Writing an appraisal letter is stressful. Stressful because most of the HRs are not aware of the correct appraisal letter format. Also, most of them sound like corporate robots because they struggle to balance professional tone with human emotion.
And if you’re looking at what’s currently out there on the web, it’s mostly dusty templates written in 2015. But we’re going to fix this because you deserve better.
We’re going to walk you through exactly how to write an appraisal letter that is clear, legal, and actually kind. We’ll cover the fun stuff (big raises!) and the tough stuff (no raises) with the actual templates and samples.
Let’s dive in.
What is an appraisal letter?
In plain words, it is a note that tells an employee their salary is changing (or not) without sounding like a corporate robot. It usually comes with news about a pay raise.
It is an “official record” given by employers to employees with two main confirmations:
- Performance: This letter confirms that the employee has done a good job (or needs to work on it).
- Reward: So, you are getting a pay raise. Here is the appraisal letter of your revised salary (or why it’s staying the same).
Here, let us break a common confusion. Most people think it’s just a “salary hike letter”. “But it’s actually a legal document that protects you and the employee by putting everything in writing.
Heading ahead!
Why choosing the right employee appraisal letter format matter?
A good layout makes the news easy to read. It keeps things professional but friendly.
The right format sets the tone.
If you use a cold, robotic format, your employee feels like a number. If you use a warm, clear format, they feel respected and even if the news isn’t 100% what they wanted.
Furthermore, most templates you find online still talk about “printing on letterhead”. But let’s be honest. It’s 2026. You are probably sending this via email or a secure HR portal like NYGGS HRMS.
The appraisal letter format needs to look just as good on a smartphone screen as it does on paper. That means short paragraphs, clear bold text for the numbers, and no “wall of text”.
Reading this may raise questions in your mind:
How do I write a good appraisal letter?
Here’s the answer:
You don’t need to be Shashi Tharoor. You just need to be clear.
Start with a big thank you. Mention the great things they did this year. Be clear about the new role or pay.
Here is a strategy to make your letters better than 99% of what’s out there. Instead of just guessing, build your letter like this:
- Start with warmth. ‘Thank you for your hard work on Project X.’ (Don’t start with ‘We are writing to inform you…’)
- Add the ‘Meat’ (Or The Numbers). Put the new salary along with the pay breakup (basic salary, HRS, TA, and other) and effective date in bold. Don’t hide it.
- Answer the ‘Why’. Briefly explain why they got this rating. Was it their leadership? Their sales numbers?
- Legality matters here too. A specific sentence that says, ‘The terms of your employment contract remain unchanged.’ (This saves you from accidentally rewriting their whole contract).
Professional Tone Without Sounding Corporate Robot
Almost all HR managers often slip into “corporate mode” when writing these. Stop it because words matter. A lot.
- Don’t say: “You failed to meet the quota.”
Say: “We need to focus on hitting the target next quarter.”
- Don’t say: “Your performance was adequate” (ouch).
Say: “You met expectations and provided steady value.”
Using the best appraisal letter format for salary increment.
Salary increment is the part everyone looks for first. Keep the money talk simple.
When you are giving a raise, the goal is celebration.
If you are giving them a 15% hike, that should be the star of the show. We’ve seen letters where the salary increase was hidden in the third paragraph. By then, the employee is already panic-reading because they think they’re being fired.
Pro Tip for HRs: Always include the “Effective Date”. This is the #1 thing payroll gets confused about. If you write “Effective April 1st”, your payroll team will appreciate you.
Free appraisal letter sample format to use today
Copy this part to save time. It has all the right spots for names and dates.
Template 1: The Real Appraisal Letter for Salary Hike
Best for: Top performers who are getting a raise.
Template 2: The “Bad News” Sample Letter for No Hike
Best for: Times when budgets are tight, or performance is just okay. This is the hardest one to write. Therefore, we will use the sandwich technique (in which the two positive-tone wraps contain one compromised message) to write such appraisal letters.
Option 3: The “Tough Message” (PIP / Improvement Needed)
Best for: When you need to document performance issues legally.
Download your appraisal letter format in Word or PDF.
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Download Appraisal Letter format in Word.
Download Appraisal Letter format in PDF.
FAQ
Q. Do appraisal letters always mean a salary increment?
No. It’s just an evaluation, an assessment of how someone’s doing in their job – and yes, it often comes with a pay rise, but not always.
Q. Can you send an appraisal letter by email?
Yes, you can send it by email. In fact, there are many HR software like NYGGS that automate the complete writing of such HR letters with proper formatting and send them to the right employee in a click.
Q. What happens if the employee just refuses to accept their appraisal?
That can be a bit tricky. If they just won’t sign or acknowledge it, then you need to document the refusal reason. You can also send them a follow-up email asking the reason.
Q. Is an appraisal letter legally binding?
Generally, yes – as long as it mentions a pay raise. So be triple sure you’ve got those numbers right before you hit send.