Employer’s Guide to Appraisals

By Joanne Hue, Updated: 2023-03-14 (published on 2022-05-07)



An appraisal is an act of assessing an individual, place, or thing. When talking about business or at the workplace, it’s a method of evaluating the performance of employees to determine their value and importance to the organization. The results of this provide the bases for promotions, pay increases, and other benefits.

When this process of appraisal is carried out correctly, it should form part of an effective performance management system, to measure the progress of your staff.

This helps in exploring the effectiveness of performance appraisals on the performance of an employee. It also helps in assessing their performance and increases their overall engagement. 

Appraisal at work

In the workplace, it is used between the employee and their employer to discuss performance. Along with that, it also gives an opportunity to the employer to assess and understand the abilities of an employee for further development.

Although there is no requirement by law to discuss the performance reviews of an employee, it provides a platform to discuss the important work-related issues between the employer and the employee. This also helps in assessing and managing the productivity and growth of an employee within the business.

Objectives of employee appraisals

The objectives of an employee appraisal include the following:

  • Defining employees’ roles and responsibilities.
  • Identifying strengths and weaknesses.
  • Determining their pay packages and compensation. 
  • Providing performance feedback to a staff member.
  • Receiving feedback from the employee.
  • Improving communication.

The main agenda of staff appraisals is to measure and improve the performance of employees at work. The resultant objective is to increase the potential and value of an employee for the company.

How to do a performance-based appraisal?

In most cases, employers know the importance of appraisals. However, they are not well versed with the process of conducting appraisals with an employee. Planning is the first step to conducting a performance-based appraisal of an employee. 

Employers need to assess data relating to the performance of an employee. This included notes from the previous review meeting, along with information on future goals and objectives to set. This information should be used to create an agenda to help in proceeding with the direction of the meeting.

During the meeting, the employer will discuss with employees their challenges and successes within that period. This should also include guidance and provide information on the ways to improve performance to meet the specific goals and targets. However, the main objective and focus of conducting the process of appraisals at work are on the future development of an employee. It is important to have an action plan to know how individual targets can be met and to know which of them contributes to the overall performance of the company.

There are a variety of examples and templates of employee appraisals that can be adopted by the companies. It includes appraisal forms for manual workers, forms based on job objectives, and even self-evaluation forms for members of the staff. These are used by employers to highlight their strengths and weaknesses, as well as their skills and abilities.

Methods of employee performance appraisal

There are a variety of methods that can be used by organizations to assess the performance of their employees. All of these methods have their pros and cons. One method may be suitable for one organization but not the other. Therefore, it is important to determine the method which suits your organization and helps you in evaluating the appraisal of an employee.

The method to evaluate employee performance was divided into two categories by George Strauss and Leonard Sayles in their 1997 book Managing Human Resources. These two methods are:

  • Traditional methods
  • Modern methods

The traditional method rates an individual’s personality traits such as loyalty, judgment, knowledge capacity, etc. However, modern methods develop on those traits and focus on the evaluation of job achievements.

Traditional performance appraisal methods include:

  • Rating: An employee’s level of performance is determined by a variety of factors which are rated on a numerical scale by the employers. For example, on a scale of one to ten with ten meanings strongly agree and one meaning strongly disagree.
  • Forced choice method: The ready-made statements are provided to the employees about them which they can only answer ‘yes’ or ‘no’ to.
  • Checklist method: A lot of employee traits in the form of statements with ‘yes’ or ‘no’ answers. Once these are completed, they are sent for evaluation to the HR department of the company.
  • Essay evaluation: This method helps in providing a detailed evaluation and description of the performance of an employee. The evaluation should include details of their relationship with co-workers, their strengths and weaknesses, etc.
  • Critical incidents method: Recording of the critical behavior of each employee is done by this method which helps in determining the difference between the effective or non-effective performance of an employee. These factors may be taken into consideration by the employer while evaluating performance or considering the promotions and bonuses of an employee.

Confidential Method: Such methods are commonly used by government departments to evaluate the performance of employees using various factors such as attendance, leadership, self-expression, ability to work with others, responsibility, integrity, etc.

Modern performance appraisal methods include:

  • Management by objectives: This method is used to set specific goals and performance standards with employees. The process helps in assessing the comparison between the initially agreed goals and the goals achieved for the given period. It is important to conduct periodic reviews to improve the performance of an employee.
  • Assessment center method: This method is used to measure the organizational skills, interpersonal skills, and planning ability of employees. It helps to determine the training and developmental needs of the workforce.
  • Behaviourally Anchored Rating Scales (BARS): This technique is used to rate the employee’s performance using qualitative and quantitative data. A similar numerical rated behavior is used to compare the performance of the employees. 

Other modern performance review methods include the 360-degree method and human resource accounting.


It can be concluded that the employee’s appraisals not only helps in determining the performance of the employees. It provides assessment and the ways to reach specific goals and targets.  Additionally, it also helps in the overall performance of the company at the same time. 

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Tags: business | HR

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