After an employee has been selected for a job, has been trained to do it and has worked on it for a period of time, his performance should be evaluated. Performance appraisals or Evaluation is the process of deciding how employees do their jobs. Performance here refers to the degree of accomplishment of the tasks that make up an individual’s job. It indicates how well an individual is fulfilling the job requirements. Often the term is confused with efforts which means energy expended and used in a wrong sense. Performance is always measured in terms of results. A bank employee for example may exert a great deal of effort while preparing for the CAIIB examination but manages to get a poor grade. In this case the effort expended is high but performance is low.
Performance appraisal is a method of evaluating the behaviour of employees in the work spot normally including both the quantitative and qualitative aspects of job performance. It is a systematic and objective way of evaluating both work related behaviour and potential of employees. It is a process that involves determining and communicating to an employee how he or she is performing the job and ideally, establishing a plan of improvements.
What is performance appraisal?
1) Identification: means determining what areas of work the manager should be examining when measuring performance – essentially focusing on performance that affects organizational success.
2) Measurement: entails making managerial judgments of how good or bad employee performance was.
3) Management appraisals should be more than a post-mortem examination of past events, criticizing or praising workers for their performance in the preceding year. Instead it must take a future oriented view of what workers can do to realize their potential.
The main characteristic of performance appraisal may be listed thus:
The appraised is a systematic process involving three steps:
1) Setting work standards
2) Assessing employee’s actual performance relative to these standards
3) Offering feedback to the employee so that he can eliminate deficiencies and improve performance in due course of time.
It tries to find out how well the employee is performing the job and tries to establish a plan for further improvement
The appraisal is carried out periodically according to a definite plan. It is certainly not a one shot deal.
Performance appraisal is not a past oriented activity, with the intention of putting poor performers in a spot. Rather, it is a future oriented activity showing employees where things have gone wrong, how to set everything in order and deliver results using their potential in a proper way.
Performance appraisal is not job evaluation. Performance appraisal refers to how well someone is doing an assigned job. Job evaluation on the other hand determines how much a job is worth to the organization and therefore, what range of pay should be assigned to the job.
Performance appraisal is not limited to calling the fouls . Its focus is on employee development. It forces managers to become coaches rather than judges. The appraisal process provides an opportunity to identify issues for discussion to eliminate any potential problems and set new goals or achieve high performance.
Performance appraisal may be formal or informal. The informal evaluation is more likely to be subjective and influenced by personal factors. Some employees are liked better than others and have for that reason only, better chances of receiving various kinds of rewards than others. The formal system is likely to be more fair and objective since it is carried out in a systematic manner, using printed appraisal forms
Source: HRM Book