Performance appraisals are planned, developed and implemented through a series of steps:
Establish performance standard: Appraisals system requires performance standards, which serve as a benchmark against which performance is measured. To be useful, standards should relate to the desired results of each job. What about those appraisals which are carried out without any clear cut criteria? Observe the following case:
Raju, who had just finished his first year as an office assistant was summoned to his manager’s office for his annual performance review. Slightly uneasy but confident, that he had done a good job, Raju arrived at his manager’s office at the appointed hour. After the initial exchange of pleasantries, Raju was given a copy of an appraisals form which was completed as follows:
Raju got the shock of his life. Why did he not receive any negative feedback about his performance until now? How did the manager rate his personality and interpersonal behaviours so badly? Looking at his unhappy reactions, the manager proceeded to explain how he had failed to win the confidence of his teammates. He also advised Raju to talk to him directly instead of writing to the Director of the company. Speechless and dejected Raju left the office wondering as to what he must to do to improve his performance and obtain better grades.
To avoid embarrassments of this kind, performance standards must be clear to both the appraiser and the appraisee. The performance standards or goals must be developed after a thorough analysis of the job. Goals must be written down. Just talking about them is not enough. They must be measurable within certain time and cost considerations. For example, the regional sales officer may be asked: The sales of colour television sets in Ghaziabad must increase by 1,000 per month in the next 6 months and the budget towards promotional expenses would Rs 5,000 per month.
Communicate the standards:
Performance appraisal involves at least two parties the appraiser who does the appraisal and the appraisee whose performance is being evaluated. Both are expected to do certain things. The appraiser should prepare job descriptions clearly, help the appraisee set his goals and targets; analyse results objectively offer coaching and guidance to the appraisee whenever required and reward good results. The appraisee should be very clear about what he is doing and why he is doing it. For this purpose performance standards must be communicated to appraisees and their reactions should be noted down right away / if necessary these standards must be revised or modified. As pointed out by De Cenzo and Robbins too many jobs have vague performance standards and the problem is compounded when these standards are set in isolation and do not involve the employees.
Measure actual performance:
After the performance standards are set and accepted , the next step is to measure actual performance. This requires the use of dependable performance measures the ratings used to evaluate performance. Performance measures to be helpful must be easy to use, reliable and report on the critical behaviours that determine performance. Four common sources of information which are generally used by managers regarding how to measure actual performance are personal observation, statistical reports, oral reports and written reports.
Performance measure may be objective or subjective. Objective performances measure are indications of job performance that can be verified by others and are usually quantitative. Objective criteria include quality of production, degree of training needed and accidents in a given period, absenteeism, length of service etc. Subjective performance measures are ratings that are based on the personal standards or opinions of those doing the evaluation and are not verifiable by others.