📋 Types of Appraisal
Big Idea: Appraisal is the formal process of assessing an employee''s performance. Different methods suit different purposes.
- Formative appraisal — ongoing, developmental feedback during the year. Focuses on improving performance through coaching and support
- Summative appraisal — end-of-period evaluation measuring overall performance against targets. Often linked to pay/promotion decisions
- 360-degree appraisal — feedback from managers, peers, subordinates and sometimes customers. Gives a complete picture but can be time-consuming
- Self-appraisal — employees evaluate their own performance. Encourages reflection but may lack objectivity
In exams, compare appraisal types by discussing who gives the feedback, what its purpose is, and whether it is developmental or evaluative.
📊 Labour Turnover
The Formula: Labour turnover (%) = (Number of staff leaving during a period / Average number of staff) x 100
A company has 200 employees on average. 30 leave during the year. Labour turnover = (30/200) x 100 = 15%.
- High turnover = many staff leaving (costly — recruitment, training, lost productivity)
- Low turnover = staff staying (stable, experienced workforce)
- Some turnover is healthy — brings in new ideas and skills
Always consider WHY turnover is high — poor pay, bad management, lack of progression, or simply a competitive labour market?
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💸 Causes and Costs of High Turnover
Causes
- Low pay or poor benefits compared to competitors
- Lack of career progression or training opportunities
- Poor management or toxic workplace culture
- Boring or unchallenging work
- Better opportunities elsewhere
Costs
- Recruitment costs (advertising, interviewing, agency fees)
- Training costs for new staff
- Lost productivity during transition
- Loss of experienced employees and institutional knowledge
- Potential damage to team morale