What is meant by Performance Appraisal?
It is a systematic and objective process of determining job-related behavior and results of employees and assessing their potential for future leadership roles in the organization. According to Dessler, performance appraisal is defined as evaluating an employee’s current or past performance relative to his or her performance standards. It, therefore, involves the following:
- Setting a work standard.
- Assessing the employee’s actual performance relative to these standards.
- Providing feedback to the employees with the aim of motivating that person to eliminate performance deficiencies or to continue to perform above par.
According to Kreitner, Performance Appraisal may be defined as evaluating individual job performance as a basis for making objective personnel decisions.
According to Troskie, Performance Appraisal is about ascertaining the value of a person’s work performance by assessing an employee’s strength and developmental needs using different measurements and evaluation methods.
Performance Appraisal Importance:
It is a technique to assess the performance of the individual in a fair and impartial way. The system of performance appraisal draws upon the talent from within on the basis of the experience gained by the employees in the organization. It compels the management to have a promotion policy based on the system of performance appraisal. It also gives justice to those employees who are efficient and capable.
The employees who work in the organization do not have the same or equal capacities and qualities. These are different from person to person. All the personnel is neither equally efficient nor equally capable. In order to keep their morale high, it is necessary to inform them of the level of their performance. It means an appreciation of the work of the efficient officials and a suggestion to the less efficient ones to work more efficiently. It can also be used as a tool to build up the morale of the personnel. This can be achieved by adopting a second system of performance appraisal.
It can also help the process of improving organizational health, vitality, and growth through the optimum utilization of human resources in the interest of the organization. It makes the personnel more aware of the need to work more and in an efficient manner. The functioning of the performance appraisal system is necessary not only for the individual’s work improvement but also for the overall improvement of the organization. It is necessary the adoption of a fair and impartial promotion policy which can go a long way in keeping the employees’ morale high. Performance Appraisal, as such, must be recognized as a very important activity of every modern personnel management system.
Principles of Performance Appraisal:
(1) Establish Clear Job Description- It shall be effective only when it is based on the current, realistic, and relevant job description of employees. A clear job description is a fundamental basis for developing the performance objectives of an employee. If the job description is inadequate or vague then performance objectives will be poor or difficult to establish. Once performance objectives are generated on a clear job description, evaluating the performance of individuals becomes a fruitful task for organizations.
(2) Give Performance Feedback- Once performance objectives have been established, it is crucial for managers to observe, monitor, and analyze the outputs or outcomes of employees in accomplishing these performance objectives. Managers must provide positive feedback, reinforcement, support, guidance, resources, and encouragement to employees periodically in order to ensure that employees stay focused on their performance objectives. While providing performance feedback, Newton’s Law of Motion can be applied to performance feedback as follows:
- The performance of employees continues to remain unchanged unless clear specific and meaningful feedback is given by managers for improving performance.
- Constructive feedback and positive reinforcement enhance the discretionary efforts of the employees as the primary diver to maximize their performance.
- For every negative or destructive feedback given by a manager. there is an equal and opposite reaction of the employee.
(3) Provide Performance Counseling- Managers should formally discuss employees’ work performance with them on a periodic basis. The frequency of the discussion should be enough to build up an atmosphere that encourages an exchange of ideas and feelings about the job with a view to developing new skills, and/or improving various aspects of job performance.
(4) Continuous Communication- The performance of employees can truly flourish in a climate of open communication in which the employee finds it easy and desirable to approach his manager for further help or discussions. Frequent communication between a manager and an employee clarifies mutual expectations, focus areas, and changes to be incorporated, and agrees upon an action plan for removing performance deficiencies.
Factors Affecting Performance Appraisal:
The following are the factors that directly or indirectly influence the system of performance appraisal.
(1) Superior Officer’s Value System- Usually, the superior officers are entrusted with the responsibility of making an assessment of the work of their subordinates and they write reports about them. A superior officer judges the performance of subordinates on the basis of his own value system. This subjective element acts as a source of big impact on the appraisal reports which are largely based on the superior’s final judgments.
(2) Dominant Work Orientation- At times, the performance appraisal report of a subordinate is written by his superior. This type of report is always influenced by the dominant work orientation of the superior officer. The superior records his assessment on the basis of the following factors-
- Preference for work of a dynamic nature.
- Preference for strict maintenance of routine work.
- Emphasis on the status and interpersonal relations.
- Emphasis on conformity to some ideology.
(3) Inter-Personal Relations- Many a time the psychological make-up of the subordinate and his superior influences the personal relationship between them. The subordinates very often try to take such actions as they feel are liked by their superiors. Such actions of subordinates satisfy the superior officer. Such psychological interpersonal relations introduce a considerable amount of subjectivity in the system of appraisal.
(4) Loyalty- The loyalty factor has a considerable influence on the performance assessment. This loyalty may be the product of common or shared values, objectives, emotional needs, interests-caste, religious, linguistic, or regional. The loyalty factor usually brings the superior and subordinate closer to each other. Informally, the superior can even consult the subordinate before recording his observations about his work. Likewise, the subordinate can influence his superior in his favor by demonstrating personal loyalty to him.
(5) Level of Achievement- The superior officer’s own level of achievement affects his appraisal of the performance of his subordinates. If the difference between the levels of achievement of the superior and a subordinate is quite big and wide, it can create a problem of adjustment. Consequently, it can affect the performance appraisal done by the superior in respect of the work of the subordinate.
So, there are several factors that influence the performance appraisal done by the superior officers in respect of their subordinates.
Performance Appraisal Objectives:
The main objective of performance appraisal is to reward those who are working efficiently and honestly. At the same time, it also aims at punishing those, who are inefficient and unfit to carry out their assigned responsibilities by denying them a possible reward.
Another important aim of Performance Appraisal is to help the management in securing its tasks more effectively.
The following are the main objectives of Performance Appraisal:
- To formulate a sound selection policy.
- To evolve an effective promotion and placement policy.
- To develop an improved system of career ad manpower planning.
- To chalk out a realistic training program.
- To formulate a good reward and punishment system.
- To develop instruments of an effective system of control and discipline.