As an essential part of performance management, performance appraisal has become widely accepted all over the world. Performance appraisal is an opportunity for individual employees and those concerned with their performance, typically line managers, to engage in a dialogue about their performance and development, as well as the support required from the manager. Generally, performance appraisal is framed according to company’s business strategy and HR strategy. What and how employees are expected to perform in different time periods should be presented in the frame of performance appraisal. Basically, five elements of appraisal process are measurement, feedback, positive reinforcement, exchange of views and agreement. There are mainly two measures in evaluating performance, quantitative and qualitative. Quantitative methods express their results in numbers and statistics. Questions are constructed mainly concerning “how many”, “how much” or “how often”. This method means that everyone is measured by the same standard. Qualitative methods gather information that cannot easily be measured by numbers. Qualitative data is typically descriptive data and present more in a narrative than a numerical form, such as individual interviews and meetings. Both methods collect data to serve HR planning, managerial control and employee engagement.
Performance appraisals are essential for the effective management and evaluation of staff. It is a two way process, not just objective setting through performance appraisal and development review, but at individual level, a “performance chart” or “career progression matrix”. From the point of organizations, formal performance appraisals are generally conducted annually for all staff in the organization. Each staff member is appraised by their line manager. Annual performance appraisals enable management and monitoring of standards, agreeing expectations and objectives, and delegation of responsibilities and tasks. Staff performance appraisals also establish individual training needs and enable organizational training needs analysis and planning. Performance appraisals also typically feed into organizational annual pay and grading reviews, which commonly also coincides with the business planning for the next trading year. Performance appraisals generally review each individual's performance against objectives and standards for the trading year, agreed at the previous appraisal meeting. From the point of appraisees, performance appraisal is beneficial for their career development. It is essential for employees for career and succession planning. Appraisees can have opportunities to review their work and make better work plan in the next year according to the advice from supervisions. Performance appraisals are important for