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Performance Appraisal System

How a Performance Appraisal System Can Improve Individual and Organizational Performance


Individual and organizational progress can be observed through outcomes in the shape of significant profits. However, when gains aren’t easily noted, even the slightest of progress must be detected. Most organizations realize the need to measure their gains whether these are large or not. Gauging their progress provides organizations a direction along which they can make improvements in their operations, resource allocation, etc. In order to measure individual or organizational progress, there must be a standardized system employed, and this is known to be done through a performance appraisal system.


Gauging Employee Progress is Key to Determining Organizational Progress


Appraisal systems are implemented in order to make observations and measure the progress of an individual in any domain. An appraisal system may be implemented in its original form, or it may be customized in order to meet specific requirements. Companies may also devise their own performance appraisal systems to cater to their organizational needs.


Make Deadlines


Set timelines to see improvement in employee performance. And make sure that the timeline is sufficient for that purpose. Don't think that short and unachievable deadlines pressure employees to work harder. It frustrates them.


A performance appraisal system is usually designed to take into account different sorts of variables. In a typical scenario, for example, employees in any department of an organization are examined according to their output in terms of speed and quality. They may also be rated according to their creativity and ability to take on diverse tasks. Additionally, the ability to work under pressure may also be measured.


Measuring an Employee’s Ups and Downs over Time


Conducting a performance appraisal for a particular employee over a period of time allows the management to gauge how performance of an individual employee has increased or decreased over time. It can also reveal the areas in which an individual’s strengths lie. For example, an employee may show a decline in some areas and an increase in others. These can be measured against variables surrounding each area.


Some objectives of a performance appraisal system include:

  • Establishing and maintaining satisfactory performance
  • Contributing to employee growth and development
  • Aiding superiors to properly understand their employees
  • Aiding effective role changes
  • Facilitating fair compensation governed by performance
  • Facilitating testing and validation of selection tests
  • Providing meaningful data for making decisions in terms of lay-off, retrenchment, etc


Have Performance Appraisals Helped Employees and Companies?


Based on the findings in a performance appraisal, the management in an organization can work to improve employee performance based on ameliorating the conditions they work in. According to statistics from the Kimberly-Clark case study where post performance appraisal measures were implemented, the following benefits were observed:

  • 90% of employees experienced an increase in goal alignment as well as the level of communication within the organization
  • 67% of employees were positive when asked about the fairness and accuracy of their performance appraisal
  • 17% increase in better coaching was observed


With the above numbers pointing towards the positive effect that a performance appraisal system may have, most companies implement standardized methods. Most multinational companies opt for implemented systems that have been successful in providing data that allows an organization to make changes in how they manage their employees effectively. This is especially when it comes to managing a diversified workforce. By managing employees more effectively and through training, employees can perform better, which uplifts the organization’s performance.