📋 Appraisal
Big Idea: Performance appraisal is a formal process where an employee's work performance is assessed against agreed targets and standards. It typically involves a meeting between the employee and their manager.
Types of appraisal
- Formative appraisal -- ongoing feedback aimed at developing and improving the employee. Focuses on growth and learning, identifies training needs, and sets new goals
- Summative appraisal -- a summary judgement of performance over a set period (e.g. annual review). Often linked to pay decisions, promotions or disciplinary action
- 360-degree appraisal -- feedback gathered from multiple sources: managers, peers, subordinates and sometimes customers. Gives a rounded view of performance
- Self-appraisal -- the employee assesses their own performance before the appraisal meeting. Encourages self-reflection
What happens in an appraisal?
- Review performance against previously set objectives
- Discuss strengths and areas for improvement
- Identify training and development needs
- Set new objectives for the next period
- Discuss career aspirations and progression
- May determine pay rises, bonuses or promotions
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Benefits
- Provides clear feedback so employees know how they are performing
- Identifies training needs and career development opportunities
- Motivates employees by recognising good work and setting clear goals
- Creates a formal record of performance that supports fair decisions on pay and promotion
- Opens two-way communication between manager and employee
Limitations
- Can feel stressful for employees, especially if only conducted once a year
- Bias -- managers may have personal preferences that affect their judgement
- Time-consuming -- especially in large organisations with many employees
- May focus on past mistakes rather than future development
- If poorly conducted, appraisals can demotivate rather than motivate
In exam answers about appraisal, always consider the IMPACT on employee motivation. A well-run appraisal motivates; a badly-run one demotivates. The process matters as much as the outcome.