Managers often dread employee performance appraisals. However, these appraisals can be a positive experience for both manager and employee if you know the right way to handle them. Good performance needs to be rewarded, and how managers appraise performance and decide on rewards influences employee motivation and productivity. It’s important to encourage open and positive performance-related discussions that increase employees’ acceptance of their appraisal. Also, by matching rewards to performance, you can send powerful messages that your performance appraisal process is fair and meaningful. This course shows you how to rate employee performance objectively by applying a five-category rating scale. It then describes some strategies to prepare yourself and your employee for an annual appraisal meeting. Next, it instructs you in how to conduct such a meeting and gives you an opportunity to practice. Finally, it outlines some principles for developing effective rewards and presents a technique you can use to link compensation to different levels of performance.