Develop a vibrant and effective performance appraisal system to improve the organizational behavior.

7 steps for developing a performance appraisal system

Nowadays, almost every renowned firm or a corporation has its very own system of doing the performance appraisal of the employees and the workers. It is now considered to be a critical part of an organization’s culture or the environment. If a company has no performance appraisal system, they should be looking to develop one for their employees and workers.


Following are some important steps that the managers or bosses should when they develop a proper appraisal system for the employees. The performance evaluation should be prepared in a way to be easily communicable and understood by the designated people in the organization

Step 1 – Evaluating the current performance appraisal system (if any)

If the organization already has a system, it should review it first to analyze the problems and difficulties faced by the employees or the organization. From here, the managers should draw the plan to make the new performance evaluation system.

Step 2 – Identifying the goals of the organization

The goals and objectives must be very clear when the performance appraisal system is developed in the group. The required solution or benefits should come from the assessment system.

Step 3 – Setting the performance expectations

It is a significant step. The managers should be unbiased and be able to jot down the optimal but not unrealistic performance goals for the employees. The goals will be the benchmark by which the employee performance will be analyzed and appraised in the future.

Step 4 – Setting the guidelines for providing the feedback

There should be clear guidelines that should be followed when feedback or comment is passed on to an employee. It should be according to the organization’s culture and ethical values.

Step 5 – Creating a disciplinary or termination procedure

Such codes are not communicated through verbal or written matter, in fact, they are developed and communicated to the employees through common sense, values of the organization and action of the leading managers.

Step 6 – Evaluation of the worker’s performance

The assessment is not useful when it’s done once after an extended period; it is an active process. The performance of employees is to be evaluated on a basis well-documented data and day to day operations.

Step 7 – Providing the feedback

In the final step, the feedback is given to employees, and it should be competent enough to point out the best elements of the person and help them finding their problems and improvements required.