The Importance of Performance Appraisal on Employee Development

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Justina Olayinka v1




Justina Olayink

[Part Two]

Performance appraisal is the process of evaluating the job performed by employees against agreed performance objectives. The process involves the appraisee (employee) first appraising him/herself according to set parameters and subsequently meeting with the appraiser (supervisor) for finalisation.

It is expected for supervisors to evaluate the quality of the employee’s performance based on the work done in the course of the performance cycle and then to organise a one-on-one meeting to discuss the outcome of the appraisal and iron out gray areas where necessary.

There is no specific period for conducting performance appraisals as organisations consider what works best for them and act accordingly. However, in most organisations, performance appraisals take place every six months (bi-annually) for the period a confirmed employee has continually worked.

Above all, organisations focus on improving employee performance so that goals are systematically and timeously achieved.

Measures for continuous performance improvement are:

1. Setting SMART Goals

An objective performance appraisal starts with setting goals for the business year. Smart goals help everyone to focus on important things that will help the firm achieve its business objectives. By setting goals, employees and supervisors can create a roadmap showing how to achieve set performance targets. Achieving these goals gives employees a sense of belonging and satisfaction.

Smart goals are specific and clear, reducing confusion for employees and supervisors, giving employees focus and direction. Setting smart goals helps supervisors to objectively evaluate the performance of their direct reports.

The clarity of goals has an important impact on employee performance. To bring that clarity, the goals should be Specific, Measurable, Achievable, Realistic, and Timely.

Chart culled from: SMART and Goals at


  1. What are Goals in SMART

To start with, a goal is something an employee/worker wants to achieve. It is the desired result that a person, or a group of staff, plan and commit to achieving. But then a goal is a dream with a deadline.

Goals are one of the major features of business activities, it provides a sense of direction, motivation, a clear focus, and clarifies levels of importance. Supervisors set goals to provide specific targets for achievement by their respective employees and those goals should be established keeping in mind the capabilities of the employees and the organisation’s objectives.

  1. What is SMART

SMART is an effective tool that provides clarity, focus and motivation that employees need to achieve their goals. It also improves employee ability to reach targeted tasks and encourage them to define their objectives and set a completion date. SMART goals are  easy to use by everyone, anywhere, without the need for specialist tools or training.

Hence, a SMART goal enables employees to focus on their efforts and increase their chances of achieving their targeted goals.

  1. The SMART Criteria
S Specific What will you achieve? What will you do?
M Measurable What data will you use to decide whether you have met the goal?
A Achievable Are you sure you can do this? Do you have the right skills and resources?
R Realistic Does the goal align with those of your team or organization? How will the result matter?
T Time-bound What is the deadline for accomplishing the goal?


Specific SMART Goals

Employee goals should be clear and specific in order to have a greater chance of being accomplished.

When goals are been drafted, answers to the “5W” questions should be provided:

  1. Who is involved in this goal?
  2. What do I want to accomplish?
  3. Where is this goal to be achieved?
  4. When do I want to achieve this goal?
  5. Why do I want to achieve this goal?

Measurable SMART Goals

It is important to have measurable goals, this is to enable employees to track their progress and remain motivated. Evaluating progress helps employees to remain focused, meet job deadlines, and being satisfied in getting closer to achieving their goals.

A measurable goal should address questions such as:

  1. How much?
  2. How will I know when it is accomplished?

Achievable SMART Goals

A SMART goal must be achievable and attainable. This enables employees figure out ways they can realize the goals and work towards achieving it. The achievability of the goal should be stretched to make employees feel challenged, but well defined to enable employee to actually achieve it.

An achievable goal will usually answer the following questions:

  1. Do I have the resources and capabilities to achieve the goal? If not, what am I missing?
  2. Have others successfully accomplished this before?

Realistic SMART Goals

A SMART goal must be realistic in that the goal can be realistically achieved given the available resources and time. A SMART goal is likely realistic when employees believe that it can be accomplished.

A realistic goal can answer “yes” to these questions:

  1. Is the goal realistic and within reach?
  2. Is the goal reachable, given the time and resources?
  3. Are you able to commit to achieving the goal?

Timely SMART Goals

Every goal needs a target date, so that employees have a deadline to focus on and something to work toward.  However,  a SMART goal must be time-bound in that it has a start and finish date. If the goal is not time-constrained, there will be no sense of urgency and, therefore, less motivation to achieve the goal.

A time-assured goal will usually answer these questions:

  1. Does my goal have a deadline?
  2. By when do you want to achieve your goal?

2. Continuous Performance Feedback

Continuous performance feedback is the process of sharing regular feedback from supervisors to employees. Regular and timely performance feedback helps in highlighting the strengths and weaknesses of each employee. It also provides the opportunity for employees who may be lagging in one area of competency or the other to improve. This approach creates a culture of feedback in the organisation.

3. Deploy a Performance Management System

Since performance appraisal involves evaluating and documenting how well an employee is carrying out his or her job, it is an intrinsic part of a company’s performance management system. It only looks at the employee’s performance objectively at the time of the appraisal and provides final feedback to the employee.

The deployment of a robust performance management system makes the process of appraisal and analysis of employee performance easy, data-driven, real-time, simple, and objective. The system can collect performance data from multiple sources simultaneously. It can analyze the overall performance of an employee and help identify areas requiring improvements. It can also help supervisors easily identify skills gaps amongst employees for the purpose of deploying adequate learning interventions to mitigate these gaps.


Performance appraisals are also called annual reviews, performance reviews or evaluations, or employee appraisals. Companies use performance appraisals to ascertain which employees have made significant contributions to the growth and development of the organisation and reward them accordingly.

The traditional method of assessing an employee’s performance is the annual performance appraisal. Most organisations still make use of this approach. In recent years, it has become clear that a performance management system that combines elements of rewards and recognition with the ability to conduct performance reviews more frequently is more effective. Instead of an annual performance appraisal, employees prefer to receive feedback regarding their performance more frequently. Firms with a greater retention rate also depend more heavily on feedback and ongoing communication.

The importance of performance appraisals cannot be over emphasised. It helps the firm to find out whether its employees are adding value or otherwise. It also helps employees to find out where their career is heading.


For further information on this article and area of law,
Please contact Justina Olayinka at:
S. P. A. Ajibade & Co., Lagos by
Telephone (+234 1 472 9890), Fax (+234 1 4605092)
Mobile (+234.815.979.4218, +234.809.488.6972)


  1. Justina Olayinka, Legal Secretary, PMU Unit, S. P. A. Ajibade & Co., Lagos State, Nigeria.
  2. Available at accessed on 13th November 2021.
  3. See, accessed on 30th November 2023.
  4. Ibid.

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