Are you nearing performance appraisals but don't know what to do?
In this blog, we discuss everything that you need to know before getting your first appraisal letter along with an appraisal letter sample for you.
Let’s get started!
What is a performance appraisal?
In this highly competitive ecosystem, the aim is to stand out with top-notch performances.
Organizations conduct appraisals to have a systematic evaluation of employee performances and that of the company.
A performance appraisal is an annual review of employees to assess their job performance and contribution to the organization.
Also known as employee appraisals, the performance appraisals help in evaluating and identifying the skills, growth, achievements, and shortcomings of an employee.
Companies use appraisals to provide general feedback and justify salary increments, promotions, and demotions.
It also acts as a communication bridge between employees and organizations as effective appraisals allow the management to set KRAs (Key Responsibility Area).
As per a report by Forbes, 66% of employees said they would leave their jobs if they felt uncredited for their efforts.
Performance appraisals make the employees feel appreciated, boosting staff morale for good.
The evaluation not only acknowledges your contribution but also helps you set goals and pave a path for the future.
Effective Performance appraisals establish a culture of growth and trust, aid the continuous development and dissuades long term discontent amongst the employees.
Difference between appraisal letter and appreciation letter
People often get confused between an appraisal letter and an appreciation letter. Here are some differences that will help you identify the two.
| APPRAISAL LETTER | APPRECIATION LETTER |
|---|---|
| An appraisal letter assesses individual performances and evaluates their contributions during a set period. | An appreciation letter is awarded to the employees to praise their outstanding performance. |
| An appraisal letter is given quarterly, half-yearly or annually, per the appraisal cycle of the company. | An appreciation letter can be given to an employee at any point in time for their achievements. |
| Appraisal letter is given to all employees in an organization. | Appreciation letter is an award and is given to those showcasing exemplary performance. |
Types of performance appraisal
Every organization is dynamics and even though the objective of all appraisals is the same, companies use different ways of appraising their employees.
Let’s have a look at the types of appraisals:
1. Self-Appraisal
Self-Appraisal is an individual’s judgment of their annual performance. Many companies believe that it is best to let employees have a self-assessment to give them a better idea about their professional standing & contention with work.
Not only does this reduce the reliance on managers but it also allows you to share your insights on accomplishments & challenges faced during the year and lets you take charge of your career development.
Self-appraisal enables a 2-way assessment and helps in bringing an employer & an employee on a common ground thus resulting in a common consensus.
Also Read: How to write a Self-Appraisal
2. The 360- Degree Appraisal
The 360-degree appraisal, as the name suggests, is a method where the employee is appraised basis the assessment of all the people that work around him/her.
The sub-ordinates, managers, and co-workers come together to provide private and anonymous feedback which is included in the performance review.
In simpler words, it presents a holistically comprehensive picture of your annual performance from different people’s perspectives.
The 360 Degree Appraisal is used to evaluate the competencies and leadership skills of mid-level or senior-level managers to evaluate their leadership skills, rapport with team and character.
It focuses more on people management skills and little on individual target achievement while estimating annual performances.
3. Manager Performance Appraisal
The Manager Performance Appraisal is where the appraisal is done by the manager basis his/her observations.
Manager appraisals are often carried out with other appraisal methods like self-appraisal and 360 Degree appraisal.
The manager discusses your accomplishments and challenges faced during the year of evaluation and attempts to meet a common ground on which you can be appraised.
Apart from discussing past performance, you can also draw a map for future goals.
It is an effective method of appraisal as it leaves little room for ambiguity and enables a transparent discussion between you and the reporting manager.
Manager performance appraisals also provide an opportunity and space to communicate with your managers.
Methods of performance appraisals
Companies practice various methods to appraise employees. Here are the 5 most common Methods of Performance Appraisals.
1. Rating scale method
The rating scale method is a systematic assessment technique to evaluate the employees based on their performance and potential.
It is a common method where you are rated on a scale from 1 to 10 on criteria like regularity, target achievement, accountability, etc. The total points scored for these criteria identify you as a performer or non-performer.
This method is commonly used as it is economical and less time-consuming.
The Rating scale method is applicable everywhere and can be used to analyze a large workforce.
2. Essay appraisal method
Essay Appraisal method is a traditional approach of evaluation where a detailed essay is written on the employees describing their strengths and weaknesses.
It gives a descriptive analysis of an employee’s performance supported by performance reports and data.
Even though the essay method allows the manager to emphasize relevant issues in much detail, the shortcoming of this method is that it is tedious, time-consuming and can be biased.
