Performance appraisals: Overview, definition, and example
What are performance appraisals?
Performance appraisals are formal evaluations conducted by employers to assess an employee's job performance, skills, behavior, and overall contribution to the organization. The purpose of performance appraisals is to provide feedback to employees, identify areas for improvement, set goals for future performance, and make decisions regarding promotions, compensation, and development opportunities. These evaluations are typically conducted on a regular basis (e.g., annually or semi-annually) and are often used to align individual performance with organizational goals.
For example, a manager may review an employee's work over the past year, assessing factors such as job knowledge, productivity, teamwork, and communication, and then provide feedback based on this evaluation.
Why are performance appraisals important?
Performance appraisals are important because they provide a structured way to measure and communicate an employee’s performance. They help ensure that employees understand how their contributions are being valued and how they can improve in their roles. Additionally, performance appraisals offer a basis for making decisions about raises, bonuses, promotions, and professional development. Regular appraisals also allow employers to identify high-performing employees, address performance issues, and ensure that employees are aligned with the organization's objectives.
Understanding performance appraisals through an example
Imagine a company that conducts annual performance appraisals for all employees. An employee named Sarah has been working as a marketing manager, and during her performance appraisal, her supervisor reviews her achievements over the past year, such as successful marketing campaigns, her ability to meet deadlines, and her contributions to team projects. Based on the feedback, Sarah is given a rating, such as "Exceeds Expectations," and is provided with specific feedback on what she did well and areas for improvement. Additionally, goals are set for her professional development, such as taking advanced marketing courses to further enhance her skills.
In another example, a company might use a 360-degree performance appraisal process, where employees receive feedback not only from their supervisors but also from peers and subordinates. This approach provides a more comprehensive view of an employee's performance and can help identify areas of strength and weakness from multiple perspectives.
An example of a performance appraisal clause
Here’s how a clause related to performance appraisals might appear in an employment contract:
“The Employee shall undergo a performance appraisal at least once annually, during which their job performance, skills, and contributions will be assessed. The Employee will receive feedback from their supervisor and may be provided with recommendations for professional development, along with goals for the upcoming year. Performance appraisals will serve as a basis for determining salary adjustments, promotions, or additional training.”
Conclusion
Performance appraisals are a critical tool for both employees and employers, providing structured feedback and helping ensure that employees are meeting organizational expectations. They promote transparency, identify areas for growth, and align individual and organizational goals. By conducting regular and fair performance appraisals, employers can foster a culture of continuous improvement, enhance employee satisfaction, and make informed decisions about career development, compensation, and promotions.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.