Appraisal Letter

19 Jun, 2025 |

Akanksha Shekhar

With over 9 years immersed in the world of content marketing for SaaS, Cloud, HRMS and multiple other industries, Akanksha Shekhar currently leads the content initiatives as Manager of Content Marketing. Her expertise lies in the art of bringing words to life, creating engaging narratives and technically sound pieces that are both catchy and deeply informative.

Appraisal Letter Meaning and Definition

An appraisal letter is a formal document which is issues by an employer to their employee. It is a testament of recognizing their performance and contribution for a certain tenure, this includes complete details about the salary hikes, promotions, bonuses or any other form of reward basis the performance evaluation.

An appraisal letter can also be considered as tangle record of professional growth and company’s acknowledgement to employee performance over the year.

How Does Appraisal Letter Work?

An appraisal letter works as an official communication by an employer to employee which helps clarify on the following factors in context to the employee-

Performance Review- Here the employer evaluates the employee’s honest contributions, their dedication towards work and the tangible results which followed.

Rewards Decision- Basis the annual performance and review, a company decides if an employee would receive performance bonus, salary increment or any sort of promotion.

Employee Acknowledgment- An employee who receives the appraisal letter checks the components, the salary increment percentage, title changes if any and confirm their acceptance once all goes right.

What are Key Features of an Appraisal Letter?

An appraisal letter for employees generally consists of a regular appraisal format, here are the key features-

Employee Details- This includes all details in context of the employee including name, designation, the department or team they are working in and the appraisal period assigned.

Summary of Performance- This highlights how the employee has performed over the year, their achievements, strengths, contributions etc, which have helped them in getting an appraisal.

Salary Increment Details- The appraisal letter contains all details about the salary increment, additions in each component, the variable pay if applicable and any bonus if included.

Company Guidelines and Effective Dates- The appraisal letter contains company’s guidelines on appraisal, effective date and authorized signatures to validate the document.

Frequently Asked Questions

1. What should be included in an appraisal letter?

An appraisal letter should mention employee’s performance evaluation, salary hike or promotion details, increment effective date and a letter of appreciation for the employee.

2. How often should appraisal letters be conducted?

In most cases, appraisal letters are issues annually, however, some companies conduct performance reviews twice a year or once in 18 months, depending on their policies.

3. What is the difference between appraisal letter and appreciation letter?

An appraisal letter includes salary increment and promotion details while an appreciation letter highlights the achievements of the employee which may or may not involve monetary benefit.

4. How do I write an appraisal letter?

To start you can mention employee’s contribution, mention their salary update or any designation update. It can end with an encouraging closing note and their salary breakup for clarifications.

5. How do I tell an employee about an appraisal?

Communicating for appraisal can be through email or one-to-one in a formal meeting, this should highlight their performance, the outcome and further steps to be taken if any.