Do you need to provide an appraisal letter to someone and need help with it? No problem, this article would help you by broadly covering the below topics

• What is an appraisal letter
• Types of Appraisals
• How to write appraisal letters
• Mode of communication for appraisals
• Who should appraisal letters be shared with 
• FREE Samples

Meaning of Appraisal 

According to the Cambridge dictionary, Appraisal is examining someone or something to judge their qualities, success, or needs. For our context, we are considering it as an Appraisal done at the workplace.

What is an appraisal letter? 

In a more contemporary understanding, Appraisal letters mean appreciation letters in general. 

The objective of Appraisal Letters

Appraisal letters should be written when HRs/company management need to appreciate employees and provide them appraisals. Providing timely appraisals has become necessary as the battle for talent gets more fierce. Retaining their top performers is a must for organisations to retain their top performers and an appraisal from management is a good step in that direction. Appraisal letters reinforce the idea that individuals win and go a long way in keeping the team engaged in the workplace. The appraisal letters also improve the HR KPIs of an organisation (Employee Engagement, attrition etc.) and contribute to the company’s overall success. There could be two types of Appraisal.

Types of Appraisals

• Appraisals without a monetary component
• Appraisal with monetary component

• Appraisals without monetary component: These are the easiest ways to keep your team engaged. A simple “Great Job done” and “Thank you for your efforts” could motivate your team and keep them engaged in the role. Besides, these do not require unnecessary financial approvals and can be practised by all managers/HR. These appreciation letters are, in most cases, given by managers directly. 
• Appraisals with monetary component: In some cases, appraisals may be coupled with a financial component. These financial components can be in the form of employee gifts, performance bonuses Or an increment. In most companies, this is an annual exercise commonly referred to as Performance Appraisal OR Employee Appraisal. Providing appraisal letters to employees is the final stage of a formal Performance Appraisal Process.

How to write Appraisal letters? 

• Mention the specific activity/impact of the employee’s effort: A lot of times, simply saying “Good Job” is not enough. The detail of the Good work done and its impact on the team/business is generally more effective. Example:
• Keep it personal: In a world of “so many google searches”, it is imperative that you keep the Appraisal personal to drive more impact. 

Where to write Appraisal letters? 

• Appreciation letters without any monetary component can be distributed in an informal setting. Here are some ideas for the same
  1. They can be shared with the individual and CC to other team members by the manager. 
  2. They can also be distributed via WhatsApp groups OR other modes of communication between the team members.
  3. Weekly/Monthly team meetings/review calls are a great place to appreciate the team members.
• Appraisal letters with a financial component are mostly provided privately by the HR/management to the employee via an email/hardcopy. Kindly note that these letters need to be formal, for example, written on company letterhead. The financial component of the Appraisal should be outlined clearly and when and how it would be paid. For example, a performance could be paid once on a particular date, OR an increment could be valid w.e.f. from a particular date etc.)

Who should appraisal letters be shared with 

• Appraisals without a monetary component should be shared with as broad an audience as possible. They should be celebrated widely in the organisation. This would ensure that the star performer feels celebrated in the organisation and others get motivated to perform equally well. 
• Appraisals with a monetary component should be shared as per your company policy. In most cases, these are shared privately with the employees by the HR/management.

Free Samples

• Appraisal without monetary benefits: Thank you Rahul for your help in creating the presentation for Zigsaw. The clients were particularly impressed with your slide on “Impact on similar businesses”. They loved the presentation and your “Out-of-box” thinking might have just won us a critical deal. 
• Appraisals with monetary benefits can roughly follow the below structure.

1. Greet the employee
2. Give the context: 
   1. You might know that we grew by 50% last year. We would want to reward our top performers who made it possible.  
   2. You might be aware that we went through some turbulent times last year. We would want to reward the top performers who stood with us and helped us navigate tough times successfully. 
3. Make the person valued: We would like to mention that you, <<name of employee>>, have been an integral part of our success last year. Hence, I would like to present to you a small token of our appreciation for your hard work in the past year.
4. Details of Appraisal: Gifts, Performance Bonus, Salary revised etc. 
5. Align for future company vision: I would like to take this opportunity to share with you that we are all geared for the growth that lies ahead of us. As we scale new heights in the coming years, we are love to see you as a partner of success in the coming years. 

Here’s another sample from Razorpay

[Company_Name]

[Company_Address]

14/12/2021

Appraisal Letter – CONFIDENTIAL

Dear [Employee_Name],

Employee ID: [Employee_ID]

[Company_Name] has and continues to move forward because of your hard work and contributions. [Company_Name], as always, stays committed to its people first approach and puts you and your contributions at the forefront.

In continuation to that thought and philosophy, we are taking this opportunity to congratulate and recognise you for your contributions and thank you for all your efforts.

In recognition of your performance and contributions to [Company_Name], we are delighted to promote you to [Employee_Designation] and revise your Cost to Company to INR 330000, effective from [Appraisal_Date] The break- down of your CTC is mentioned in Annexure A.

We wish you tremendous success in the coming years and look forward to your long-term association and contributions to [Company_Name].

Best,

[HR_Name] [HR_Designation]

Annexure A

This is your expected monthly salary structure.

Salary Component	Amount
Basic Salary	13,750
HRA	6,875
Special Allowance	4,125
Leave & Travel Allowance	2,750
ESI Employer Contribution	0
PF Employer Contribution	0
Total	27,500

Note: You will receive salary, and all other benefits forming part of your remuneration package subject to, and after, deduction of TDS, PF, ESI and professional taxes in accordance with applicable law.