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Performance Appraisal System

Performance Appraisal System

The performance appraisal system has become a necessity for large as well as small organizations these days. In this article, we shall discuss the need and types of performance evaluation systems in detail. So, read on to know more...
Charlie S
It is a well-known fact that organizations can do their set targets only with positive contribution from their employees. In order to give in a positive way, the employees need to be dedicated and at the same time, knowledgeable enough to deal with the increasing challenges of today's business world. Performance appraisal is the method of evaluating the performance of an employee in a given year. The result of the evaluation can show how useful a particular employee is to the progress of the organization.

Importance of Performance Appraisal

The need for performance appraisals is mainly to find out the area of strengths and weaknesses of the employees. These strengths and weaknesses are studied by the HR managers carefully and are discussed with the employees at the time of the appraisal. The appraisal process involves setting of performance standards which can help the comparison of the performance of all the employees. Communication of these standards to all the employees of the company is also a crucial aspect. Performance measurement is a process which takes time and lot of efforts on part of the senior management of the organization. At many places, marks or grades are given to the employees by comparing their real employee performance with the desired performance.

The strengths and weaknesses pointed out in the performance appraisal can help employees conduct a reality check themselves and improve their performance. The last step is that of decision-making where the employees are given enough time to learn new technologies, be more efficient, increase their working speed and improve the quality of their work. The methods of performance appraisal adopted by companies can differ depending on their needs.

Types of Performance Appraisal Systems

Among the various methods, individual appraisal method, where employee's sole performance is studied minutely is widely used. Unstructured method is believed to be a rather traditional approach. In this method, there are no set rules for deciding the merit of the employee. The comments made by the seniors on the performance of the employee are considered to the decisive. The most modern of all the methods is the 360 degree appraisal method in which the top management, juniors of the employee and some other people who know him on a daily basis give comments on his overall performance and attitude towards work. The free essay methods, in which the senior management members write an essay on the skills, abilities and performance of the employees is also used at many places. However, this method has some limitations - if the person writing it is not good enough for the job or makes mistakes, then it would be a loss for the entire organization. Peer evaluation techniques of appraisal, in which the employees check each other's performance has been a hit everywhere. Since the employees spend most time with each other, they would be definitely aware of each other's strengths and weaknesses. Here is a sample form for performance appraisal.


Division/Dept: Location/Based at: Name of the Employee:
Current Designation: Date of Joining: Last Review Date:
Appraisal Date & Time: Appraisal Venue: Appraiser:


Objective Performance

No. Agreed Objectives Weight Result Total Score
--- --- --- --- ---

  • Communication Skills: Written and Oral __________
  • Time Management Skills ____
  • Decision-making Ability ____
  • Organizational Ability _____________
  • Technical Skills _____________
  • Analytical Skills _____________
  • Negotiating Skills _____________
  • Teamwork _____________
  • Customer Dealing _____________
  • Financial Skills _____________
  • Initiative/Spirited _____________
  • Flexibility _____________
  • Dependability _____________
  • Strengths: Positive Attributes
  • Weaknesses: Needs Improvement




Scale Evaluation
1. Unsatisfactory Improvement required in all possible areas
2. Improvement Needed If proper efforts are put in, can do better
3. Good (Target Achieved) Performing tasks and duties as per directions
4. Very Good Performing in an excellent way with positive outcome
5. Outstanding Performing beyond expectations with phenomenal results





Note: The employee's signature below indicates that a performance development discussion was conducted on the specified date, but does not necessarily indicate an agreement with the content of the session.

Giving promotions to right candidates and effective performance management is a must to boost their morale. So, do this task with care and work smartly.