An appraisal letter acknowledges the contribution and reviews the performance of an employee during a calendar year.
89%. That’s how many HR leaders agree that regular employee performance reviews are key to organizational success.
However, a performance appraisal won’t be complete without an appraisal letter, right? And if you plan to write an appraisal letter, then you’ve come to the right place.
In this guide, we will:
- Discuss everything you need to know about appraisal letters.
- Set out an appraisal letter sample and format for you.
- Learn how to write an appraisal letter (with a free template)
- Check out some tips to write a stellar performance appraisal letter.
What is an Appraisal Letter?
Just like a performance appraisal assessment, appraisal letters review the performances of your employees.
The letter is 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.
In short, an 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. However, the basic highlights that every appraisal letter should have are the name and contact of the employee. Also, it should include your employee’s designation and salary.
Appraisal Letter Format
Your Company Name/ Letterhead
- Appraisal Date
- Employee Details
- Name of Your Company
On behalf of our xxx company, we are pleased to inform you that there is an increment in 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!
Now let’s make a sample appraisal letter using this format.
Appraisal Letter Sample
Palo Alto, California
On behalf of our company, we are pleased to inform you that there is an increment in your remuneration.
We’ve noticed your dedication and contribution to our organization. And we would like to inform you that your performance rating for years 2021-2022 is 5. From now on, your annual remuneration has been revised to $xx,xxxx.
Keep up the good work and exceptional performance!
How to Write an Appraisal Letter?
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. This helps to assure your employees that your letter is genuine.
- Next, your employees’ name is the most obvious thing to include in the appraisal letter. That also makes it easier to deliver and store.
- An ideal employee performance appraisal letter must begin with a statement of the letter’s purpose. So, if you want to discuss work performance, mention that first. That will let your employee know what to expect.
- Also, mention the time period that the evaluation will cover. This information is crucial for your employees. It gives them context for judging their performance and is a benchmark for progress.
- New employees may get confused about the context of an appraisal letter. So include a list of criteria in the letter. That will help them understand on what basis you appraised their performance. For instance, if you decided to appraise your employees based on productivity and work ethics, you can mention these factors in the letter.
- In the end, you can include future benefits and bonus programs. Let’s say you want to praise your employees for high morale. You can talk about the employee rewards for a good professional attitude, like a “Morale Booster of the Month” award or something like that. This will improve employee engagement at work.
- Also, show support for the low-performing employees along with plans or feedback to help them with their problem areas.
- Finally, an ideal appraisal letter has a clear and insightful objective. From this, employees will know exactly what the company expects from them.
To get a clear and insightful objective..
..It’s best to use a review form that is designed to get clear information on where the employee needs to improve. This is easy to do if your team is small.
But scheduling reviews for bigger, diverse groups, like a 100+ people, who work on a bunch of different tasks is a different challenge altogether – one that causes time lags between reviews and results.
In this case, a digital, customizable, and shareable survey template might make your job easier. For example, check out this Employee Performance Review template by SurveySparrow.
Thinking “this might be useful”? Sign up below. You’ll get the template, a free account, and 14-day access to all of our features for improving employee experience.
14-Day Free Trial • No Credit Card Required • No Strings Attached
14-Day Free Trial • No Credit Card Required • No Strings Attached
Some Easy Tips to Write a Stellar Performance Appraisal Letter
Writing an appraisal letter isn’t a walk in the park even though it may seem easy at first. But accurately evaluating your employees’ performance and delivering the information requires 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
- Address the Success
- Address the Failure
- Provide Constructive Feedback
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 be harsh 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 because these setbacks are temporary.
Being fair in the letter only brings positivity to your team.
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 changes in their performance.
Be specific; mention exactly where your employee failed to deliver and how they can fix it.
Just praising or criticizing your employees won’t help them learn from their experience. You should maintain a balance between both the negative and positive feedback 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.
However, you can’t write an appraisal letter without knowing its different types and methods.
Different Types of Performance Appraisals
The objective of any appraisal is similar in most companies. The difference is in the way the employee performance is scrutinized. Let’s look at the types of performance appraisals:
What is meant by self-appraisal? It is a type of appraisal where the employee evaluates their own performance.
This assessment allows them to reflect on their contributions to work. What’s more, self-evaluation reduces the dependency on managers and helps your employees take charge of their own careers.
A perfect self-appraisal letter will highlight the key accomplishments of the employee. However, employees must include proper data to showcase their achievements so keeping a record of your work is critical. Check out the 6 key steps to writing a great self-evaluation.
Additionally, a self-appraisal letter should also include an outline of future goals and plans for improvement. Ideally, this should be linked to company goals. For example, if you plan to increase your business’s digital presence, your staff’s self-appraisal letters ought to include goals that are related to this (especially if they are in the marketing team!).
2. Manager Performance Appraisal
By the name you’ve already, probably, realized that this performance appraisal is by the manager. Managers measure the employees’ performance based on their observations.
Manager performance appraisals measure performances yearly or quarterly based on the employee’s wins and challenges. This appraisal creates an open dialogue between your employees and managers and helps improve their overall performance.
3. The 360-Degree Appraisal
The 360-degree assessment is one of the most effective appraisal types for the appraisal letter. In this appraisal, your employee’s performance is reviewed by all of the people they work with.
From the superiors and managers to subordinates and colleagues, everyone can provide anonymous feedback about the performance.
In short, 360-degree appraisals lets you evaluate your employees from multiple angles. Through a 360 Review, it is possible to measure them for key skills like leadership, teamwork, communication, culture fit, and more.
The main focus of 360-degree feedback is to help your employees grow as professionals rather than solely targeting annual performance.
Different Methods of Performance Appraisals
Here, we listed 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 advantage of the rating scale method is that it is convenient and less time-consuming.
The Ranking Method
The ranking method is mostly used to evaluate and compare employees’ performance with their coworkers.
If you want to identify who is the best and lowest-performing employee in your workforce, you can use the ranking method.
In this method, you can categorize your employees according to different parameters like excellent, good, average, poor, and very poor, based on their overall performances.
The 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.
SurveySparrow’s 360-degree feedback software helps you to evaluate and track your employee performance effectively. From myriads of pre-made themes to a customized survey-taking experience to real-time reports, you will get it all from this tool. You can create a free account to get unrestricted access to all of these features for 14 days.
On a Final Note
One size doesn’t fit all! Instead of blindly following any appraisal method, try and test each one of them. You can 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 pay attention to your employees’ performance, activities, and problems, they feel connected to their work. And, an appraisal is perfect for showing your employees that you genuinely care about them.