In a landmark study conducted by Locher and Teel (1977; in Appraisal, 2006), researchers found that the three most common appraisal methods in general use are: 1) rating scales (56%); 2) essay methods (25%); and 3) results-oriented or management by objectives (MBO) (13%). Performance appraisals may have their greatest impact on the organization because of their association with employee motivation. One of the outcomes of performance appraisals is determination of compensation levels and other motivating factors like promotion decisions, job redesign, and recognition of individual achievement.
             There are formal and informal systems of appraisal. Formal systems are usually structure and occur at regular intervals, consisting of one or a combination of the most common methods enumerated above. Informal evaluations enhance formal evaluations, and they may be as simple as a conversation between an employee and a supervisor or discussion had over a morning cup of coffee. Experts maintain that both formal and informal appraisal methods can be enhanced through "...certain techniques that have been found to yield better results than others" (Appraisals, 2006, p. 1).
             Three techniques that seem to enhance the outcome of performance appraisals include: 1) encouraging discussion; 2) constructive intention; and 3) setting performance goals (Appraisals, 2006). For example, constructive intention is a means of undermining the potentially negative impact on employees from negative feedback. In contrast to feedback that is helpful and constructive, "deconstructive criticism" is vague, ill-informed and unfairly or harshly offered (Appraisal, 2006, p. 1). This kind of feedback can undermine morale and motivation, the opposite goal of effective performance appraisals.
             In conclusion, today's organizations face increasing competition and a number of other factors that demand employees who are motivated, p
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