Prior to any development, management should take note of what exactly they want to achieve with their performance appraisal system (goals), what properties they want their appraisal systems to possess (characteristics), how they wish to execute the performance appraisal (method), and how they will use the data collected to achieve said goals (feedback). It is also pertinent that effective performance management systems clearly communicate expectations, distribute performance information to employees, determine areas of strength as well as areas in need of development, and document performance for personnel records.
Typical goals affect the employee as well as the employer. Many employers seek to improve company productivity via appraisals; others see appraisals as the primary supportive document in promotion and termination decisions. Most organizations would value both of these uses. Other examples of goals would be:
to reference the job description while identifying what is required to perform the job, including goals and responsibilities of the job itself,
to assess an employee's performance against these goals,
to work to improve performance by recognizing strengths and acknowledging areas in need of development,
to identify overall training needs
to support valuable employees while working to provide assistance to weaker employees,
to reward or discipline as needed,
to find issues within the company, use action to remedy these issues, and use feedback to check the success of such initiatives,
and to encourage employee involvement and commitment to performance improvement.
McLaughlin claims that by failing to identify you beat people, you increase the likelihood of loosing them. Performance assessments provide management with this opportunity. Because the appraisal can determine an employee's tentative promotion or dismissal, it is vital the appraisal consider the job description. They should have the full support of top management, while communicating fairness and dependability. These goals allow for mutual benefit as long as the characteristics of the appraisal reflect consistency and perceived equity. Characteristics of effective employee appraisals include: transparency, objectivity, reliability and face validity. Of utmost importance is compliance with the law. Because appraisals are often used when evaluating promotions, salary increases, and termination, the employer opens itself to scrutiny. The employee can claim wrongful discharge or discrimination if certain actions are not taken by the employer to avoid such claims.
Methodology varies significantly in these types of assessments. Managers should participate in informal performance appraisals on a regular basis, opening up the lines for communication and trust. It can significantly help a situation by simply recognizing hard-working employees as being hard-working. That said, systematic appraisals are usually conducted annually accompanying...