Importance of Performance Appraisal

(Last Updated On: August 29, 2019)

Importance of performance appraisal has no limit. An effective evaluation and performance management process can have a significant impact on an organization’s culture, employee morale and employee engagement level – all of which improve the employer brand and support the retention of core talent within the business.

There is a debate whether traditional evaluation systems are still effective for a better workshop needs. Deloitte companies have announced that they are moving to more active discussions and opinions with the staff. Whether it’s traditional six-month review and evaluation, or one-to-one and performance catch-up, the important factor is a clear and consistent approach to performance management and reviews.

Performance Appraisal Process

Performance Appraisal Process

Importance of performance appraisal

As we have said, Importance of performance appraisal has no limit. Having a valuation conversation with employees can help improve the bottom line by aligning individual performance with business objectives. It creates more people-focused culture and an environment that wants to stay, progress and improve staff.

Growing progress and development

Organizations that provide clear advancement opportunities for new growth are more likely to be able to retain talented employees by mapping a career path for them. Regular performance looking will help employees identify when they are ready to take on more responsibility. Setting the time to discuss an employee’s personal ambitions will help organizations spot and develop potential talent and build a strong succession pipeline.

Culture of faith and openness

In today’s fastest-growing business world, maintaining a meaningful, two-way dialogue with employees is more important than ever to help retain talented people within your organization. One of the major manufacturers for employee engagement is to ensure that employees have a voice and evaluation and performance review meetings can help empower employees to fuel discussion and share their views. They will encourage ideas to influence innovation by uplifting ideas, and relationships that develop from open communication between evaluation systems will help employees be more able to discuss and discuss any ideas or issues beyond these meetings.

Employee recognition and rewards

The evaluation gives workers an opportunity to recognize and reward and to ensure that they feel valued for the work. By monitoring performance and progress against objectives, employers can evaluate whether employees can reward employees with pay increases, promotions or bonuses. This is an opportunity to thank you and provide verbal feedback and appreciation. The highlight of any success is that the reward does not have to be financial. Although money is still of great importance, and salaries should be reviewed regularly so that they remain competitive, and performance-wise, simple and sincere confessions still go a long way toward employee involvement.

New Challenges and Explicit Purposes

Feasibility is a real feeling of employees where employees with a great workplace culture. They understand what the organization is trying to achieve, motivated by its mission and values ​​and recognize how their role plays a part in achieving overall success. The discussions that will be held during the evaluation meetings will help employees understand how their individual objectives will contribute to the larger business plan. It helps in understanding the ownership of employees and empowering them to achieve the required results in a joint venture. It is also a great opportunity to review goals regularly and provide ongoing challenges, ensuring that employees are motivated by new goals and experiences.

Support and training

Open discussions on performance can help identify an issue early and provide an opportunity to explore positive solutions. The manager can provide additional training and assistance to the staff to be able to achieve such results that they will feel proud of. High-performing workers may be supported with further training to help advance their career progression.

Long-term discontent resistance

They can usually be nipped in the bud before anyone leaves the point if the assessment can be raised through meetings. This is a great opportunity for an employee to raise any concerns or concerns, or to hold back on whatever obstacles they feel might be in place. Helps to create a happy workforce and fuel a culture of openness and trust while listening to staff and addressing any concerns.

Assist staff in providing an effective evaluation system

To work best in evaluating and communicating performance, managers need to feel effectively equipped to provide regular feedback and ongoing performance management. Investing in training is a worthwhile investment for managers capable of providing effective performance evaluation with a practical approach. Maintaining a natural management style will encourage them to develop the trust and respect they need to develop open and transparent relationships, and develop skills such as active listening and performance assessment that will help ensure a constructive assessment system.

Validate the selection process

Performance appraisal is a way of validating both internal (promotion and transfer) and external (recruiting new employees from outside). Spending a lot of time and money on hiring organizations and hiring employees. The various tools used in the selection process are application vacancies, interviews, psychological tests, etc. These tools are used to predict (estimate) a candidate’s performance on the job. An accurate performance evaluation finds out the validity of various selection tools and can therefore follow appropriate steps for selecting employees in the future.


Performance appraisal is a way to find out which employee should be given a promotion. Past evaluations, along with other background data, will enable you to select the right people for promotion.

Continuous Performance Management

Continuous Performance Management


Performance appraisal is useful for transfer decision making. Transfers often change job responsibilities, and it is important to find employees who can take on these responsibilities. It is possible through evaluation of such identification performance of employees who can be transferred.

Compensation decisions

Performance appraisal can be used to compensate employees by increasing their pay and other incentives. This is also true of managers and employees of non-organized organizations. Good performance qualifications are rewarded with salary.

Human Resource Planning (HRP)

The appraisal process helps in human resource planning (HRP). Accurate and current appraisal data about certain employees Without the knowledge of who is capable of being promoted, demoted, transferred, laid off or terminated, can not

Career Development

Performance appraisal also enables managers to coach and counsel employees in their career development.

Performance response

Most employees are currently interested in learning how they are doing well and how they can do better in the future. They want to disseminate this information and improve their performance to get merit pay. Correct performance feedback can improve an employee’s future performance. This gives him satisfaction and motivation.

Employee training and development decisions

Performance appraisal information is used to find out if an employee needs additional training and development. Impairment of performance may be due to insufficient knowledge or skills. For example, a professor can improve his skills by attending workshops or seminars about his subject. Performance appraisal helps a manager find out if additional training is needed to improve his or her current job performance. Similarly, the results of the performance evaluation showed that he could perform better in the higher positions, then he was trained for the higher level positions.

Layoff decision

Performance evaluation is a good way of taking layoff decisions. If the need arises, the employee may be asked to close the lay. The weak actors are first closed. If there is no performance appraisal, then there is the possibility that the best men in the department may be put off.

Performance Appraisal Methods

Performance Appraisal Methods

Take away

Performance Efficiency provides important and useful information for evaluating an employee’s skills, knowledge, abilities and overall work performance. The following points indicate the importance of performance appraisal in such an organization:

1. Performance appraisal helps supervisors evaluate their subordinates work performance.

2. Performance evaluation helps evaluate staff training and evaluate development needs.

3. Performance evaluation provides employees with a basis for correcting their mistakes and it also provides proper guidance and criticism for employee development.

4. Performance appraisal provides rewards for better performance.

5. Performance evaluation helps improve the communication system of the organization

6. Performance appraisal evaluates whether the human resources program has been implemented in the organization.

7. Performance appraisal helps to create a pay structure for every employee of the organization.

8. Performance appraisal helps employees review feasibility so their future capabilities are expected.

Importance of Performance Appraisal

Importance of Performance Appraisal

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