How to Ensure Effectiveness of Performance Appraisal?

effectiveness of performance appraisal system

Performance Management

(Updated 2021)

Employee performance review is traditionally done in a formal, top-down manner, which reduces it’s effectiveness. Employees are reviewed once or twice a year (for no apparent reason) and given ratings based on their KRAs.

A report by SHRM states that 95% of managers are not satisfied with their company’s annual performance appraisal process. In fact, as mentioned in a report by TowerWatson, 75% of employees believe that appraisals are unfair.

Hence, the traditional performance appraisals must to be restructured to make it employee-centric.

This article is worth reading, if you want to figure out what’s causing poor performance evaluations. The author discusses how to assess the effectiveness of performance appraisal system and make reviews more meaningful.

Employee experience, personal growth, and career development are all seen to drive employee engagement and productivity.

An Effective Performance Appraisal System

One of my HR Community friends, John wrote to me:

Hi Greg,

Traditional performance reviews are viewed as time-consuming. It is also seen as a costly process by the majority of people. In fact, I also believe they are ineffective

Hence, I would like to hear your suggestions. Above all, tell me how to make performance appraisals successful, quick and efficient. Can you also suggest me the ways on how to measure effectiveness of performance appraisal system?


A Unique Perspective Towards Employee Reviews and Effectiveness of Performance Appraisal

John’s concern was genuine to a large extent. The same has been shared by many others. As a result, I would like to share my reply to him:

Dear John,

Thanks for writing.

I (to some extent) agree that most people think traditional performance appraisals as time consuming and also  expensive. But, is there a better way for reviewing employees? Yes, there is!

There is an old Kaizan saying, “You can improve only what you can measure“. Thus, measuring (or knowing) where you are and where you want to be, is just as important as actually working to improve performance.

Employee performance may be measured with the help of an effective performance appraisal system. The standard paper-based appraisal method, on the other hand, can be improved and modified in a number of ways. An effective performance appraisal system like Empxtrack, not only empowers your employees and managers but also HR, heads of departments and CEOs. They can carry out effective and transparent appraisals in quick time, as a result.

So, Here are some of my ideas about what upsets employees in traditional appraisal systems. Furthermore, how to fix them:

Factors that Have a Significant Impact on the Effectiveness of Performance Appraisals

Here are some of my thoughts on what upsets employees in a traditional appraisal process:

Lack of Clarity on Performance Appraisals

Employees frequently fail to understand the goal of the appraisal process. They don’t understand how the performance reviews will benefit them. Many employees are unaware of how a positive or negative appraisal might affect their career advancement.

Lack of Faith

Employees think that their managers do not evaluate them based on their performance. Instead, they base their decisions on personal interactions with employees. As a result, favouritism enters the scene, and appraisals become biased. Thus, employees certainly lose faith in the appraisal process.

Time Consuming

Employees are sometimes confused by complicated questions and processes on appraisal forms. As a result, employees start to see appraisals as a burden to their regular work.

Difficulty in Writing

Employees may be unable to communicate effectively due to a lack of language abilities. Hence, they are unable to accurately convey their performance and provide supporting data. When they come across a confusing performance evaluation software and irrelevant appraisal questions, the difficulty increases even more.

Lack of Feedback during Performance Appraisals

Employees nowadays want constant feedback from their bosses. However, according to a report, 67 percent of CEOs are uncomfortable talking to their employees. Managers feel uneasy giving constructive feedback or negative news to their team. Hence, the conversations are less productive and the employees are unable to recognise and resolve performance difficulties.

Best HR Practices for a Successful and Effective Performance Appraisal

The key to effectiveness of performance appraisal process, is to have easy-to-use and effective performance appraisals systems. Here are five tips.

Clearly Defined Purpose

The purpose of the appraisal should be mentioned on the first page of the appraisal form. In fact, it should also be a part of the appraisal message and sent to employees on emails. For example, the first page of Empxtrack Performance Appraisal clearly outlines appraisal workflow and help instructions for employees and managers on how to complete the review. You also get flexibility to customize the contents and write customized instructions that will be visible to employees and managers.

Employee Involvement

It is important to involve employees in self review. Not only does this make them feel valued, but it also allows them to reflect on their accomplishments and faults.

Well Defined Workflows

It is important that appraisal workflows are well defined. To suit unique needs, Empxtrack offers customisable automated appraisal workflows. One of our clients followed the workflow for appraisals that is mentioned below:

  • Employee fills self-appraisal -> Sends to manager
  • Manager fills employee’s appraisal -> Sends to reviewer
  • Reviewer reviews self-appraisal –> Sends to employee for acceptance
  • Employee accepts or rejects the appraisal

Self Appraisal

Employees feel valued when self-appraisal is included. This procedure ensures that appraisals are not conducted without the approval and confirmation of the employee. Furthermore, it ensures the effectiveness of performance appraisal process. Employees realize they have more influence over their appraisal once such a process is in place, which boosts their self-confidence.

Web-based Appraisal Process

Use cloud-based appraisal software to conduct performance evaluations. For both employees and supervisors, the web-based approach makes the entire appraisal process easier and faster. It helps you save time, money, and effort. The online performance appraisal system helps to establish foundation by allowing all stakeholders to complete the review process in a timely manner.

Training on Writing Appraisals

Another key to making appraisals effective is to provide training on appraisal writing and on how the managers should review their team members. An effective performance appraisal system such as Empxtrack, comes with an online help manual and product guide. With this, you can  conduct quick and effective appraisals..

Ongoing Evaluations

The effectiveness of performance appraisal can be measured by frequent performance reviews that provide real-time feedback to employees. Ongoing performance conversations improve overall individual performance as well as bring rewarding benefits to the team.

