Conducting a performance appraisal and implementing a succession program are highly related. Throughout the performance appraisal process, the employee receives feedback from the appraiser. The performance appraisal reveals how employees are performing in their jobs. By using a competency model as the standard for the organization, a manager has the ability to rate an employee’s job performance. The appraiser and the subordinate discuss improvements and developmental efforts that are required to increase the overall performance. The performance appraisal process is essential because documentation may be retrieved about an individual’s accomplishments and developmental plans. This is useful information in preparation for the succession planning process.

Having a performance management system allows decision makers access to information about employee performance. By having employee appraisal records, it assists the managers when forming a talent pool of potential individuals. The high potential individuals are being prepared for advancement to new positions. They are given clear development paths in preparation for their new role. The challenge for an organization is to identify key positions that will be necessary for the future, and to develop the skills and abilities that are needed in order to fill such positions. Assessing the future work requirements to fill key positions is not an easy task. By having access to vital sources of employee information from the appraisals and combining it with the work requirements is key for practitioners when developing a strategic HR program.