That’s the percentage of HR leaders who agreed that ongoing check-ins and peer feedback are key aspects of organizational success. Yes, that’s how important it is to conduct regular employee performance reviews in your organization. Performance appraisal is the most valuable way to measure your employees’ performance accurately. It gives the perfect opportunity to reflect on your employees’ careers and the organization’s future.
However, the process of conducting performance appraisal won’t be completed without the help of an appraisal letter, right? And if you already planned to write an appraisal letter, then you’ve come to the right place. This comprehensive guide on appraisal letter will help you to learn more about the value of it.
What is Employee Performance Appraisal
We are living in an uncertain and competitive environment. And to thrive in this uncertainty, companies have to provide excellent performance. The main key to providing excellent performance is employees. Employees are responsible for delivering exceptional service and satisfying their customers. Especially now, a brand’s authenticity, values, and overall experience matter the most than products.
So, as a business owner, HR, or team manager, your duty is to give an excellent employee experience. If your employees are feeling happy within your organization, they will deliver exceptional service.
And, this is where performance appraisal comes into the picture. Performance appraisal is a periodic review of your employees’ work performance and overall contribution to your company. The performance review includes the organization’s core competencies and employees’ job-specific competencies. Performance appraisal, also known as annual performance assessment, is meant to evaluate your employees’ growth, skillset, achievement, and weaknesses.
Several companies conduct performance appraisals for giving constructive feedback on their work. This gives you a chance to justify why you’re promoting an employee or decided to terminate someone. With the help of online employee feedback software, you can easily assess your employees’ performance annually, quarterly, and semi-annually.
Performance appraisals also allow your employees and manager to create a plan for employee training and development. However, performance appraisals are not the only method to communicate with your employees. You can continue communicating with your employees about their feedback and performances through online surveys. This will help to keep the entire organization on the same page.
Performance appraisal has a close connection with the appraisal letter. It also helps to evaluate your employee’s performances within a company. There’s more you should know about the appraisal letter to use it effectively. So, keep patience, and read on.
How Different Companies have Used Employee Performance Appraisal
If you want to motivate your managers to conduct performance appraisal, then here’s some inspiration:
In 2012, a Minneapolis-based food distributor and producer company named Cargill, introduced us to the “Everyday Performance Management” system. The system was designed to implement feedback, motivation, and encouragement in everyday conversations. And the result? Well, the company witnessed notable improvements after giving daily constructive feedback to their employees.
Here’s how we use our very own performance appraisal software to conduct performance appraisal across the organization..
To create similar employee experience surveys, you can sign up on SurveySparrow for free.
Facebook is widely popular for its employee-centric decisions. Fun-to-work environment, and great employee benefits. Like many companies, Facebook conducts annual reviews, peer to peer feedback surveys, to get a clear idea about their employees’ performance.
Another tech giant Microsoft keeps its employees upgraded with the help of performance reviews, formal check-ins, managers reports, etc. Just like Facebook and Microsoft, Goldman Sachs’ performance management system focuses on ratings, annual reviews, and ranking, to determine the strengths of their employees.
What is an Appraisal Letter?
Just like performance appraisal assessment, appraisal letters review the performances of your employees. The letter gives a written proof that employers have noticed the contribution of employees. The letter also explores the strengths and weaknesses of employees and provides rich insights.
Appraisal letter reflects the hard work of employees and enhances their morale. In the letter, you can write about your employees’ past salary and recent hike, if there’s any. The basic highlights that every appraisal letter should have are the name and contact of the employees. It also includes your employee’s designation and salary. Let’s discuss more on what to include in an appraisal letter in the next point-
What is the Ideal Appraisal Letter Format?
If you are planning to write appraisal letters for your workforce, these are the steps you can follow:
- You may already know that every professional office letter must include the company’s letterhead. Including your company’s name, logo can help you to showcase your brand’s identity. This helps to assure your employees that your letter is genuine, and it’s for business purposes only.
- Your employees’ name is probably the most obvious thing you should include in the appraisal letter. Since your employees’ names will be on the letter, you can conduct the delivery and storage task easily.
- An ideal employee performance appraisal letter must begin with a statement, indicating the letter’s purpose. So, if you want to gauge the work performance, mention that at the beginning of the letter. The beginning statement will inform your employees about what to expect from the letter.
- Also, it’s necessary to mention the time period covered by the performance evaluation. From the time, your employees will know exactly when your team monitored their performance. And this information is crucial for your employees, as they can judge their performance from their own perspectives.
- New employees may get confused about the context of receiving an appraisal letter. That’s why you must include a list of criteria in the letter. The criteria will help them understand on what basis you appraised someone and graded their performances. For instance, if you decided to praise your employees based on productivity, engagement, and work ethics, you can mention these factors in the letter.
- After finishing the letter, you must include some future benefits and bonus programs to encourage them. Let’s say; you want to praise your employees for good work morale, mention some of the benefits you provide to employees with high-morales. This will keep them engaged at work. Also, show support for the low-performance employees. You can share some plans or feedback to help them improve their weaknesses.
- Finally, an ideal appraisal letter should provide a clear, frank, and insightful objective. From this, employees will know exactly what the company expects from them and how they can work efficiently to achieve success.
