The advantages of an employee performance appraisal

There are costs and benefits in implementing an employee performance appraisal in an organisation. It requires energy, time and resources to conduct it annually. If the execution is off-tangent, it can even leave a negative impact on the team. On the other hand, an effective appraisal system can boost the morale of your people.


Experts have come up with different methods in conducting performance appraisal. Performance management has developed and continues to evolve as different tools, templates and processes are created to suit varying corporate environments. The best way is to hire a professional who can handle your human resources or get a consultant that can manage the evaluation process of your company efficiently. The important part is not to lose focus on the objectives of the performance appraisal.

A lean organisation might not see the immediate need for an employee performance evaluation as you can easily gauge the performance of your staff. However, companies that are growing will find it useful in the long run, putting an order in the movement of people within the establishment.

Establishing good relations with staff

Companies conduct an evaluation of employees with the intent of reviewing their output and fit in the corporate environment. But it is also an avenue for management to strengthen relations with staff members. Employees can take this opportunity to openly express themselves and communicate their opinion and insights, especially in a one-on-one setting. This way, trust is established within your business.

Alignment of company goals with individual members

Employee appraisals provide the management with a platform to reiterate the company’s vision as they can review employee performances’ alignment with the overall goals. Your staff may be delivering good results, but if they are not in harmony with the company goals, they need to be re-directed to the objectives of the business.

Rewarding good performers

There’s a threshold of positive outcomes from good performers if they are not rewarded or commended. It can dishearten or burden them, thinking that their actions are not getting the right attention they deserve. Recognising their efforts through a promotion or upgrade will encourage them to continue with their admirable work and even strive to excel and be better. It’s difficult to keep good people, so an appraisal can be a tool to maintain them in your team.

Motivating dispirited team members

Problem employees are part of the reality of an entrepreneur. It’s not always the case, but when it happens, there are ways to deal with it. During the evaluation process, you can discuss sensitive topics like this and agree on a win-win solution for both the company and the staff. Sometimes, letting go is the most viable option, but you have to set a period where the employee can still improve himself or for the company to determine if he has the right fit.

Planning employee’s career development

Generally, the appraisal can be a basis on how to plot the development of your people within the organisation. You can do more than just giving feedback because you can also take this chance for coaching and mentoring.

You can review your performance management system regularly to check if it still serves your purpose or if it’s time to look into other systems available. The employee performance appraisal should be a tool to help your business forward, not a hindrance that will hamper your operations.