5 Must-Have Features of an Effective Performance Appraisal System

5 essential features of an effective performance appraisal system


December 21st, 2018 Performance Management  

Successful businesses understand the value of investing in a robust performance appraisal system. That’s because they reap the benefits of employees who have regular and fruitful performance conversations with their line manager, understand their strengths and opportunities for improvement, and are more effective and motivated in their roles. The right performance appraisal software can make this process simpler and more useful for everyone.

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What is a performance appraisal system?

A performance appraisal system manages the employee performance process of an organization to evaluate the job performance of a team. It includes capturing qualitative and quantitative feedback and turning them into actionable insights. These insights can improve the quality of the team and the output by setting and monitoring goals.

What are the 5 types of performance appraisal systems?

Since there are several variations of evaluation systems on the market, it’s essential to choose a performance appraisal software that is in tune with your business.

1. General appraisal

This performance appraisal system covers the main elements of a traditional performance management process. As part of this process, there is usually an annual performance meeting between management and team members to discuss performance and overall contribution towards the company’s success during the review period.

2. 360-degree appraisal

This type of performance appraisal system focuses on gathering feedback on an employee’s performance from different stakeholders across the organization, and sometimes, from external individuals. This is usually made up of input from the line manager, peers, subordinates or direct reports (if applicable), clients, customers, or third-party partnerships. This type of system can be a useful way to receive unbiased, specific, and well-rounded feedback on an employee’s performance from different perspectives.

3. Employee self-assessment

This is a performance appraisal system that is driven by the employees. Staff are central to the process, as they deliver an assessment of their performance, using evidence to back up their conclusions. While this system can be open to inconsistency, it can also be an excellent way for employees to take significant responsibility and accountability for their performance successes and improvement opportunities.

4. Manager performance appraisal (by objectives)

Key to this type of performance appraisal system is the set of specific goals that should be linked both to the employee’s job role and to your organization’s overarching business strategy. The main elements of these systems are usually the setting of goals, subsequent progress, and achievement against said goals and employee scores or ratings, given by their manager.

5. Psychological appraisal

Businesses that use psychological appraisals have a much stronger focus on an employee’s potential for the future than on their past performance. A talent management process is usually at the heart of this type of performance management system. It aims to identify individuals with skills and attributes that could contribute to future business success and reward and provide promotional opportunities accordingly.

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5 features you should look for in a performance appraisal system

A good performance appraisal system software does a lot of good things for your organization. It lets you automate your performance appraisals and serves as a platform to receive continuous feedback by saving the time and effort of HR managers.

Here are some of the features you should be looking for when choosing your performance appraisal software.

1. Thorough performance reviews

Performance Management Software should let you set up and track goals, rate job performance, get insights into each employee’s performance.

2. Performance appraisals on the go.

A good performance appraisal system lets you to conduct reviews on the go. A cloud-based system lets you to access the software anywhere you are and get work done.

3. Customizable as per your needs.

A Performance appraisal system should let you streamline the performance management process as per your business requirements. Customize the workflow, configure multi-level appraisals, approvals and remainders.

4. Integrate with other HR tools

Instead of a standalone performance appraisal system, you should look for a system which lets you integrate with other hr apps like feedback, on-boarding, off-boarding, payrolls, etc.

5. Gather 360 feedback

Get an in-depth evaluation of an employee’s engagement and performance by setting up team-wide or company-wide 360-degree feedback.

What’s the best way to structure a performance appraisal form?

A good performance appraisal form is a vital tool in the performance appraisal process. It’s essential that it is clear and easy to use, as well as easily adaptable so that it can be tailored to different employees’ roles.

While an organization’s performance appraisal form may differ depending on the specific industry that it is in, there are a few key elements that should be included in the form as standard.

First, there should be sections to identify and document your coworkers’ strengths and areas that need improvement. Lists of skills or character traits are generally not sufficient here – instead, the form should provide an opportunity to document background information, such as evidence and feedback, as well as provide specific support on how to improve areas of weakness in the future.

As many companies use scores or ratings as part of their performance appraisal system, the appraisal form should include a section to calculate this. Various factors could be scored, depending on job role and industry, but ratings should ideally be consistent across job roles for objectivity.

Automating performance appraisal system using Kissflow HR Cloud

In Kissflow, you can customize your own employee performance appraisal software. Simply install the template to configure the perfect app for all your needs, regardless of the size of your organization.

After installing the template, users can choose the fields that they need to carry out the appraisal to fully customize it to the performance appraisal system of their business. The auto-population feature is a useful time-saver for managers and employees. It gives individuals the ability to tailor the process workflow (for example, from the HR team to the line manager, to the employee), and set user permissions that offer maximum flexibility for users.


An organization’s performance appraisal method is often unique to its culture. Therefore, choosing a system that offers the range of features that it needs (and doing so in a customizable format) can be a challenge. However, saving time and valuable resources by investing in a suitable performance appraisal system for your business is undoubtedly worth the challenge.

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