GCSE / Level 2 Revision Notes

People management - Appraisal

A key task of management is to identify how employees in the firm are performing and what is required to ensure that employee performance supports the objectives of the business.

Most businesses operate some kind of performance review or appraisal system.  This might be relatively informal (particularly in smaller businesses).  Large and more complex businesses tend to operate formal and structured appraisal systems.

The word appraisal implies making a judgement about how well an employee is doing.  However, the appraisal process needs to be more than simply scoring or judging past performance.  It needs to look forward too.

A suitable appraisal system appraisal can help employees feel that their good work is recognised and that they are valued. It can also provide the opportunity to discuss any weaknesses or problems they may have, and to come up with solutions.
There are four key elements to effective employee appraisal;

1. Set objectives - decide what is needed from employees and agree these objectives with them. If appropriate, set timescales for achieving them.
2. Manage performance - give employees the tools, resources and training they need to perform well. If appropriate, set timescales for achieving objectives.
3. Carry out the appraisal - monitor and assess employees' performance, discuss those assessments with them and agree on future objectives.
4. Provide rewards/remedies - consider pay awards and/or promotion based on the appraisal and decide how to tackle poor performance.