1. Before creating an appraisal cycle, ensure that your organization's performance service configuration is set up. This includes configuring performance evaluation methods, such as KRAs, Goals, Skill Sets and Competencies, additionally you can enable Salary, Configure appraisal templates, appraisal reviews, integrated learning, and continuous Review settings. For more details, refer to Performance Setting Overview.
   
2. Ensure that you have mapped the required performance evaluation parameters, such as KRA, Goals, Competency, Skill Set, Review Questions to your employees. For mapping performance parameters, navigate to Operations > Performance > Methods, for more information, refer to Performance - Operations.
   

Appraisal Cycle

Use Continuous Review to Support Annual Appraisals

- Rather than reviewing employees only once a year, you can review them regularly—monthly, quarterly, or semi-annually. This gives better feedback and helps with more accurate annual appraisals.

- Enable Continuous Review to review the scores from these regular reviews in the final appraisal. The continuous review completed within the appraisal evaluation period will be listed in the review page.

Create an Appraisal Cycle

1. From your home page, navigate to Operations > Performance > Appraisal > Appraisal Cycle, and click Add Appraisal Cycle.
   
   
2. Click on Create New Appraisal Cycle to create a custom appraisal cycle. 
   
   Zoho People provides three system appraisal templates to streamline the creation of your appraisal cycles as follows:
   - Yearly appraisal with self-appraisal and manager review
   - Yearly appraisal with self-appraisal, multi-rater review, and manager review
   - Yearly appraisal with only self-appraisal and manager review
   Click the Apply button on your preferred template to create an appraisal cycle with the selective performance evaluation methods. 
   To set up or configure Appraisal Template, refer to Appraisal Template Settings.
   
   
   
   
3. In the Create New Appraisal Cycle section, you can choose the performance evaluation methods that suit your organization's needs, such as Self-Appraisal, Multi-Rater Review, and Manager Review. Additionally, you can enable and configure post-appraisal processes like Normalization and Salary Hike to align with your company's policies.
   
   We have selected all available options in the appraisal cycle creation process to provide you with a comprehensive explanation. 
   
   
   
   
4. After selecting the required options, click Create.
   The Add Appraisal Cycle configuration section will appear, allowing you to set up the appraisal cycle. Let's proceed with the setup process step by step.
   
   

1. Basic Details

1. Enter a name for your appraisal cycle. For example, Yearly Appraisal 2024.
2. Select the period for which your employees are being evaluated.
   
   
   
3. Enter additional notes about the appraisal cycle, if required.
   
4. Attach a guideline document for this appraisal cycle for reference.
   
5. Click Next to proceed.

2. Applicability

1. Set Eligibility by Date of Joining:
   Define a cutoff date or select specific months to determine which employees are eligible for this appraisal cycle. For example, you might include only those who joined on or before a certain date or within specific months.
2. Specify Employment Type:
   Select the employment type eligible for this appraisal. This could include permanent, contract, or other employment types, depending on your organization's policies.
   
   
   
   
3. Filter by Salary Currency Type:
   If your organization operates in multiple currencies, select the specific currency type to include employees who are compensated in that currency. This ensures that only employees with the specified currency type are considered.
4. Select Applicable Designations:
   Choose the job titles or designations that are eligible for the appraisal cycle. This allows you to tailor the appraisal process to relevant roles within the organization.
5. Set applicability based on employees' location, role, department, custom date field and total work experience.
6. After setting up the applicability, click Next.

3. Self Appraisal

1. Enable the required quantitative and qualitative parameters for employee self-appraisal. By default, ratings and comments are enabled, you can uncheck them to disable it. Additionally, you can set ratings and comments as mandatory if needed.
   

2. In the Self-Appraisal Template section, you can upload files containing self-assessment questions or other related content that the appraisee must complete. Supported file formats include PDF, .DOCX, and .XLS.

   

   The appraisee must download the file, complete it, and upload it again on the Self-Appraisal page.

   
   

3. Click the preview icon to view the self-appraisal from employee perspective.
   
   

4. Click the Edit Form icon to customize the Self Appraisal form to your organization preference.
   
   

5. Click Next to proceed.

5. Manager Review

1. Enable the required quantitative and qualitative parameters for manager review. By default, ratings and comments are enabled, you can uncheck them to disable them. Additionally, you can set ratings and comments as mandatory if needed.
   
2. At the top right section, there is an option to preview the manager review from the reviewer perspective and customize the Peformance Appraisal form based on your organizational preference.
   
