Define Employee Appraisal

Significance

After conducting employee appraisals, the organization is able to base decisions like promotions, transfers, terminations and pay hikes on the appraisals in a given evaluation period. Also, the organization is able to evaluate the usefulness and accuracy of the appraisal mechanism itself.

Employee appraisals open up healthy upward and downward communication channels in the organization. Downward communication flows from the superior to the subordinate, and upward communication flows from the subordinate to the superior.

A manager allocates work among his subordinates and establishes goals for them. At the end of the year, as a result of the employee appraisals, the manager can gauge whether the goals were achieved and how well his subordinates performed.

Also, areas of concern and problems requiring training can be brought into focus as a result of employee appraisals.

There are two types of employee appraisals. Individual employee appraisals measure and analyze factors such as initiative, drive, absenteeism and attainment of goals. The second type of employee appraisal compares the performance of an employee in relation to the other employees working in the same department.

Both the organization and its employees can benefit from employee appraisals. The organization can identify its star employees and take steps to groom them for the future. It can also identify its underachieving employees and either give them special attention to improve their performance, or begin the process of replacing them.

The employees in turn can get a feel for the practices and policies of the organization. The star performers can be motivated to achieve even more in the future, while the underachievers can be brought to the realization that their futures in the organization will depend on improving their performance and identifying more closely with the organization's practices, policies and ultimate goals.

Employee appraisals are usually conducted once a year, on or about the anniversary of the date of hire. They may also be carried out when an employee is leaving the organization and there is the need to promote someone internally. In this case, some employees are short-listed and appraised, and the best one ends up promoted.