Employee performance appraisals are very integral to organisations to increase employee productivity and business results.

Although employee performance appraisals are very crucial, they are rarely done the right way. It is essential that companies adopt new performance appraisal strategies to meet their business requirements in the current scenario.

At times, performance appraisals do not give the strategic outcome of the business. 

This is because they are often very past-oriented and do the minimal towards improving employee competencies. In addition to that, performance appraisals are confined to a standard procedure to evaluate employee competencies.

Let us begin by defining performance appraisals. Performance appraisals are usually an annual process that mostly seeks to evaluate an employee’s performance against a set of objectives.  

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Performance appraisals help in evaluating an employee’s skills and competencies and determine salary revisions and promotions.

However, conventional methods of conducting appraisals have limitations in terms of following an operational framework evaluating an employee’s performance in the past rather than discussing what is needed in the future. In this article, let us discuss some of the ways in which we can improve the way performance appraisals are conducted: 

Set clear goals and objectives 

One of the reasons why performance appraisals don’t work sometimes is because they are contingent upon goals that are not set.

When you are conducting performance appraisals, including SMART goals can do wonders because they serve as guidelines for employees so that they know what is expected out of them. Employees will be able to prioritise their tasks accordingly and can make their own decisions based on the requirements. 

Moreover, setting SMART goals ensures the smooth flow of performance appraisals. This is because clear goals set the groundwork for managers and employees, and they will be able to work based on mutual understanding and review performance objectively.

Lastly, it is always beneficial when you tie your employee goals with business objectives because then employees will have something to strive for. The focus here is not just performance reviews but achieving the strategic outcome of the business. 

Continuous feedback 

Feedback is vital to every business. Feedback needs to be continuous and ongoing because that way, managers will be able to handle the team properly.

Constant feedback is pivotal because it motivates the employee to do his best to achieve the strategic outcomes of the business. Constant feedback is essential because it helps the employee understanding if he is proceeding on the right track. With continuous feedback, it is easier for managers to give constructive feedback. 

In addition to that, employees will be able to analyse their strengths and weaknesses and enhance themselves to suit the needs of the business.

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But this will work only if the organisation has a positive culture where continuous feedback is given significant weight. It is always better to train your employees on how to give and receive feedback so that it eliminates the biases and fears that accompany performance appraisals.  

Not only that, including continuous feedback in performance appraisals will minimise the gaps and inaccuracies in employee performance. 

Automated performance reviews 

Isn’t it tiresome when your employees have worked tirelessly, and at the end of the year, they feel like they have not been evaluated properly? Moreover, performance appraisals that are conducted once a year tend to create anxiety among employees because they are not prepared for it.

Therefore, to eliminate that fear and anxiety, it is only better if performance reviews are conducted in a periodic fashion, let’s say on a monthly or a quarterly basis. Well then at least, your employees can view their progress and prepare themselves for the next appraisal cycle. 

This is only possible if you partner your performance appraisals with technology that can automate the process for you. Companies can invest in performance management software, that will help automate performance appraisals for them.

This is a good option because then companies will be able to nurture the performance of the employees with continuous development. Not only that, it saves a lot of time and money and minimises the administrative burdens of HR. So, no more excel sheets…YAYY… 

Employee self-development 

Performance appraisals are meaningful only when there is scope for employees to develop themselves and grow. There was a time when managers would go over the past performance records of the employees and send out appraisal letters.

But little do they realise that performance appraisals are not just meant to look at the performance of the employee objectively, but is tied to the strategic intention of the business. To fulfil this strategic outcome, it is essential that employees are improving themselves continually. 

We must realise that employee development is tied to the growth of the organisation. Your employee performance appraisals are meaningful only when you incorporate employee developmental plans.

This results in better employee productivity. What you could do is in terms of understanding the needs of the employee after the appraisal cycle. Managers can create developmental plans according to the specific professional requirements of the employees. 

Rewards and recognition 

Appraisals need to provide the opportunity for managers to recognise the employees for the work that they do. Managers must ensure that employees feel valued for their contributions.

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After an appraisal, managers can offer rewards in terms of bonuses and salary hikes to the employees who have performed well. Managers can always show their recognition of employee’s work by sending them notes of appreciation and expressing gratitude.  

Now, this form of appreciation does not have to be necessarily financial, but if managers give their sincere acknowledgement of an employee’s work, then it becomes a huge step towards maintaining employee engagement.  


When it comes to performance appraisals, obviously there is no one size that fits all, but you can use some of the above-mentioned strategies to effectively conduct performance appraisals and actively engage your employees.

The key here is to build that trust and transparency with your employees. So, what kind of strategies do you have in mind? 

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