   
   
3. In the reviewer section, add required manager reviewers.
   
4. Enable the review approval only for final level review if required and set up approvals process, refer to Approvals - Overview & Use Cases.
   
5. Click Next to proceed.

6. Course

1. Show courses along with progress details
2. Allow course suggestion
   
   
3. Click Next to proceed.

7. Ratings

1. Define the rating types and values for this appraisal cycle evaluation. You can set star, number, text or custom rating options, include option as N/A and set maximum character lenght for comments.
   
   
   
   
2. Set the Minimum and Maximum rating range and select the rating modification permission option if required.
   
   
3. Enable module weight to calculate overall rating calculation and select the required advanced options.
   
   
4. Click Next to proceed.

8. Normalization

10. Publish Configuration

1. Select the rating publish type as either Manual or Automatic:
   Manual: Ratings are published upon clicking the Publish button.
   Automatic: Ratings are published automatically on the set date and time, you can set publish date and time in Period Configuration section.
2. Select the required performance appraisal outcomes that must be shared with the appraisee upon publishing the review.
   
   
3. Select who can share results, by default administrators can publish and share the rating results to employees, additionally you can select Final reviewer and Reporting Manager if required.
   
4. You can also allow employees to share the feedback on the appraisal process by selecting the share feedback option.
   
5. After setting up the Publish rating, click Next to proceed.
   

11. Appraisal Letter & E-Sign

To send the appraisal letter for e-signature, enable E-Signature in Performance settings. Refer to E-Signature - Appraisal Letter

1. Enable appraisal letter, to configure settings to send appraisal letter to appraisees.
   
2. Select any of the required options:
   
1. Send the appraisal letter automatically upon review is published
   
2. Send the appraisal letter manually after the review is completed
   
   
   

   Appraisal letter is sent upon the successful publication of the final review and is automatically stored in the employee files.
3. Enable E-Sign Configuration to send appraisal letter for E-signature upon publishing the final review.
4. Enter the document name, for example Appraisal Letter 2024.
   
5. Select the appraisal letter template that you have already created in the Mail Merge Templates.
   
6. You can use Click here option to navigate to the Mail Merge Template and set up the Appraisal Letter Templates for your organization.
   
   

   For more information on setting up the Mail Merge Template, refer to Create a Mail Merge Template in Zoho People.
   
   
7. Select the e-sign recipients, you can select upto three recipients, e-signature will be triggered in the order of recipient selection.

12. Period Configuration

1. Self Appraisal, Multi-rater, Manager Review, Salary Hike Period, Publish Ratings period must be within the Appraisal Process Period
   
2. Hike Push date must be greater than the Hike Period
   

1. Select the Appraisal Process Period: The total duration encompassing all appraisal activities, from initiation to completion. Ensuring the entire appraisal process is conducted within a set timeframe.
   
2. Select Self Appraisal Period: The timeframe for employees to complete their self-assessments. 
   
3. Select Multi-rater Selection and Feedback Period: The timeframe to select the Multi-raters and the timeframe for Multi-rater feedback.
   
4. Select the Manager Review Period: The timeframe allocated for the Manager reviewers to complete the Manager review for the employees.
   
5. Select the Normalization period: The timeframe for adjusting employee performance ratings to align with your organization's standard rating distribution.
6. Select the Salary Hike period: The timeframe during which salary increments are proposed, reviewed, and finalized.
   
7. Select Hike Push date: The date on which approved salary hike details are updated in employee salary records. 
   
8. Select Publish Ratings period: The timeframe during which final performance ratings can be published and officially released to employees.

In the image below, we have populated the dates for the 2024 Annual Appraisal Cycle. Employees' performance parameters for the period of January 1, 2024, to December 31, 2024 (based on the evaluation period given in Basic Details tab) are considered for evaluation. The appraisal process is conducted between January and February 2025 to assess and review their performance for the year 2024.

 After setting up the Appraisal Cycle configuration, click on Submit. The appraisal Cycle will be created and available in Active Cycles tab.

Active Cycles

After creating an Appraisal Cycle, you can manage it by navigating to Operations > Performance > Appraisals and selecting the Active Cycles tab. Here, you can view all active appraisal cycles. Continuous review–based appraisal cycles are highlighted with a banner. Additionally, you can view the total number of appraisees for each cycle, manage users by including or excluding them, and edit the appraisal configuration.

Start Cycle

To initiate the continuous review based appraisal process, click on Start Cycle, this action officially begins the appraisal cycle and enable evaluations to proceed as configured.