The meaning of the word “appraisal” is “to fix a price or value for something”. This is used in finance in terms such as project appraisal or financial appraisal where a value is attached to a project. Similarly performance appraisal is a process in which one values the employee contribution and worth to the organisation.
The objectives of performance appraisal are:
1.To help better current performances
2. To help in development of the employee.
3.To determine training and development needs.
4. To give employee feedback and counsel them
5. To review performance for salary purposes.
Employees across the entire organisation are appraised of their performance. This could be done annually, twice a year, periodically depending the need of the organisation
The various kinds of performance appraisal systems are:
1.Personality based performance appraisal system:
Here the appraiser is supposed to rate the personality traits of the person being appraised.
This is not in much in organisations as it very subjective and judgmental. It could also be biased and prejudiced.
2.Competence based performance appraisal system:
Here the job analysis is used and the employee is appraised for the skills he exhibits. For e.g. if his job entails dealing with the clients then he is judged foe his effectiveness in dealing with them. This enables both the organisation and the employee as to what deficiencies are to be overcome and can be useful in providing training to the employee to better his performance.
Result based performance appraisal system:
This system concentrates on the final results achieved by the employee irrespective of his personality or deficiencies. This is totally related to the job and concentrates on the end results that are more important to the organisation.
The performance appraisal system has to be transparent and the employee should be taken into full confidence. In many cases employees themselves are given a chance to conduct a self-appraisal. Performance appraisal is a case of joint problem solving by the organisation and the employee. However the organisation must also take care of future potential and not get bogged down by current performance.
Normally the immediate supervisor does the appraisal. Some organisations also have a peer group performance appraisal where colleagues rate the performance.
The HR person must also ensure that line managers are properly trained for carrying out the appraisal including interviewing techniques and on how to give feedback. The managers must also be trained to look at the cases objectively outside of their personal opinion of the candidate.