According to an article that is published on the Wikipedia website, “a performance appraisal (PA), also referred to as a performance review, performance evaluation, or employee appraisal is a method by which a job performance of an employee is documented and evaluated”. Additionally, a performance appraisal can also be considered as a part of the Career Development of the employees. Companies often conduct performance appraisal as their method to justify salary hike and bonuses to be given to the members of their organization. Aside from that, the performance appraisal will also determine whether there are enough grounds to terminate the employees.
Advantages of Conducting an Employee Performance Appraisal
Aside from being able to determine the percentage of the salary increase, there are a couple of amazing benefits that come with a good employee performance appraisal.
Potential Job Promotion – Aside from the monetary bonus, an employee with a flawless work performance is likely to earn a promotion. Since most companies offer promotion programs, a performance review can help them weed out underperforming employees from the program.
Compensation – Employees who do not qualify for the compensation package offered by the company is determined by a performance appraisal. Oftentimes, the compensation package includes a higher salary increase, incentives, and extra benefits depends on how well the employee has been functioning in his role for a given period of time.
Motivation – A lot of employers consider performance appraisal as a motivational tool that makes the organization members strive harder to become more efficient and gives the best of their abilities to perform their daily duties and responsibilities. And since a performance appraisal provides a comprehensive and honest feedback on the employee’s performance, the manager is able to identify which areas that the employee needs help. Usually, the manager will schedule a training for the employee to help him improve his work ability.
Open Communication – A performance appraisal is seen as a great communication tool that can benefit both the employer and the employee. If both parties are able to communicate regularly, it makes it even easier to build a strong employer-employee relationship and keeps both parties on the same page.