Constructive, Meaningful Feedback

Genuine praise or criticism, and holistic and meaningful feedback leads to a highly motivated team. After the appraisal process, let employees have a copy of the appraisal for their reference. Also let them know how it impacted their salary, compensation and career. As a result, they will make sure that their performance appraisal scores are higher the next time.

I hope my suggestions have cleared up any misunderstandings and will help you improve the effectiveness of performance appraisal in your workplace.

Thanks and regards,

Concluding Thoughts on Effectiveness of Performance Appraisal System

Appraisals can help your firm improve and strengthen employee engagement and retention. With an effective performance appraisal system, you may get rid of annual appraisals and conduct frequent performance reviews.

The traditional annual appraisal process is giving way to more regular conversions between employees and supervisors, according to Forbes.

Make it a practice to conduct holistic performance evaluations and reward top performers. Employees can achieve their maximum potential if evaluations are handled properly. In fact, managers should ensure that the performance appraisal process is never subjected to bias and inconsistencies. Employees will be less dissatisfied as a result of this.

Communicate work expectations and provide the required tools, training and knowledge to employees to perform better. The effectiveness of performance appraisal leads to a high performing workforce!

Frequently Asked Questions


How can you increase effectiveness of performance appraisal ?

Ans.A performance appraisal that focuses on overall development of employee skills and their performance is considered to be the most effective approach.


  • Setup clear employee goals and periodically measure employee performance against those goals. Furthermore, make it a practice to monitor employee achievements regularly. In this way, managers would be able to identify the challenges faced by employees in achieving goals.
  • Provide constructive feedback to help employees improve their performance. Then help them to identify their strengths, weaknesses and areas of improvement.
  • Suggest suitable training courses for employees to develop skills. As a result, learning and development programs help to boost career growth of professionals.

Implement the above tips and you will increase the effectiveness of performance appraisal process.


How has Empxtrack helped organizations in appraising employees and making reviews more meaningful and holistic?

Ans.Use these 6 tips to successfully implement appraisal process in your organization:


  • Managers should document performance of each employee at periodic intervals. In this way, managers can avoid guesswork and make informed decisions.
  • Ensure consistency between job descriptions and employee appraisals. Consequently, evaluate employee performance based on their KRAs and job responsibilities.
  • Specify your comments in the appraisal form when providing low ratings.
  • Create an employee development plan and prepare a strategy to implement it. Also measure effectiveness of the plan once implemented.
  • Always start a performance discussion with a positive note. Remember, employees are human and they may feel hurt with harsh language and rude comments.
  • Discuss the goals for the next performance period.

What are the top tips for managers to implement an effective performance appraisal?

Ans.Empxtrack has helped a number of organizations all across the globe. It has helped one of the largest financial service providers to automate their appraisal process and eliminate manager bias. The software provider offered a customizable appraisal software that could manage complex and vast appraisal data in a systematic way. In addition, the company was offered simple workflows and a fair, transparent and objective performance appraisal system that increased the effectiveness of performance appraisal.

Can I try out Empxtrack appraisal software to understand its usability for my organization?

Ans.Yes, absolutely! In fact, Empxtrack allows you to conduct evaluations for upto 5 employees at absolutely no cost. Enroll for the product and explore various features without spending a penny. We guarantee that you won’t get any sales calls as well as mitigate the risk of spending hefty amounts on appraisal software.


Later, you can get multiple upgrade options and even purchase additional evaluations and advanced features.

Conduct appraisals at no cost

Conduct 360 feedback at no cost

* No credit card required

TAGS: Employee Evaluation, HR, HR Technology, Performance appraisal, Performance Management, Performance Review

10 thoughts on “How to Ensure Effectiveness of Performance Appraisal?”

  1. “Tips for Effective Employee Performance Appraisals | Talent Junction – An HR Blog” ended up being extremely pleasurable and informative!
    In modern universe that is difficult to achieve.
    With thanks, Bertie

  2. yes, traditional methods of performance appraisals are not sufficient for giving perfect appraisal. You can used new methods for appraising employees performance like 360 degree feedback method, BARS,MBO. these are such methods which are in practicing in corporate world to appraised and enhance employees performance, also they are not cost effective.

  3. I personally believe is that most people do not believe in performance management as it create fears within of been questioned on their job and skill ability. Continuous performance evaluation is not expensieve and will provide guideline for changes and progress.

  4. What does a bad new hire cost?

    After years in HR, I’ve always heard – ‘What does a bad hire cost?’ If you make a lapse in judgment, what does it mean to the bottom line? Commonly I’ve been told – two years’ salary. For instance hiring someone at 50K means you lose the 100K in pay, benefits, time and training. These are things easily measured. I’ve found the true risk is much deeper.
    We all forget that this person represents our company. It is their face on our message, our values and our mission. We, like most, have worked for decades to build a brand that is well respected and admired within our community. Salesmen at our company typically hold on to their positions for years, so the public face of our company is very stable.
    We hired someone who looked very promising on paper. They had all the experience, credentials and interviewed very well. After 10 months of employment we found that this one decision cost us millions in sales and the loss of a handful of our core clients. Looking back all of the signs were all there. We decided to bend the rules and forgo some of our standard testing since this candidate ‘looked so good on paper.’ A simple Myers-Briggs report would have revealed just how strict the guy was. His personality was very extreme and it offended more than it helped.
    The public saw us as the company was easy to get along with. We saw a candidate that would offer structure. This snap decision created conflict with our public persona and allowed a competitor to steal our best customers. Take it from me, don’t hold back with anyone and understand each new hire represents your company to the world.


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