Blog Detail Centre Wellington Chamber of Commerce

Performance appraisals are the evaluation of individual employee performance and productivity in relation to pre-determined criteria and goals using a systematic and recurrent process.

Why are they important?

Improves Communication

Provides a clear idea of what is expected by setting goals, timelines, and tracking progress. Structure allows employees to put their efforts towards successfully meeting expectations and job requirements.

Promotion Considerations

Allows review for if an employee is ready for greater responsibility. Comparison against earlier knowledge, skills, and abilities shows if employee performance is stagnant or improving. Performance appraisals could be the final deciding factor in a difficult promotion decision between employees.

Training and Development Improvement

Could identify the source of an employee’s struggle to meet objectives, which could be lack of training. Employee’s not having the required knowledge or skills could be corrected through training. With an appraisal made and if training is assigned, performance can be monitored to see if improvement has been made. Future appraisals may reveal additional training is required.

Compensation Measurement

Rewards based on level of individual performance. Performance appraisals give a basis for what to reward employees with whether be a salary increase or merit pay. The goal of organizations is to retain talent within company and not lose them to competitors. Recognizing top performers increases their likelihood of remaining with the company.

Effective Feedback

Feedback on worker strengths and weaknesses helps them to know where they need to improve and what areas they excel in. It could help the employer to put the employee talents to best use. Providing feedback shows that the employer both supports and

gives attention to the employee. Knowledge that the employer cares what employees are doing is a motivator for increased performance.