Performance appraisals are periodic assessments of an employee’s job performance. Businesses often use performance appraisals to provide employees with feedback on their work and to justify decisions like salary increases, bonuses and, in some cases, terminations. Although performance appraisals can be performed at any point in time, many companies conduct assessments on a quarterly, semi-annual or annual basis.
Reasons To Implement Performance Appraisals
Businesses may use performance appraisals to establish guidelines for increases in compensation, to identify the best candidates for a promotion, to measure employee strengths and weaknesses and to offer constructive feedback for improvement. Some of the top reasons to implement performance appraisals include the following:
Measuring & Rewarding Employee Performance
Performance appraisals are often performed as a way to reward employees who have a record of working hard or going beyond the call of duty. When job performance is tracked and measured, deserving employees can be recognized with rewards like higher pay, bonuses or other benefits. There are several different ways that employers can track performance, such as through regular one-on-one discussions, formal evaluations based on KPIs or 360-degree evaluations. Data should be collected throughout the year to provide managers with information to review when conducting a performance appraisal.
Improving Employee Development
Performance appraisals can be highly useful for employee development purposes. Appraisals can provide guidance to employees who are doing well and employees who may require improvement. Businesses often use personal development plans (PDPs) as a component of a performance appraisal to establish development goals and outline practical ways to enhance job performance over a period of time. Performance appraisals can help underperforming staff by identifying specific training needs and skill gaps that require focus. With this feedback, an employee can take the necessary training programs or educational classes to improve job performance and achieve greater productivity in the workplace.
IDENTIFYING POTENTIAL IN EMPLOYEES
Performance appraisals can also be an effective way to identify potential in an employee. During a performance appraisal, managers have the opportunity to sit down and talk directly with employees to determine where they stand and where they see themselves in the future. With this information, managers can help their employees map out a successful career path that involves enhancing their performance and developing new skills. Performance appraisals can be highly useful in the talent management process and can help ensure that employers are doing their best to retain high-performing employees.
Managing Changing Roles In An Organization
Performance appraisals can be a practical way to share new information with employees regarding changes within the workplace. Whether the business is introducing new technology, developing new products or offering new services, it is important for employees to be aware of these changes. A performance appraisal provides employees the chance to ask questions about changes in the workplace and how these changes will affect their role. Managers are able to explain new responsibilities in a clear and concise manner, set goals based on these new responsibilities and schedule training to learn about new products or technology.
Improving Employee Performance
A performance appraisal can do more than just encourage staff development. Appraisals can also be used to challenge employees to improve their performance through goal setting. Performance goals aim to encourage workers to increase their productivity and work more efficiently. When setting performance goals for employees, it is important for the goals to be practical and achievable within the given timeframe to avoid feelings of discouragement. It can also be useful when an employee who used to be a high-performing worker suffers a decline in productivity or performance. A performance appraisal can give these employees a helpful nudge to enhance their performance.
Allowing Employees To Voice Concerns Or Ideas
Employees sometimes feel like they are not being heard by their managers or employers. This can act as a disincentive and cause employees to do the bare minimum instead of working hard to achieve success. It is important to ensure that all employees know they are being listened to and that their ideas are worthy of consideration. Performance appraisals are an excellent platform for communication and can encourage employees to ask questions, share ideas or discuss their concerns about various topics that may impact their work performance. As performance appraisals are usually one-on-one, employees often feel more comfortable discussing these topics rather than in front of a group or other employees.
Speak To Experienced PEO Consultants
Performance appraisals can provide managers and employers with a wide range of useful information, such as who their best-performing employees are and what incentives help boost productivity. A performance appraisal has the potential to enhance employee engagement, improve communication, encourage transparency and allow for recognition when it is deserved. For more information about why performance appraisals are important, reach out to the experienced PEO consultants at BenefitCorp. Call by phone at 972.737.7875 or request a quote online.