PERFORMANCE APPRAISAL�PART 1

SUBMITTED BY:

MRS. BINOO GUPTA

ASSOCIATE PROFESSOR

P.G. DEPT. OF COMMERCE & MANAGEMENT

HANS RAJ MAHILA MAHA VIDYALAYA, JALANDHAR

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Performance appraisal is the process of measuring quantitative & qualitatively an employee’s past or present performance against the background of his expected role performance and about his future potential of an organisation.

Meaning of Performance Appraisal

Performance appraisal is the assessment of an individual’s performance in a systematic and orderly process in which the performance is being measured against the established requirements of the job such as job knowledge, quality and quantity of output, initiative, leadership skills, dependability, judgement and supervision etc.

Performance appraisal refers to the entire process of appraising performances and giving feedback to employees and offering rewards or punishments.

A performance appraisal is a regularly scheduled formal process evaluating an employee’s overall performance and contribution to the company with the goal of improving that performance. It can also be referred to as the performance review, performance evaluation, or employee appraisal.

Performance appraisal has three basic functions:

1. to provide adequate feedback to each person on his or her performance;
2. to serve as a basis for modifying or changing behavior toward more effective working habits; and
3. to provide data to managers with which they may judge future job assignments and compensation. 

Definitions of Performance Appraisal

“Performance appraisal is a formal and systematic process by means of which the relevant strengths and weaknesses of the employees are identified, measured, recorded and developed.”

- Slabbert and Swanepoel

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“ It is the evaluation or appraisal of the relative worth to the company of a man’s services on his jobs. ”

- Alford & Betty

“Performance appraisal includes all formal procedures used to evaluate personalities and contributions and potential of group members in a working organisation. It is a continuous process to secure information necessary for making correct and objective decisions on employees.

Dale Yoder

Acc. to Wayne Cascio, “Performance Appraisl is a the systematic description of employee’s job relevant, strength, weakness Performance appraisal may be conducted once in every 6 months or once in a year. The basic idea of the appraisal is to evaluate the performance of the employee, giving him a feed back. Identify areas where improvement is required so that training can be provided. Give incentives and bonus to encourage employees etc.

Acc. to Edward Flippo, “ Performance Appraisl is a systematic, periodic & an impartial rating of an employee’s excellence in matters pertaining to his present job & his potential for a better job”..

Objectives of Performance Appraisal

• Work related objectives:
• It helps to improve efficiency.
• To help management in fixing employees according to their capacity, interest, qualifications and capability.
• Career development objectives:
• It help to identify the potential and plan career growth.
• To plan promotions, demotions, transfers etc. of the employees.
• Communication:
• It helps in providing feedback to employees so that they can be made aware about their working status and make changes as required.
• Developing positive superior-subordinate relations and reducing grievances.
• Organisational objectives:
• It serves as a basis for wage and salary administration.
• It assists for planning suitable training and development programs.

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Process of Performance Appraisal

1. Setting up of Performance Standards: The employees will have to be rated against the standards set for their performance. These standards will help in setting criteria for evaluating performance. There will be a base on which the performance will be evaluated and said to be good, average and bad.

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2. Communicating the standards: The standards should be communicated to the employees so they know what is expected from them and try to make their performance equal or above them.

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3. Measuring the actual performance: The actual performance of the employees is to be evaluated. This may be done through personal observance, statistical reports, oral reports and written reports. It helps in analyzing what has been done.

4. Comparing the actual with standards: The actual performance is now compared with the standards set. The performance of employees are judged on the basis their potential for growth and advancement. Deviations are also noted at this stage.

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5. Discussing Results: The assessment reports are discussed with concerned employees. The weaknesses, strengths and difficulties are indicated for helping employees to improve their performance.

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6. Taking corrective actions: The whole evaluation process will be useful only when corrective actions are taken as per reports. They may be in the form of advice, counsel, warning, additional training , special assessments, coaching etc. These actions will be useful in helping employees to improve their performance in future.

