Executive Summary The Western Australia Main Roads Department is obviously facing problems regarding their system of evaluating the respective performance of their workers. The human resources manager, Leon Ottobrino, is suspecting that the evaluations reaching his desk from the various supervisors are not as accurate as they should ideally be; consequently, he has asked for an audit of the process. The first part of this audit report discusses various approaches to employee evaluation; and the various aspects and issues which may stand in the way of an effective employee evaluation regime. The final part of the report identifies the issues within the department’s workers and offers recommendations on steps that should be taken to mitigate the issue. Introduction Performance appraisal is the process through which the performance of an employee is evaluated for various parameters; the major ones being the quality of work delivered, the quantity of work done during the evaluation period, the amount of money the employee is costing the employer; and the amount of time the employee dedicates to executing duties in his/her work station. At the end of an evaluation period, the employer should ideally have comprehensive information about the employee that would enable him/her to make appropriate decisions regarding the future of the employee in the particular firm. Performance evaluation was necessitated by an increase in competitive pressures both in the job market and within respective industries; as such, employers needed a form of differentiating employee performance levels, identifying poor performance and addressing it so as to gain competitive edge. A common method used in evaluating employees is the use of scalar of numerical rating systems; this is whereby managers or supervisors are required to score with the individual being evaluated against a numerical measurement or a set objective. In an ideal situation, evaluation is done on all levels and not from top-down only. This situation, commonly referred to as 360° appraisal involves the assessment of lower cadre employees as well as the management level staff by their peers, subordinates and clients; such would offer a three-dimensional picture of the situation in the firm/institution. The purpose of a performance appraisal As mentioned before, performance appraisal is an important tool to any management as it allows it to view their workforce in a more detailed manner. For starters, an appraisal is useful in identifying a specific behavior and/or conduct which should either be encouraged or discontinued. By identifying such issues, the management will be able to identify the training needs of their workforce; and develop training and coaching programs for their existing and future employees. The outcomes of an employee appraisal are crucial in developing systems of rewarding good performance through promotions, salary increments and reward. One the other hand, such would also be useful in developing evidence-based disciplinary protocols which would be crucial in shielding the management from legal repercussion or accusations of discrimination (Jui-Kuei & Chen, 2009). Performance appraisals offer a crucial route of communication between the various levels of the firm; and offer a basis for promotions and human resource strategies. Approaches to Performance Appraisal Performance app