The system of evaluation & reviewing of performance of job of a team or an individual is known as performance appraisal. An effective system evolves plans for development and assesses accomplishments.
We may also says that the process which importantly influence the organizational success by having employees & mangers work together to determine reward performance, review results & expectations known as performance appraisal.
Its objective is to give an accurate image of future or past employee performance. Performance standards are developed to accomplish this.
The Performance Appraisal Process
The performance appraisal process can be affected by many internal and external environmental factors. It is required by legislation that appraisal systems be nondiscriminatory.
Appraisal process might be influenced by the labor union by stressing seniority on the basis of pay increases and promotions.
See Also: Determinants of Job Performance
Performance appraisal process can also be influenced by factors within the business organization. The kind of corporate culture can serve to block or assist the process.
Identification of particular objectives is the beginning point for the performance appraisal process. After particular appraisal objectives have been developed, the teams & employees must understand that what is required from them in their duties.
The most important employee relation task is to inform employees that what is expected from them. The appraiser views work performance and measures it against developed performance standards, at the end of the appraisal period.
The employees are then informed about the evaluation results. The job requirements are reestablished when the performance evaluation is discussed with the supervisor.
Steps in the Performance Appraisal Process
Following are the steps involved in the job appraisal process.
- Identify the particular performance appraisal objectives
- Develop job expectations
- Analyze work performed
- Appraise performance
- Discuss appraisal with worker
Uses of Performance Appraisal
Performance appraisal serves two kinds of goals. One is to make the measuring decisions. The second one is that of there is a gap between actual & expected performance, the need assessment source is provided for training & development.
To improve performance is the main goal of an appraisal system for many organizations. Following are the uses of performance appraisal.
- Human Resource Planning
In order to assess human resources of business organization, data must be present that show the potential & promotability of all workers particularly key executives.
- Recruitment & Selection
In predicting the future performance of job applicants, performance evaluation rating may be helpful.
- Training & Development
The employee’s particular needs for training & development should be highlighted by performance appraisal.
By specifying deficiencies that badly influence performance, line manager and human resource are able to build T&D programs that allow persons to develop on their strengths and reduce their deficiencies.
- Career Planning and Development
Career planning & development may be considered from either organizational or individual viewpoint.
- Compensation Programs
Decisions regarding pay increases are provided on the basis of performance appraisal results.
- Internal Employee Relations
Performance appraisal data are also mostly use for decisions in the area of internal employee relations like promotion, motivation, demotion, layoff, termination and transfer.
- Assessment of Employee potential
Some business organizations struggle to evaluate worker potential as they appraise job performance.
Performance Appraisal Methods
The kind of performance appraisal system depends on its aim. A traditional method such as rating scales may be most appropriate if the emphasis is on choosing people for training, promotion and merit pay increases. Following are collaborative methods design to help workers in building & becoming more effective.
- 360-Degree Feedback
Includes input from many levels both inside the organization and outside the organization.
- Rating Scales
Rates workers according to specified factors and typically two kinds of factors are selected for evaluation. One is personal characteristics and second is job related.
- Critical Incidents
Needs to written records be maintained of highly unfavorable and highly favorable work actions
- Essay
Employee’s performance is written in a simple & brief narrative description by rater. The extreme behavior in the employee’s work is concentrated by this method, instead of the routine day to day performance.
- Work Standards
The performance of every worker is compared with an expected level of output or a predetermined standard.
- Ranking
On the basis of overall performance of employees, the rater simply places all employees in a given group in rank order.
A variation of comparison method is paired comparison in which the performance of every worker is compared with each other worker in the group.
- Forced Distribution
It is similar to normal frequency distribution, an appraisal approach where the rate is needed to assign persons in a work group to a limited number of classes.
- Forced—Choice and Weighted Checklist Performance Reports
A technique in which appraiser is provided a series of statements about a person and the rater highlights which items are least or most descriptive of the worker is refer to as the forced-choice performance report.
A technique whereby a rater fills a form same to forced choice performance report, but the different reactions are given various weights, is refer to as weighted checklist performance report.
- Behaviorally Anchored Rating Scales
A performance appraisal method that unites components of critical incidents methods and traditional rating scales
- Results-Based Systems
In a result-based system the subordinate and superior jointly agree on goals for the coming appraisal period.
