Performance Appraisal

Meaning:  Performance Appraisal is a process supporting the use of human resource in an organization. It is possibly management’s most powerful tool in controlling performance and productivity of human resources in the organization. Used effectively, it can have tremendous strategic potential for governing employee behaviour and in turn, organization’s direction through its dynamic links to selection, training, career-path planning and reward systems.

Definitions  Scott, Clothier and Spriegel: “Performance Appraisal is the process of evaluating the employee’s performance on the job in terms of requirements of the job”.

Definitions  Yoder: “Performance Appraisal refers to all formal procedures used in working organizations to evaluate personalities and contributions and potential of group members”.

Definitions  “Performance Appraisal is the systematic, periodic and an impartial rating on an employee’s excellence in matters pertaining to his present job and to his potentialities for a better job”.

Performance Appraisal vs. Job Evaluation  Performance Appraisal identifies the differences among the employees in terms of their performance. But Job Evaluation is the analysis of various jobs to know the demands which the normal performance of particular jobs make on average performance of the employees concerned.

Performance Appraisal vs. Job Evaluation  The chief purpose of PA is to appraise the performance of individuals to take decisions like increase in pay, transfer, promotion, training etc. It also provides the employees with information regarding their strong and weak points. But the purpose of Job Evaluation is very limited i.e. to determine the worth of the job on the basis of demands made by it on the average workers.

Performance Appraisal vs. Job Evaluation  Performance Appraisal rates the man and not the job as it is concerned with assessing the abilities of the individuals. Job Evaluation rates the jobs in the organization that will be fair and equitable. It is used as a basis of wage structure in the organization.

Need, Importance and Advantages of Performance Appraisal  Scientific basis for judging the merit or worth of employees  Sound basis for promotion, demotion, transfer or termination of employees.  Helps in distinguishing between efficient and inefficient workers.  It reveals the defects in the selection procedure

Need, Importance and Advantages of Performance Appraisal  Helps to know the potentials of the subordinates systematically.  Helps correct placements.  It helps in constructively guiding the employees.  It prevents grievances and develops a sense of confidence  Protects the management against the charges of discrimination.

Essentials of Effective Performance Appraisal  The employees should be made aware in terms of goals, targets and behaviour  Job-related  Performance-based  Uniform and non-variable  Fair, just and equitable  Appraisers should be honest, rational and objective

Essentials of Effective Performance Appraisal  Superiors should be well trained to ensure uniformity, consistency and reliability  Reports should be examined meticulously before taking any positive or negative action.  Intra and inter-departmental consistency and uniformity should be ensured.

Essentials of Effective Performance Appraisal  There should be provision of appeals against appraisals to ensure confidence of the employees and their associations/unions.

Traditional methods of Performance Appraisal  Ranking Method  Paired Comparison  Graphic Scale method  Forced Distribution Method  Check-list Method  Critical Incident Method  Field Review Method