Performance appraisals serve as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future.

Here are 4 reasons why you need performance appraisals for your company:

• Nurture Star Employees

Hopefully, you view performance reviews first as a place to congratulate and thank your employees for the work they do for you. Performance reviews are a handy tool to help you figure our when an employee is meeting or exceeding expectations and whether he or she is ready to assume a greater share of responsibility within the company.

Picture this: you have a promotion up for grabs, but you have four employees vying to snag it. Looking over past performance reviews can help illuminate which one of those employees might be the best fit for a promotion this time around.

• Get Your Money’s Worth

Employees that are loyal to a company will have an ever-expanding set of skills making them invaluable. Of course, employees want to be compensated for the value they bring to an organization and the organization wants to make sure it’s investing in its top talent with salary bumps or even bonuses.

Performance reviews can make this murky area a little clearer by offering objective insight into how and when to reward employees for their skill and value.

• Groom Employees for Success

Performance reviews are also a space for both managers and employees to point out any gaps in training. Whether an employee’s performance is lagging behind because of the quality of training he or she received or whether the employee wants to take on additional training to prepare for future advancement within the company, this is a perfect time to talk about company goals and visions and make sure that everyone is on the same page and to plan for future training sessions as necessary.

• Polish Bad Apples

This is the least fun number on this least, but not the least rewarding. In a perfect world, every employee would come to work on time, motivated, with boundless enthusiasm and energy, and try to excel in every task, but in the real world, that’s just not the case. If worst comes to worst, performance reviews can be a life (and litigation) saver if a terminated employee retaliates.

It’ll be easier to prove employee negligence, disobedience, harassment, or even criminal behavior later with a well-documented paper trail of the employee’s actions.

Tips To Make Performance Reviews Work For You (And Your Employees)

• Performance reviews structured to be as brief as possible have no depth or specificity to bring value to either the employer or the employee. Providing explicit examples of either good or bad conduct will help maintain or improve performance.
• Be well prepared.
• Related to the first piece of advice, invest in the time needed to properly prepare for a performance review. If you have more than one employee to review, stagger them so you can give each employee the attention he or she deserves.
• Be persistent-Reviews shouldn’t be over once they’re over. Follow up on the goals you and your employee set during the meeting, keep HR in the loop and continue to offer feedback.

Performance Appraisals Can Be Powerful Tools

Work environments can be busy, high-stress places so there’s no need to add any nagging worries about performance, which opens up the path for employees to reach their true potential. Performance reviews can give employees the space to know they’re doing well, meeting their goals, and making progress on their career paths.

When used correctly, performance reviews create a strong line of communication between manager and employee that stays open to update on progress, offer congratulations, tweak performance issues, and improve workplace morale.

Note: Wondering where to start? At Brites Management Services we can help your company kick start the performance management system by putting all measures in place including a performance management policy, appraisal tools, formulating JDs and KPIs, Job Grading and Salary Reviews, Training needs and Reward system. Contact us today.