The essentials of an effective performance system are as follows:

Documentation Effective Performance Appraisal means continuous noting and documenting the performance. It also helps the evaluators to give a proof and the basis of their ratings.
Standards / Goals – the standards set should be clear, easy to understand, achievable, motivating, time bound and measurable.

Practical and simple format The appraisal format should be simple, clear, fair and objective. Long and complicated formats are time consuming, difficult to understand, and do not elicit much useful information.

Evaluation Technique Effective Performance Appraisal An appropriate evaluation technique should be selected; the appraisal system should be performance based and uniform. The criteria for evaluation should be based on observable and measurable characteristics of the behavior of the employee.

Know the Performance Appraisal Process

Communication Effective Performance Appraisal Communication is an indispensable part of the Performance appraisal process. The desired behavior or the expected results should be communicated to the employees as well as the evaluators. Communication also plays an important role in the review or feedback meeting. Open communication system motivates the employees to actively participate in the appraisal process.

Feedback for Effective Performance Appraisal The purpose of the feedback should be developmental rather than judgmental. To maintain its utility, timely feedback should be provided to the employees and the manner of giving feedback should be such that it should have a motivating effect on the employees’ future performance.

Personal Bias Effective Performance Appraisal Interpersonal relationships can influence the evaluation and the decisions in the performance appraisal process. Therefore, the evaluators should be trained to carry out the processes of appraisals without personal bias and effectively.