Performance Appraisal Performance appraisal (PA), also known as employee appraisal, is the systematic evaluation of the performance and productivity of an employee on the job in relation to certain pre-established criteria and organizational objectives. It is carried out to understand the potential of the employee for further growth and development. It is a formal, structured system of measuring, evaluating job related behaviours and outcomes to discover reasons of performance and how to perform effectively in future so that both the employee and the organization get benefitted. Performance appraisal is a management tool which is used for effective utilization of the employees as well as for planning their career development and consists of regular review of employee performance within organizations. An effective PA system will have the following.
Feedback is an important component of performance appraisal. While positive feedback is easily accepted, negative feedback often meets with resistance unless it is objective, based on a credible source and given in a skillful manner. Main component of a PA system is shown in Fig.1. Fig 1 Main component of a PA system Objectives of performance appraisal Performance appraisal system in an organization has the following objectives. Process of the performance appraisal system Performance appraisal involves an evaluation of actual performance against desired performance in an organization. It also helps in reviewing various factors which influence the performance of the employees. Management can plan performance development strategies in a structured manner for every employee of the organization. In doing so, management keeps the organization’s goal in mind and aims at optimal utilization of all available resources. Performance appraisal is a multistage process in which communication plays an important role. There are eight stages in the process of performance appraisal process. These stages are described below. Communication is at the core of any performance appraisal system. Communication can be either upward or downward. Downward communication is from management to the employees to be appraised. This consist of usually conveying to the employee about his performance, action needed by the employee for his improvement and his training needs etc. As the information flows downward, it becomes more individualized and detailed. Upward communication is from lower to higher levels. Through this process, employee communicates his needs, aspirations and goals. As information flows upward, it has to become brief and precise because of the channels through which it has to pass. There are many approaches for performance appraisal which is a multistage process involving several activities. Some of these approaches are given below. Techniques used in performance appraisal There are several techniques which are being used for the performance appraisal. Each one of them has strong points as well as limitations. Some of the commonly used techniques for the performance appraisal are essay appraisal method, graphic rating scale method, field review method, forced choice rating method, forced distribution method, critical incident appraisal method, checklist, forced choice method, management by objectives, work standard approach, 360 degree feedback, and ranking method. A performance appraisal system can be designed based on intuition, self analysis, personality traits, behaviourial methods and result based techniques. Different approaches and techniques can be blended, depending on the goals of performance appraisal in the organization and the type of review. For example, management by objectives, goal-setting and work standard methods are effective for objective coaching, counseling and motivational purposes. Critical incident appraisal is best suited when supervisor’s personal assessment and criticism are essential. A carefully developed and validated forced-choice rating can provide valuable analysis of the individual when considering possible promotion to supervisory positions. Combined graphic and essay form is simple, effective in identifying training and development needs, and facilitates other management decisions. Components of the performance appraisal form The following are the components of performance appraisal form. The following are the positive aspects of the PA system. Advantages of performance appraisal Disadvantages of performance appraisal |