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Discover the 5 Key Elements of a Performance Appraisal System

Performance appraisal is an integral part of HR functions in most organisations because it determines the growth of the employees in an organisation. Given below are the key elements of a performance appraisal system.

The purpose of the performance appraisal system is to ensure that every employee gets their due when it comes to being rewarded for their efforts and good performance. In the absence of a systematic performance appraisal system, there would be a lot of chaos and confusion regarding the appraisal given to the employees. This would in turn adversely affect the employee morale of the organisation.

98% businesses believe performance assessment is important, only 64% say they have an effective approach to it. -Forbes 

With the advent of automated HR software like digital HRMS, wallet HRMS, beehive HRMS and the likes, Enterprises across the globe are investing in software to automate every HR process, including the performance appraisal system. With automation introduced, there have been several positive changes, with the entire process becoming easier and error free.

However, in order to understand the role played by performance appraisal system, one must be aware of the components.


1] More Power to The Employee 

More power to the employee implies that the employees have the power to apply for appraisal through a simple and transparent process. Digital HRMS, for example, allows the employees to fill the appraisal forms based on certain criteria and then submit the forms for further approval.


2] Correct Set of Parameters 

Appraisals can be successful only if there are the right set of parameters in the picture. Hence, the most important step in performance appraisal is defining the parameters that would be used to define the performance employee. Goal setting, employee ratings, progress tracking, etc., are all part of this step.


3] 360 Degree Appraisal Method

The 360 degree appraisal method is a method of performance assessment that involves taking feedback on the employees performance, not just from the reporting managers alone, but also from different stakeholders who have interacted or worked with the employee over the particular time period. The biggest advantage of this approach is that it often brings unbiased viewpoint about the employees performance and general behaviour in the office.


4] Motivation with Rewards and recognitions 

It's normal human psychology to be motivated with awards and recognitions, irrespective of the age. Employees all human beings after all and they are motivated by awards and recognitions, which help them find a good reason to give their best and achieve the best in life.


5] Planning to Boost Performance 

Continuous improvement is the biggest motivator in life and this holds true for employees working in the modern corporate sector as well. The purpose of performance appraisal system should not just be assessing the performance, but also the focusing on ways to bring improvement in the employee in different aspects. Easiest way to achieve this is to conduct skill-based training programmes that can help the employees acquire the knowledge or skill they need in order to become successful.


The performance appraisal system does have a great role to play in the modern corporate world. If implemented correctlyFind Article, it can go a long way in boosting employee morale and keeping the employees motivated to achieve more and to give the best in their day to day tasks.

Source: Free Articles from


Elise Lowry is a technical writer and a web entrepreneur with many years of experience. She regularly blogs about rising IT companies, path breaking IT solutions, current IT trends and much more. Understanding how technology affects the world we live in, is her subject of interest.

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