The elaborate assessment makes it difficult to quantify the results and draw conclusions, making it a less practiced method across organizations.
3. Ranking method
The ranking method is another commonly used method of evaluation wherein employee performances are compared to the performances of co-workers.
This method is used when the organization wants to identify its best performers and worst.
The employees are categorized as excellent, very good, average, poor and very poor by the managers based on their annual performances.
4.Checklist method
The checklist method is an objective way of assessing the employee’s performance on a series of traits and statements.
The evaluation is done by answering questions in Yes or No. The manager analyzes your performance on a set of traits to identify your strengths and weaknesses and provide appraisals accordingly.
5. Critical incident method
This method is based on major incidents that take place in the organization during the year.
Companies that follow this method maintain logs of all the important incidents (both positive and negative) that occur and collate the same at the end of the performance period to rate employees.
What is an appraisal letter?
An appraisal letter is written proof of achievements earned by an employee within an organization.
This is given to an employee by the HR department after approval from their reporting manager.
An appraisal letter states all your significant contributions and provides details about ranks, percentage of increment, revised salary break up and changes in terms of employment.
This letter is an important document that showcases your achievements when interviewing for new opportunities and add to your credibility as a working professional.
An appraisal letter is given to motivate and drive the employees to perform and to express gratitude for their contributions to the organization.
Appraisal letter sample
An appraisal letter looks something like this
Company Name/ Letterhead
Date of Appraisal
Employee Details
Name of the Company
Location
Dear Employee,
On behalf of the XYZ company, we would like to extend this appraisal letter for your dedication and substantial contribution to the organization. We are pleased to inform you that your performance rating for the year 20XX-20XX is _______. The annual remuneration has been revised to Rs. __________ with effect from ______.
Revised Compensation & Benefits
Components Monthly Annual
Basic Allowance
House Rent Allowance
Other Allowances
Reimbursement
Monthly Gross
Annual Gross
We thank you for your contribution and look forward to your continued participation in the success of the company.
For XYZ Company
Manager
What to do to get your appraisal letter?
Performance appraisal is a two-way process and does not require the employee to be passive. Fresher or experienced, asking for an appraisal letter can be a difficult task.
Steps for you to get the appraisal process started.
1. Collect Important Information & Make a List of Your Contributions
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Before talking to your manager about appraisal, it is very important that you are well-aware of your achievements and shortcomings.
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Review your performance and compare it to the goals set by your manager and the job description.
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Get your hands on the reports and data that can quantify your contribution.
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Draw a comparison between your targets and achievements.
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List all the awards, certificates and any written recognition achieved from the previous appraisal cycle.
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Mention any pieces of training you underwent to enhance your work to contribute better.
2. Self-evaluate
- Make it a point to look at your performance through the year yourself before you speak to your manager.
It will help you prepare for an effective appraisal meeting and back you up with facts and reasons.
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Use details from the information gathered and see where you stood out and what challenges you faced.
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Note the things you need to take up with the manager and those you need to work upon yourself.
Remember, you are doing this exercise to gauge your performance.
Make sure you are honest and take into account areas you need improvement in.
Not only will it help you in identifying areas of improvement, but it will also make your evaluation seem genuine to the manager.
3. Decide Goals for Your Future
Before your manager outlines your goals for the upcoming year, ensure that you draft some too.
In doing this, you can take up roles that add responsibility and knowledge.
Not only will it give you clarity but it will also convey to your manager that you are ready to take up more responsibility and contribute better in the upcoming year.
4. Initiate a meeting with your Manager
Once you are done with your homework and are ready, reach out to your manager to initiate the appraisal process.
Share your evaluation with them beforehand, giving them time to prepare well for the meeting.
Once in the meeting, have a transparent and detailed conversation. Share all your observations with your manager and patiently hear out what they have to say.
Try to meet the gap between your expectations and that of your manager’s.
Maintain a formal code of conduct through the meeting and gracefully put across your points.
5. Take Feedback Positively
Your manager doesn't need to agree with your self- evaluation. Avoid getting defensive and take feedback positively to improve on the shortcomings
Keep your mind relaxed and be open to the feedback as it comes. Communicate, but do not get defensive.
Listen carefully and then react. Remember, the feedbacks are purely professional and aid future growth.
The end goal of the performance appraisal process is to weigh your achievements and flaws.
To get your Appraisal Letter, take initiative - do not hesitate to ask for an appraisal letter. It is your career and it is fine if you make the first move.
Be patient and open to any outcome, and prepare to hustle in the upcoming year.
All the Best!
