Performance Appraisal

 

What is Performance appraisal?

Performance appraisal involves identification, measurement and management of human performance in organization.

Balkin and Cardy-2015

 Performance appraisal is a systematic and formal process by means of which the job relevant strength and weakness of employees are identified, observed, measured recorded and developed
Swanepoel-2014

Performance appraisal is the process of systematically evaluating performance and providing feedback upon which performance adjustments can be made”.
Schermerhorn, Hunt and Osborn-2005

                                                                        (Figure-1)

 Basic purpose of performance appraisal

Effective performance appraisal systems contain two basic systems operating in conjunction: an evaluation system and a feedback system.

The main aim of the evaluation system is to identify the performance gap (if any). This gap is the shortfall that occurs when performance does not meet the standard set by the organization as acceptable.

The main aim of the feedback system is to inform the employee about the quality of his or her performance. (However, the information flow is not exclusively one way. The appraisers also receive feedback from the employee about job problems, etc.)

One of the best ways to appreciate the purposes of performance appraisal is to look at it from the different viewpoints of the main stakeholders: the employee and the organization.

Benefits of Appraisal

Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working life, it offers a rare chance for a supervisor and subordinate to have "time out" for a one-on-one discussion of important work issues that might not otherwise be addressed.

Almost universally, where performance appraisal is conducted properly, both supervisors and subordinates have reported the experience as beneficial and positive.

 Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and correct existing problems, and to encourage better future performance. Thus, the performance of the whole organization is enhanced.

Process of performance appraisal

The employees should be informed and the standards should be clearly explained to them. This will help them to understand their roles and to know what exactly is expected from them. 

The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.

Objectives of Performance Appraisal

Performance Appraisal can be done with following objectives in mind:

To maintain records in order to determine compensation packages, wage structure, salaries raise, etc.

To identify the strengths and weaknesses of employees to place right men on right job.

To maintain and assess the potential present in a person for further growth and development.

To provide feedback to employees regarding their performance and related status.

To provide feedback to employees regarding their performance and related status.

It serves as a basis for influencing working habits of the employees.

To review and retain the promotional and other training programme.

Advantages of performance appraisal

They provide a record of performance over a period of time.

They provide an opportunity for a manager to meet and discuss performance with an employee.

Provide the employee with feedback about their performance and how they completed their goals.

Provide an opportunity for an employee to discuss issues and to clarify expectations with their manager.

Offer an opportunity to think about the upcoming year and develop employee goals.

Can be motivational with the support of a good reward and compensation system.

 

Disadvantages of performance appraisal

If not done appropriately, can be a negative experience.

Are very time consuming, especially for a manager with many employees.

Are based on human assessment and are subject to rater errors and biases.

If not done right can be a complete waste of time.

Can be stressful for all involved.

 

Performance appraisal methods

 Performance appraisal methods include 11 appraisal methods / types as follows:

Critical incident method Weighted checklist method

 Paired comparison analysis method

Graphic rating scales method

Essay Evaluation method

Behaviorally anchored rating scales method

Management By Objectives (MBO) method

Performance ranking method

360-degree performance appraisal

Forced ranking (forced distribution)

Behavioral Observation Scales

Conclusion

Performance appraisal measures the qualitative and quantitative aspects of job performance. An appraisal evaluates not only the employee's performance but also his potential for development. The primary objectives of an appraisal are – to assess past performance, to identify training needs, to set and agree on future objectives and standards, and to facilitate the achievement of these goals.

In many situations, the appraiser is the supervisor of the person who is to be rated. However, companies may also use multiple raters to evaluate performances (360-degree appraisal).

Peer and self-evaluations are on the increase, as are customer or client evaluations. Some appraisal systems use subordinate or reverse appraisals and team rating techniques.

Different methods are used for appraising performance. In the straight ranking method, employees are ranked from the best to the worst on the basis of their performance. Management by Objectives involves an agreement between a superior and his employee on the employee's performance objectives for a specified period and a periodic review of the extent to which the employee is able to accomplish those objectives.

Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does.

According to Flippo, a prominent personality in the field of Human resources, "performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job."

Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future.

 

References 

Human resource management- S.S.Khanna

https://www.mgeonline.com/2016/grading-employee-performance/

Human resource management-Dr. C.B. Gupta, Sultan chand & sons Educational publishing New Delhi

Human resource management-  C.B.Mamoria, Himalaya publishing house

Waterman, Richard (1998). "Principal-Agent Models: An Expansion?". Journal of Public Administration Research and Theory. 8 (2): 173–202. doi:10.1093/oxfordjournals.jpart.a024377.

Manasa, K. & Reddy, N. (2009). Role of Training in Improving Performance. The IUP Journal of Soft Skills, 3, 72-80.