to one another.

  • Paired Comparison: This method takes each employee and matches them with another employee to score the pair.  The employee comparisons are calculated with the guidance of a formula established by management.
  • Ranking: With this method, management or supervisors score their employees of levels of merit, typically from best to worst. However, there are no elaborations on why and how the employee’s score are determined.

Types of Performance Appraisal

The type of performance appraisal all can be utilized in conjunction with others when different assessments need to be determined. Depending on the policy of the organization and the situation, the following type of performance appraisals is most common.

  • Probationary Reviews
  • Annual performance appraisals
  • Employee Counseling
  • One-on-one reviews
  • On-the-job observation
  • Job related of skill testing
  • After review assignment
  • Behavior assessment

Process of Performance Appraisal

Establishing standards: The employee performance appraisal begins with setting the standards of how an employee is to perform.  Management determines what accomplishments, outputs, and skills will be up for evaluation at the end of the appraisal period. Such standards evolve from a job description or analysis.

Standards should read in precise form with the intention of being measured and understood. Standards should not be expressed in vague manners such as “complete days work”. Standards should be precise and to the point, leaving no doubt as to its meaning.

Define The Expectations To The Employee: The next step is to discuss with the employee the expectations of his/her role as an employee. By not taking this action, the door is left open for an inaccurate and unfair employee performance appraisal.

Merely discussing the expectations does not necessarily mean the employee understands and will adhere to the standards. The manager must ensure the employee is informed and understands completely what standards are a part of his/her job.

By asking questions and getting feedback, management is securing that the employee obtains the information. It is important that communication is a two-way street with this step.

Measure Actual Performance: In this step, the level of performance of an employee is measured by the information made available by various sources such as:

  • Statistic reports
  • Observation
  • Written reports

The information gathered should be drawn from facts and not simply hear-say. The personal feelings of the evaluator should have no influence over the employee performance appraisal.

Comparison of Performance with Established Standards: Here, the actual performance of the employee is compared to the established standards that were predetermined. Such comparisons may expose the deviation between the real performance and the standard performance.

Discuss the Results with the Employee: This step in the employment performance appraisal is to discuss through communications, providing documentation if applicable, the results of the final appraisal.

This step may be the most challenging for management due to being face-to-face with the employee as they often reveal shortcomings of their performance. Constructive criticism can be difficult for those who lack in communication skills.

Implement Follow-Up Action: After the appraisal meeting there will be matters that require follow-up discussions to establish the following:

  • Goals for the upcoming year
  • Areas for improvement
  • Pay or salary increase
  • Attempts to resolve issues that surfaced during the appraisal meeting

Performance Appraisal Examples

Required information: There are many sections to performance appraisals that are department or company specific. However, some details must be included regardless of position, department, or the company, these are:

  • Full name of the employee
  • Manager or reviewers name
  • Review period
  • Date of the review
  • Job position, title or level
  • Appraisal criteria or instruction for review
  • Overall rating availability
  • Comments or feedback that support the rating
  • Specific details to support overall rating

An example of:

“Exceeds Expectations:”

Carolyn continues to exceed management’s expectation in the role of lead trainer. She effectively adapts to her surroundings and change, works well when under pressure while displaying a positive attitude. Carolyn has exceptional skills in fine detail, which is critical in her department’s strict deadline demands.

Carolyn always goes above and beyond her call of duty seeking and following through with additional responsibility where others slack. Carolyn is always present and contributes input at department meetings while encouraging others to participate. Her time is well managed and she makes herself available to others while always willing to lend an ear and give advice when needed.

Carolyn continuously displays outstanding professionalism and attention to her quality of work. Although Carolyn works efficiently independently, she could benefit from additional training in teamwork.


Carolyn meets management’s expectation in her role as a lead trainer. She adapts well to the ever-changing demands of clients and works well under pressure. Carolyn maintains a positive attitude and a keen sense of detail, but often at the cost of efficient time management.

Carolyn displays adequate communication skills while completing required task and requested responsibilities. She shows consideration of others and works well collaboratively or independently. Carolyn shows a real aptitude for leadership, but she doesn’t seek additional development in advancement opportunities.

“Unsatisfactory-needs improvement:”

Carolyn fails to meet management expectations for a person in a lead trainer role. She does not adapt to the ever-changing demand in client-facing situations and does not function well under pressure. This results in her inability to remain positive and turn situations from a negative standpoint into a positive situation.

Carolyn is capable of communicating effectively with clients and peers, but she needs improvement in collaboration and team-building skills necessary to perform this position successfully. I am encouraged by Carolyn’s drive for excellence and I feel this energy could transfer to a satisfactory status with proper training in listening, time management and specific industry knowledge.

Punctuality and Attendance Appraisal Example:

“Positive” examples

  • John continues to be a valued staff member and is a reliable employee we can depend on. John’s attentiveness to his punctuality and attendance has enhanced our group significantly over the past fiscal year.
  • Sara is extremely reliable regarding her attendance and displays readiness on a regular basis.
  • Kim starts each day ready and refreshed for any problems she may encounter throughout her workday.
  • Larry makes certain his team adhere to their breaks and lunch schedules.

“Negative” examples

  • Samantha is continually arriving at work late and needs improvement in the area over the next trimester.
  • Sally does not arrive to work on time nor does she adhere to a typical work schedule.
  • The staff meeting Joseph leads often run beyond the allotted time frame. Over the course of three months, Joseph needs to be certain his meetings begin and end in the scheduled time frame.
  • On a continual basis, Deby runs late from her breaks and should start taking the allotted time given.

Performance Appraisal Tools and Techniques

Numerous successful tools and techniques have been devised to evaluate the level of quality of employee performance appraisals. While each method is effective, some are for certain purposes and certain organizations.

None should be accepted or dismissed as appropriate unless they relate to a particular employee or need of an organization.

There are two categories all methods of employee performance appraisals are divided, these are:

  • Past Oriented Method
  • Future Oriented Method

Past Oriented Method’s consist of:

  • Rating Scales
  • Checklist
  • Forced Choice Method
  • Forced Distribution Method
  • Critical Incidents Method
  • Behaviorally Anchored Rating Scales
  • Field Review Method
  • Performance Tests & Observations
  • Confidential Records
  • Essay Method
  • Cost Accounting Method
  • Comparative Evaluation Method (Ranking & Paired Comparisons)

One or more of these tools is used to base the employee’s performance from the appraisal period. Information is gathered from various sources to assess, determine, and communicate the individual’s accomplishments and shortcomings through different means of determination.

Future Oriented Methods consist of:

  • Management By Objective (MBO)
  • Psychological Appraisals
  • Assessment Centers
  • 360-Degree Feedback

These tools are implemented for future diagnostic purposes after an employee performance appraisal is complete. One or more techniques may apply to the employee depending on the situation, circumstances and need of the company.

Employee performance appraisals are the avenue to an employee’s career assessment, development, and gateway to advancement within a company. Therefore, effective-career driven performance appraisal techniques and tools not only nurture the employee, but it also provides the organization with the best pool of employee to ensure company growth.

Even though employee performance appraisals are often grueling and time-consuming, it is the most important step an employer can take to ensure the overall success of the company is in the right hands.

If the lines of communication are always open and feedback is given on a frequent basis, the organization will be on the receiving end of prosperity in company profit. Performance appraisals help create and set standards and goals for the staff, recognize levels of achievement, direct progress and improve the overall performance of a company.

Businesses that value their employees offer appraisals and promotions to those that excel in job performance which in return increases motivation, maximizing the efficiency of production and the employees of the organization.

Hansica Kh.