An employee performance appraisal system is a formal structure by which managers review the work of the employees they supervise. While employees sometimes get nervous about feedback on their performance, a good evaluation system is useful in learning the skills and competencies you need to develop to earn more money or get a job promotion.

Linking of Assessment to Expectations

Effective appraisals link an employee's performance to her job description, expectations and goals. The appraisal should serve as a way to motivate the employee to improve her performance. This only works if the employee has clear goals. For example, if a salesperson is expected to close 20 sales a month, her appraisal should mention this metric. If she met or exceeded the goal, then the appraisal should note as much. If she fell short, the appraisal should offer constructive guidance and training options to help her improve her performance.

Objectivity

A good performance appraisal is one that is fair, objective and easy to understand. Formal evaluations usually include specific evaluation criteria that connect to the job. Supervisors should be given guidance on how to score each employee's performance, whether it's on a scale of 1 to 10 or A to F. These criteria promote a fair assessment and allow the employee to more easily understand what each score means.

Consistent

Evaluation systems should be consistent. This means that each employee in a particular department gets the same basic evaluation criteria. In addition, all employees should be evaluated over the same time frame, whether it's once a quarter or once a year. Employees also shouldn't face any major positive or negative surprises if the manager has communicated well during the evaluation period.

Forward-Looking

Since appraisals should tell employees how to improve their performances, they must have a forward-looking focus. Supervisors should approach each assessment as an opportunity to motivate -- not condemn or punish. With high performers, the evaluation is an opportunity for formal recognition and positive reinforcement. For low-performers, the appraisal is a chance to improve deficiencies inhibiting progress toward job and career goals.