Performance Appraisals and their Significance in Organizations

Performance Appraisals
Performance Appraisals

Employees of an organization work primarily for two things, one- salary and two – appreciation. When any one of these is not satisfied they tend to get disassociated with the organization and its goals leading to their leaving the job.  It is pretty normal for every person to expect appreciation for the good job done and hence, according to the human resources consultancy experts, it is really significant for every organization to evaluate its employees’ knowledge, skills, and abilities; and this evaluation is called performance appraisal.

HR management consulting professionals say performance appraisal is not just for evaluating an employee’s performance; it is essential to understand the employee’s abilities and scope for future growth in the organization and the gaps that need to be worked upon.  There are numerous benefits of performance appraisal that make it all the more important for an organization’s success.

  • Firstly, it helps each employee understand his/her role and status in the organization and how they have fared in the eyes of the management. Employees usually like to know what others think of their performance and what they can do further for the organization.
  • Employees often compare themselves with others and performance appraisals help influence the team performance and the performance of the organization. Human resources consultancy professionals reiterate the fact that when someone is being appreciated or rewarded for a good job, others get motivated and work hard to perform better and get better recognition in the next appraisal session.
  • HR consultants also say performance appraisals provide a good platform to provide honest feedback to the employees, identify areas of improvement, and develop training programs as required to bridge the gap areas and enhance employees’ skills.
  • Performance appraisals provide a good opportunity for the employees in the form of a structured process to discuss their issues and problems with the management and clarify their expectations for the future. This helps managers, team leaders, and team members to clearly understand their roles and responsibilities and set the employees’ goals.
  • It helps the management to identify those employees who need to be rewarded or promoted for their good performance and those who need to be given opportunities to improve or need to be communicated about their below satisfactory levels of performance and let go from the organization.
  • As per the HR consultancy services firms, the statistics of performance appraisals over a period of time facilitate in analyzing the organization’s recruitment and employee engagement activities thereby helping in monitoring the organization’s performance with respect to its workforce and productivity.

When performance appraisals are conducted properly with mutual respect, support, and positivity; relationships between management and employees improve and a smooth work environment is created facilitating greater levels of productivity. If organizations are not equipped with in-house HR professionals to tackle performance appraisals, it is a good thing to outsource the process to HR management consulting firms that have experienced professionals because appraisals provide the best opportunity to rectify poor productivity and reward outstanding performance while giving employees ample chance to be heard and grow in their career.