- Assessment Centers
Some business organizations prefer to use an assessment center as an adjunct to their appraisal system, by recognizing the differences in the purposes and the difficulty that a PA system will have in accomplishing both purposes.
- Management by Objectives (MBO)
It is an objective-oriented performance appraisal method which needs those workers and supervisors ascertain goals for workers to fulfill during the rating period, and the workers appraise that how properly they have accomplished their goals.
Problems and Errors in Performance Appraisal
Several criticisms are raised on the many performance appraisal methods. Due to improper usage, many of the issues highlighted are not inherent in method. Following are the main problems that are present in performance appraisal methods.
- Lack of Objectivity
The lack of objectivity is the big weakness of traditional methods of performance appraisal. In appraisal methods, some subjectivity always exists. However objectivity is enhanced by some job related factors.
- Halo Error
It happens when a measurer perceives one component as of being great significance and gives a bad or good entire rating to a worker on the basis of that factor.
- Leniency/Strictness
The providing of undeserved low or high ratings
- Central Tendency
It happens when workers are rated incorrectly near the middle or average of the scale.
- Recent Behavior Bias
Recent behavior is remembered more clearly than the activities from more far away in the past. However, specified period of time is generally covered in performance appraisals and the performance of a person should be viewed for the overall period.
- Personal Bias
Performance appraisal conducting by supervisors may have bias associated to worker’s personal characteristics like religion, race, gender, age group or disability.
- Manipulating the Evaluation
In some cases, supervisors virtually control each angle of the process of appraisal and hence they are in the position to manipulate the system.
Functions of HRM Department in Performance Appraisal:
During the performance appraisal process, the human resource department performs the following roles:
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Development of the Appraisal System:
The HRM department helps in the formulation of the performance appraisal system by facilitating various departments in establishing performance standards & by selecting suitable appraisal methods on the basis of departmental requirements. The HRM department plays an important role in developing an effective performance appraisal system by performing monitoring functions during the process. -
Provide Rater Training:
It is proved through research that when appraisers are given relevant training, they become accurate raters. As a poor appraisal is of no use, raters must be provided with appropriate training because training helps in the avoidance and elimination of fundamental errors in the performance appraisal process. Therefore, the HRM department provides training facilities to raters. -
Monitoring & Evaluation of the Appraisal System:
Continuous monitoring is essential for effective implementation & smooth working of any system. Performance appraisal is quite significant for all organizations because certain important decisions are supported through appraisal results like demotions, promotions, and even terminations. So, to make a performance appraisal system more effective, the HRM department performs monitoring & supervision functions.
Performance Appraisal Failures:
In some cases, the purpose of performance appraisal is not accomplished which results in failure of the whole process. The performance appraisal process fails due to any of the following reasons:
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The manager does not hold sufficient information.
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The appraiser does not possess the required skills for conducting the process.
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Performance appraisal is not taken seriously by the manager.
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The manager may not be prepared for the process.
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Continuous feedback is not received by employees.
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Managers are not sincere and honest during performance appraisal.
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Discussion regarding employee development is ineffective.
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The language used is ineffective.
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The reward for performance is not sufficient.
Strategies for Improvement of Performance Appraisal:
In case of poor employee performance as a result of performance evaluation, the following strategies can be applied for improvement:
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Positive Reinforcement:
Positive reinforcement is the application of authentic consequences that enhance the chances that an individual will repeat the same behavior. Positive reinforcement includes:
• Letters of Recommendation
• Compliments
• Pay Increase
• Favorable Performance Appraisal
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Punishment:
Administration of an aversive consequence is referred to as punishment. Punishment includes:
• Shouting at or criticizing an employee
• Unappealing task assignment
• An employee being sent home without pay
Employee performance may also improve through punishment.
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Self-Management:
In many organizations, employees are given the option to take responsibility for routine functions in their fields. Resultantly, employees are not directly supervised & administrative responsibilities are handled by employees themselves. -
Employee Assistance Programs (EAPs):
Many organizations use specially designed employee assistance programs that help employees solve personal problems which would otherwise result in low productivity, absenteeism, etc.
