Workers, in addition to executives, frequently ask why businesses do employee performance appraisals. Any employee who has ever been on the receiving end of performance appraisal could argue why they perceive it to be useless and a complete waste of time. Workers frequently feel that they are unfairly evaluated and executives frequently undergo a mandatory annual process to comply with job prospects. This doesn’t make it easy for both parties.

What Is Performance Appraisal?

A performance appraisal is an assessment carried out on an employee’s job performance over a particular time period. It is just like a report card of a worker and the way their executives evaluated their overall performance over the prior year regarding their jobs. Any worker who has worked in multiple departments or at more than one organization can confirm the fact that not all performance appraisal methods are the same. It depends on the work nature and workplace environment.

The unpredictable structures and methods are everywhere on the map. Regrettably, some of these processes are carried out so poorly that they’re not only designed to fail, but also to create a bad experience for both the executive as well as the employee.

Why Do Performance Appraisals Necessary For Companies?

There are many various reviews with reference to performance appraisals and why they’re performed.  Some businesses do performance appraisals due to the fact that they feel obligated to carry them out– because everyone else does. Some companies do performance appraisals just to make sure they’ve a document in the employee’s record – in case they ever need to do counteractive action.

However a successful company understand the significance of incorporating employees’ performance appraisals into their performance management practice and strategy. They use this employee performance appraisal tool to engage, encourage, and develop their skills.

Performance Appraisals Perks


A performance appraisal provides a record of worker performance over a specific time. Actually it is a document that can be placed in an employee file.


This employee performance appraisal process creates a structure where an executive can meet and discuss overall performance with an employee. It forces the uncomfortable conversations that often need to occur.


Employees crave feedback and this process allows an executive the opportunity to provide the employee with feedback about their overall performance and discuss how well the employee tasks were carried out. It additionally provides a chance to discuss worker development opportunities.

Explain Prospects:

Workers need to know what’s expected of them and the performance appraisal allows an executive to elucidate prospects and discuss problems with their worker.

Annual Scheduling:

It offers an arrangement for considering through and planning the coming year and developing worker objectives.


The employees’ performance appraisal should inspire workers by rewarding them with a merit increase and as a part of an extensive repayment approach.

Performance Appraisals Drawbacks

Creates Bad Experience

If not achieved, the performance appraisal can create a bad experience for both the worker as well as the executive. Proper education and training on performance appraisal process can assist with this.

Natural Favoritisms

This type of human evaluation are subject to natural favoritism that cause rater errors. Executives need to know these partialities to take away them from the performance appraisal process.

Tense Workplace: 

Performance appraisals can create demanding and tense workplace environments for both employees and executives. Proper training can lessen the stress involved in the performance appraisal process.

Companies that implement performance appraisals process into their comprehensive performance management system can achieve their objectives and strategic business planning.

Small Business Financing News │ Merchant Advisors | blog
Why Performance Appraisals Are Important For Small Businesses?
Why Performance Appraisals Are Important For Small Businesses?
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Performance appraisals serve many benefits for employers as well as for employees. Here is why its important for a small business.
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