Essentials of a Good Appraisal System

Depending on the need to carry out performance appraisal of employees, i.e., whether work performance has to be evaluated or behavior is to be evaluated or inter-employee comparisons have to be made, the appropriate method of performance appraisal should be selected. Whatever method is adopted, it must have the following features:

1.    It is easily understandable

2.    It is fit for organization’s existing operations.

3.    It takes care of needs of the organization and its work force.

4.    It should adapt to the size of the organization

5.    It defines the responsibility of the managers and the work force.

6.    It provides support to management to design the compensation plan.

7.    It maintains balance between efforts and rewards.

8.    It is result-oriented and focuses on increasing the organization’s customers and sales.

9.    It minimizes procedural formalities in designing the appraisal system and compensation plan.

10.    It must pinpoint that aspect employee performance (behavior or results) for which it is adopted.

11.    It must be reliable, that is, free from errors.

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