We’ll give you a sample of the appraisal letter later in this post. However, you can’t write an appraisal letter without knowing its different types and methods. So, what’s the wait? Scroll down to learn more…
Different Types of Performance Appraisals
The objective of any appraisal is similar in most companies. The main difference you’ll notice is, each company uses different types of performance appraisal to praise their hardworking employees. So, let’s take a quick look at the different types of performance appraisal:
1. Self Appraisal
Self-appraisal is a personal judgment of an individual employee. Sometimes it’s better to let your employees have their own assessment. This assessment will give them clarity about their strength and contribution to the work. Self-appraisal not only reduces the dependency on managers but also helps your employees take charge of their own careers.
A perfect self-appraisal letter will highlight the key accomplishments of the employee. Employees must include proper data to showcase their achievements. A self-appraisal letter should also include an outline of goals and plans for their future improvement.
For example, if you plan to increase your business’s digital presence, your employees can send you self-appraisal letters. In this appraisal letter, they can mention their strengths and why they are best for taking responsibility.
2. Manager Performance Appraisal
By the name probably you’ve already realized that this performance appraisal is conducted by the manager. Managers measure the employees’ performance based on their observations. The manager measures yearly performances based on the success and challenges faced by an employee. This appraisal allows your employees to communicate with managers and improve their overall performance.
3. The 360-Degree appraisal
The 360-degree assessment is one of the most effective appraisal types to write the appraisal letter. In this appraisal, your employees’ performance gets reviewed by all of the people in your organization. From the superiors, managers, subordinates, to colleagues, everyone can provide anonymous feedback about the performance.
In short, 360-degree appraisals lets you evaluate your employees based on every individual in your company. Mostly you can measure their leadership skills, competencies, and behavior with other office members. The main focus of 360-degree feedback is to improve your employees’ people management skills rather than targeting annual performance.
Different Methods of Performance Appraisals
Before writing the appraisal letter, companies use various methods to measure their employees’ performance. Here we’ve mentioned the most common methods:
The Rating Scale Method
The rating scale is a systematic review method that measures employee performance based on their potential and overall performance. The Rating scale rates employees on a scale from 1 to 10 on different aspects like accountability, regularity, and achievements. The Rating scale method is convenient and less time-consuming.
The ranking method mostly used to evaluate and compare employees’ performance with their coworkers. If you want to identify who is the best and worst employee in your workforce, you can use this method. In this method, you can categorize your employees in different adjectives like excellent, good, average, poor, and very poor, based on their overall performances.
360-Degree Feedback Method
As we mentioned earlier, 360-degree feedback not only shares the manager’s feedback but also from every member of your workforce. 360-degree feedback helps you to get real-time data on your employees. You can use SurveySparrow’s 360-degree feedback software to evaluate your employee performance effectively. From myriads of pre-made themes, customized survey taking experience, you can get it all from this tool.
However, to give you a basic idea about an appraisal letter, here’s a sample for you:
Your Company Name/ Letterhead
Name of Your Company
On behalf of our xxx company, we are pleased to inform you that there is an increment on your remuneration.
We’ve noticed your dedication and contribution to our organization. And we would like to inform you that your performance rating for year 20xx-20xx is ____________. From now on, your annual remuneration has been revised to ____________.
Keep up the good work and exceptional performance!
Some Easy Tips to Write a Stellar Performance Appraisals Letter
Writing an appraisal letter isn’t a walk in the park. It may seem easy at first, but accurately evaluating your employees’ performance and delivering the information requires a lot of practice.
In case you’re going to write an appraisal letter for the first time; these five tips will definitely help you out.
Start the Letter on a Positive Note
Whether you’re writing a letter to the best employee or the worst one, always begin the letter on a positive note. Every person has a positive side; start by addressing their positive aspects to encourage them. If you write a generic letter without mentioning your employees’ best aspects, they’ll feel neglected by the organization.
Address the Success
Your appraisal letter should address employees’ successes. If they managed to complete a goal, mention it in the letter. You don’t have to overdo it with long, boring sentences. Just evaluate each successful goal using simple and short sentences.
For example, talk about how an employee achieved a certain goal, how it helped the company, whether the employee performed well or badly, etc. Addressing past achievements will inspire your employees to work hard and set new goals.
Address the Failure
Just like you mentioned the success in the appraisal letter, failure must be appreciated too. Pointing out mistakes and failures will provide motivation for the future. Don’t express harshness while addressing the failure. Ensure you are fair while writing this part. If your employee couldn’t meet a goal because of their circumstances or any other issue, don’t stress too much about that part in the letter.
For example, if one of your employees failed to perform better due to medical issues, you should mention that. Your goal should be to motivate them to work hard next time, and these failures are attainable and not impossible. Being fair in the letter only brings positivity to your organization.
Provide Constructive Feedback
At the end of the appraisal letter, you should provide constructive feedback to your employees. You can suggest to them how they can bring change in their performance. Exactly where your employee failed to deliver a good performance and how they can fix it. Just praising or only criticizing your employees won’t help them learn from their experience. You should maintain a balance between both the negative and positive feedback constructively to push them to do better.
Following these tips, you can provide clarity and motivation to your employee. So, initiate a meeting with your manager, asap, to measure your employees’ performance.
On a Final Note…
One size doesn’t fit for all! Instead of blindly following any appraisal method, try and test each one of them. Start by implementing 360-degree software to track your employees’ performance and create appraisal letters based on that. Appraisal letters align your employee performance, expect, and goals with the company. It opens a door for the employees to improve personally and professionally as well.
Lastly, the importance of listening to your employees will never go out of fashion. When you put attention to your employees’ performance, activities, and problems, they feel connected with the work. And, an appraisal is perfect for showing your employees that you genuinely care about them.
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