What is a Performance Appraisal? – Employer Solutions Plus

A performance appraisal is a formal review of an employee’s performance. These are usually done either annually, semi-annually or quarterly depending on the nature of the business and the management preference. Typically these appraisals are the driving factor for merit increases, wage determination and bonuses.

These appraisals are meant to be objective performance reviews that are based solely on how an employee executes their job – not on their personality or characteristics. It can sometimes be referred to as an annual review, evaluation, professional development benchmark or an employee evaluation. Having these reviews with your employees is a critical business practice.

As an employer, a formal review where you document performance is important for many reasons – one of which is to protect yourself should you need to terminate an employee. Employee reviews should contain honest and candid feedback that has clear, specific examples of any successes or failures.

Collecting the data for these reviews can be daunting – particularly if you have a large population of employees. You first have to determine what the key areas of the form would be, how frequently you want to update the information, who is responsible (usually their direct manager), who is involved in the evaluation process and what impact the evaluations have on employees.

It is important to have an objective scoring process for these reviews. We recommend a numerical scale that also has an area for verbatim comments and feedback. You should also ensure that the employee provides their comments, formally, around the feedback and signs off on the review, the next steps and any other items that were discussed.

We recommend that you utilize a formal system for reviews. Employer Solutions Plus has access to the best and most cost effective performance management systems and would love to set up a free consultation with you to find a process and system that works well for your business.

If you’re currently working with a Professional Employer Organization, they may have a complimentary template you can utilize!