If you are a regular reader of this blog, you know that we often discuss different methods of doing performance appraisals. However, if you are new here, we will catch you up to speed.

Let’s say that you are a CEO of a ten person company. You pretty much know everybody very well. So when it comes time to decide who will receive a pay increase, who will receive some further training and education, or who is not performing their job to the best of their abilities, you know exactly what to do.

You know these people, you see them all every day. However, let’s look at a different scenario.

Imagine that you are a CEO or a manager in a big company with hundreds of employees. When it comes time to make all of those important decisions, you will be clueless.

You don’t know these people, and making a fair assessment based on nothing but your opinion is almost impossible.

So smart Human Resources managers developed certain techniques and methodologies called performance appraisal. These methods allow a person to fully and efficiently evaluate an employee’s performance.

This will allow you to make certain business decisions in a higher quality way. Determining pay increases, educational trainings etc. will no longer be a problem and a challenge for you.

At the end of the day, the point of performance appraisals is performance improvement.

When should performance appraisals be conducted?

The industry standard for a lot of companies is once a year. However, annual testing gets a lot of criticism from HR experts. Many of them claim (and some studies have even showed), that more frequent evaluations lead to more positive results.

So depending on the size of your company and your resources, you could do them twice a year, every quarter etc. Some companies even do weekly assessments on different categories.

Now that you know what performance appraisals are, you might be interested in some of the methods that are regularly used in performance appraisals. Check out our other article Performance Appraisal Methods.