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Appraisal Letter – Format, Meaning, Writing Tips, and Example

March 25, 2022
HR Toolkit
Appraisal Letter

Do you have performance appraisals coming nearer in your organization? Are you confused about what to do? Don’t worry!! Here in this blog, we will discuss everything about the Performance Appraisal from meaning to objective, tips to write an appraisal letter, types, methods, samples, and examples.

Let’s get started!!

What is Performance Appraisal?

When we stand in a highly competitive environment, we aim to stand out with high-quality performances. On a timely basis, organizations conduct appraisals to evaluate the performance of the employees and the company. Performance appraisal basically is the annual review of the employees to assess their performance in their job and their contribution to the organization.

Performance Appraisal is also known as Employee Appraisal is done for evaluating the skills, performance, growth, and shortcomings of the employees. Companies use appraisals as a source to provide general feedback and justify salary increments, promotions, and demotions. To confirm the appraisals to the employees, organizations provide them with the appraisal letters.

Do you want to know What Appraisal Letters are? Read further to know more.

What is an Appraisal Letter?

An appreciation letter is a written document in which the employer acknowledges that the employee’s contribution to the company has been recognized. In other words, it is a reflection of their hard effort, and the result boosts their morale.

This letter identifies an employee’s strengths and faults while also providing useful information. It also helps in determining which areas an employee excelled in and what abilities they need to develop in order to perform better during the following appraisal cycle. If you do not know how to write a letter of appreciation, various HRMS Softwares provide ready-to-use templates for your convenience.

What are the Objectives of an Appraisal Letter?

The main purpose of an Appreciation letter is to evaluate the performance of the employees and reward the deserving person in the organization. Moreover, it also aims to enhance the overall performance of the company. Also, it encourages the employees to set new goals for the next appraisal period.

Additionally, the company employers can also use this letter to identify where the employees performed well and what skills they need to work on during the next appraisal period. The other objective of the appreciation letter is to help both the employers and employees plan their future goals.

Employee Appraisal letters usually produce the best results. Everything should be evaluated verbally during the arranged meeting with the responsible manager to discuss staff improvements and your input as an employer. After the meeting, your employees should feel valued and significant, and this should contribute to the organization’s overall effectiveness.

Now that you know what an appraisal letter is and what is its purpose, it is important to know how to write the same. Follow the blog and you will know how to write an effective letter.

How to Write an Appraisal Letter?

An appreciation letter provides motivation and clarity to the employee. However, to write an effective letter of appreciation, ensure following the below-writing tips.

  • Since this letter is an official document for the employees, it should be generated on the company’s letterhead.
  • Always remember to start the letter by honestly praising the employee, their work, and accomplishments during the appraisal period. While you are praising the employee, keep the tone professional and polite.
  • If it is possible to write the employees’ noteworthy accomplishments in the letter, do that. However, just keep it crisp.
  • Mention the employees’ details in the letter like their new salary, increment, revised CTC, and the effective date of the appraisal.
  • Also do not forget to mention if the employee has received any bonus or promotion.
  • You can spend some time at the end of the letter providing constructive comments based on the employee’s performance during the cycle. So that the employee can work on it, the feedback must be detailed and understandable.
  • Finally, summarize what the employee is expected to do in the future in the letter. This section should be brief and to the point. It is preferable to discuss expectations in person.
  • In the end, always mention that the company looks forward to working with the employee in the future.

Since performance appraisal is very crucial for the organization, you must know how many types and methods of performance appraisals are there. So, moving further there are three types of appraisals namely self-appraisal, 360-degree appraisal, and manager performance appraisal. Continue reading to know more exciting facts about the Appraisal letters.

Types of Performance Appraisals

1. Self-Appraisal

Self-appraisal, as the name suggests, is the process of reviewing your own performance throughout the appraisal cycle. Many companies believe that this is the best way to make their employees realize their own worth, significance, or status. This method helps companies to remove some reliance on the managers.

2. The 360-degree Appraisal

360-degree feedback is a method in which not only your supervisor evaluates you, but also your direct reports, peers, and occasionally even consumers. You’ll get an evaluation of how you see yourself and how others see you.

3. Manager Performance Appraisal

Performance Appraisal is the point at which the manager does the appraisal based on his or her own observations. Manager appraisals are typically the most extensive type of appraisal, combining self-appraisal and 360-degree appraisal techniques. It’s a good appraisal method because it leaves no room for ambiguity and allows for an open dialogue between your employee and the reporting management.

Appointment Letter – Format, Example, & Meaning

Performance Appraisal Methods

1. Rating Scale Method

The rating scale method is a technique to evaluate the employees according to their performance and potential. In this technique, you rate your employees on a scale of 1 to 10 based on regularity, target achievement, accountability, etc. This is a commonly used method as it is easy to understand, simple, economical, and less time-consuming.

2. Easy Appraisal Method

The Easy Appraisal Method is a traditional approach in which you mention the strengths and weaknesses of your employees. This is a detailed analysis of the employee’s performance backed by various reports and data. On the other hand, the detailed results make it difficult to assess the results and draw a conclusion. This is the reason why most organizations do not prefer to use this method.

3. Ranking Method

This is again a commonly used method where the employee’s performance is compared with other similar co-workers. This method is used when the organization wants to find the best-performing employee. In this, the employees are ranked as excellent, very good, good, poor by the managers based on their entire year’s performance.

4. Checklist Method

The checklist approach is a method of evaluating an employee’s performance on a set of attributes and assertions in an objective manner.

The evaluation is completed by responding to Yes or No questions. The manager evaluates your performance based on a set of characteristics in order to discover your strengths and weaknesses and provide feedback.

5. Critical Incident Method

This strategy is based on significant incidents and difficulties that may arise during the appraisal period.  Companies that use this strategy keep data logs that summarize all incidences, including both positive and negative consequences. These instances were then utilized to evaluate your employees’ responses and performance in the aftermath of major incidents.

Now, let’s start with understanding the format of the Appreciation Letter.

Appraisal Letter Format

Appraisal Letter

Appraisal Letter Example

Appraisal Letter Example

Final Words

Listening to your staff is something that will never go out of style. Employees feel more connected to their work when you pay attention to their performance, activities, and difficulties. A letter of appreciation is an excellent way to demonstrate to your staff that you care about them. If you are looking to write an effective Appraisal Letter, Ultimate Business Systems provides the best HRMS Software India that gives you the facility to Live to edit the appreciation letters for your employees. What’s exciting is, we are the very first organization offering the live edit feature for all the HRMS letters like appointment letters, recommendation letters, and many more. Get in touch to integrate our software for the betterment of your organization’s HR operations.

Alpesh Vaghasiya

Alpesh Vaghasiya

The founder & CEO of Ultimate Business Systems Pvt. Ltd. (UBS), I'm on a mission to help small and medium-sized companies to grow to the next level of accomplishments. With a distinctive knowledge of authentic strategies and team-leading skills, my mission has always been to grow businesses digitally. The core mission of UBS is Connecting people, Optimizing the process, Enhancing performance.

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