Performance appraisals are a management-evaluation process that provides feedback on employee performance. This evaluation and documentation of employee performance provides a basis for merit raises and promotions.
- Performance appraisals include written and oral feedback that should provide employees with specific steps to improve their performance.
- Performance appraisals can also serve the purpose of clarifying job responsibilities, improving communication between superiors and subordinates, and providing evidence of an organization's commitment to developing employees.
- Linking merit raises with performance appraisals gives the evaluation process immediate validity and significance, while also increasing the reliability and objectivity of managerial decisions on promotions and pay raises.
- Performance appraisals are often resented by employees because they are commonly used to objectively build a case to terminate an employee; linking raises and promotions with employee appraisals decreases this resentment.
- Any source or evidence of rater bias in employee appraisals will counteract all the goals and benefits of performance appraisals and can result in employee backlash, especially when the process is tied to merit raises.
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