How Performance Appraisals Help Companies

Why are performance appraisals important

 

Your employees are one of the strongest pillars of your organization. Thus, it becomes important to review employee performance, productivity, and output. The process of evaluating an employee’s job contribution is what we understand as a performance appraisal.

Performance appraisals help companies to determine workplace problems, if any. Such appraisals are pivotal for the organization to be able to achieve its short and long-term objectives.

Why are performance appraisals important

Why are performance appraisals important?

Appraisals are an important aspect of human resources management, which are beneficial to both the organization as well as the employee.

  • Redefines employee role:

A performance appraisal helps an employee understand the favorability of his job performance. A clear idea is offered with respect to areas where performance can be improved. Appraisals expose employees to functions where they are falling short and corrective action needs to be taken.

 

  • Development of the Employee:

Performance appraisals are powerful self-development tools. It is during these appraisals that employees come to know their strengths and weaknesses. This helps them to build on their plus points, while bridging the gap with respect to their limitations. At times, team leads or managers may even draw a developmental plan for employees at the end of such appraisals.

 

  • Merit-backed Compensation:

It is during these performance appraisals that merit-backed compensation plans are drawn. Employees, who come out as better performers are rewarded with additional incentives or an overall salary raise. However, the ones, who have failed to match up to expectations, may be penalized in some way.

 

  • Employee & Organizational Growth:

Employee and organizational growth are two sides of the same coin. They are interrelated to such an extent that when the employee outperforms, the organization has to move one-step closer to success. Thus, appraisals are a go-to, to measure employee and organizational growth.

Apart from the above advantages, a performance appraisal also helps in successfully carrying out promotions and transfers. Companies will also be able to determine under-performers and decide on the further course of action.

The only pre-requisite is to have a reliable and full-proof performance appraisal system in place. Most companies carry out performance appraisals annually. However, lately a few are moving towards shorter cycles as well.

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How Performance Appraisals Help Companies
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How Performance Appraisals Help Companies
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Your employees are one of the strongest pillars of your organization. Thus, it becomes important to review employee performance, productivity, and output. The process of evaluating an employee’s job contribution is what we understand as a performance appraisal.
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Techitalents
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