What is performance appraisal?

Performance appraisal is the process of giving feedback to employees on how they are performing their tasks.  As one of the most important management tools, performance appraisal can really help employees identify areas of strength as well as improvement.

There are essentially two ways of approaching performance appraisal.   Each one involves the role of the manager or supervisor and what sort of relationship they have with the employees they are managing.

The traditional approach to performance appraisal involves a manager-centric method, where the manager observes, evaluates and communicates to the employee.  There is not much participation on the part of the employee.

Performance appraisal can also be a negotiated method, where the manager acts more like a coach and has two-way conversation with the employee.  This actually helps the employee take more responsibility for their own improvement, which the employee checks with the manager.

It is important to consider that different cultures have certain preferences for the different approaches.  More hierarchical cultures, like the Japanese, Chinese and Arabic, prefer the traditional method, whereas flatter, more egalitarian cultures like the U.S. and Canada are adopting more of the negotiated method.  This, of course, also depends on a company’s organizational culture.