Importance of Performance Appraisal

Efficiency of employees

Development of employees

Basis for important decisions

Helps in improving performance

Improves group relations

Alert supervision

Feedback to employees

Enhance employee performance

1. Feedback to the employee :- Performance appraisal is beneficial because it provides feedback to the employee about his performance. It identifies the areas for improvement so that employee can improve itself.
2. Training and development :- Due to performance appraisal it is easy to understand what type of training is required for each employee to improve himself accordingly training programs can be arranged.
3. Helps to decide promotion :- Performance appraisal provides a report about the employee. Based on this report future promotions are decided, incentives, salary increase is decided.
4. Validation of selection process :- Through performance appraisal the HR department can identify whether any changes are required in the selection process of the company normally a sound selection process results in better performance and positive appraisal.

5. Deciding transfers and lay off of the worker :- Employee with specific talent can be transferred to places where their talents are utilized properly; similarly decisions regarding termination of employees depend upon performance appraisal reports.

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6. Human resource planning and career development:- Companies can plan for future vacancies at higher levels based on performance appraisal reports. Similarly career planning can be done for the employee on the performance appraisal report.

Essentials of Performance Appraisal �

1. Mutual trust and confidence: The atmosphere of mutual trust and confidence is must in any type of organization. Both the supervisor and subordinate should be able to discuss matters clearly and suggestions must be duly welcomed. This will be beneficial for the organization and lead to improvement of employees.
2. Reliability: The top management must create an environment of reliable appraisal in the organization. Goal orientation, open communication and informal relations are the basic elements of such an environment.
3. Validity: It is the extent to which an instrument actually measure what it actually intends to measure. Appraisals must satisfy the condition of validity by measuring what they are supposed to measure. This may be done for promotion, demotion , transfer etc.
4. Specific objectives: Some specific objectives should be there to design the appraisal plan. These objectives should be relevant, timely and open. All the factors are to be considered and collected to achieve the objectives of appraisal.

5. Standardization: Appraisal decisions affect all of the employees of the group so appraisal forms, procedures, administration techniques and ratings should be standardized. It will help to ensure uniformity and comparison of ratings.

6. Training to appraisers: The appraisers should be selected and trained properly so that they have no personal biases and possess the necessary capabilities for objective evaluation of the employees.

7. Job relatedness: The evaluators should focus on job related behavior and performance of the employees. The results of the performance should be given due weight rather than personality traits. The individual as a person should never be criticized.

8. Feedback: The results of the appraisals, particularly when they are negative should be immediately communicated to the employees so that they may try to improve their performance.

10. Individual differences: While designing an appraisal system, individual differences in the organization should be recognized. Which particular technique is to be adopted for appraisal should be governed by such factors as the size, financial resources, philosophy and objectives of an organization.

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11. Post appraisal interview: After appraisal an interview with the employees should be arranged. It is necessary to supply feedback to know the differences under which the employees work and to identify their training needs.

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12. Review and appeal: There should be a provision of appeals against appraisals to ensure confidence of employees and their unions

1. Halo effect :- In this case the superior appraises the person on certain positive qualities only. The negative traits are not considered. Such an appraisal will no give a true picture about the employee. And in some cases employees who do not deserve promotions may get it.

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• Horn effect :- In this case only the negative qualities of the employee are considered and based on this appraisal is done. This again will not help the organization because such appraisal may not present a true picture about the employee.

LIMITATIONS OF PERFORMANCE APPRAISAL

3. Central tendency :- In this case the superior gives an appraisal by giving central values. This prevents a really talented employee from getting promotions he deserves and some employees who do not deserve any thing may get promotion.

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4. Leniency and strictness :- Some bosses are lenient in grading their employees while some are very strict. Employee who really deserves promotions may loose the opportunity due to strict bosses while those who may not deserve may get benefits due to lenient boss.

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5. Spill over effect :- In this case the employee is judged +vely or –vely by the boss depending upon the past performance. Therefore although the employee may have improved performance, he may still not get the benefit

6. Fear of loosing subordinates and spoiling relations :- Many bosses do not wish to spoil their relations with their subordinates. Therefore when they appraise the employee they may end up giving higher grades which are not required. This is a n injustice to really deserving employees.

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7. Goodwill and techniques to be used :- Sometimes a very strict appraisal may affect the goodwill between senior and junior. Similarly when different departments in the same company use different methods of appraisal it becomes very difficult to compare employees.

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8. Paper work and personal biased :- Appraisal involves a lot of paper work. Due to this the work load of HR department increases. Personal bias and prejudice result in bosses favoring certain people and not favoring others.6