Performance appraisal system forms an integral part of employee development process. This system will also capture the expectations of the employees from the company. The employee also plays an active role in setting his goal for the succeeding appraisal period. This will bring out the best of employees and will reduce attrition rates. The most important purpose of the appraisal is to improve future performance, both at individual level and at organizational level.
Appraisal is the evaluation of worth , quality or merit. In the organization context, performance appraisal is a systematic evaluation of personnel by superiors or others familiar with their performance. Performance appraisal is also described as merit rating in which one individual is ranked as better or worse in comparison to others. The basic purpose in this merit rating is to ascertain an employees eligibility for promotion.
―Performance appraisal is the process of evaluating the performance and qualifications of the employees in terms of requirement of the job for which he is employed, for the purpose of administration including placement, selection for promotion, providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally.‖
According to Breach;-
Performance appraisal is the systematic evaluation of the individual with regard to his or her performance on the job and his potential for development.
Feedback is important for us because ,it helps us to further understand why we may or may not be meeting specific targets. Feedback can also be used to modify our expectations, and to set new objectives over the course of the program. In business, a similar process takes place:
186 | P a g e
1. Planning what we would like to happen, based on insights from analysis of trends in our industry and events that impact our business.
2. Executing, by making decisions and taking action, based on the outcomes of planning activities.
3. Monitoring our progress towards a certain time-limited target or objective.
4. Planning what we would like to happen based on insights from analysis of trends in our industry and events that impact our business.
5. Executing, by making decisions and taking action, based on the outcomes of planning activities.
6. Monitoring our progress towards a certain time-limited target or objective.
HISTORY OF PERFORMANCE APPRAISAL SYSTEM
The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management.
As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world's second oldest profession!
There is, says Dulewicz (1989), a basic human tendency to make judgments about those one is working with, as well as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily.
The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate.
187 | P a g e
Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified.
The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order.
Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either.
Improve or continue to perform well
Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed.
For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance.
These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self-esteem, could also have a major influence.
Definition
―The overall objective of performance appraisal is to improve the efficiency of an enterprise by attempting to mobilize the best possible efforts from individuals employed in it. Such appraisals achieve four objectives including the salary reviews, the development and training of individuals, planning job rotation and assistance promotions‖.
―Performance Appraisal is the systematic, periodic and an impartial rating of an employee‘s excellence in matters pertaining to his present job and his potential for a better job‖
188 | P a g e
Characteristics of Performance Appraisal
The main characteristics of performance appraisal are as follows.
Performance appraisal is a process consisting of a series of steps.
It is the systematic examination of an employee‘s strengths and weaknesses in terms of the job.
Performance appraisal is a scientific or objective study.
It is an ongoing or continuous process wherein the evaluations are arranged
2. It serves to guide employee development.
3. It puts a psychological pressure on people to improve performance on the job.
4. It serves to maintain fair relationships in groups.
5. It makes executives more observant of their subordinates.
6. It serves as a means for evaluating the effectiveness of devices used for the selection and classification of workers.
7. Wage increase may be justified.
8. Deficiencies and shortcoming may be removed.
9. Employee may also introspect himself in the light of performance.
Factors Affecting Performance Appraisal Systems
Performance appraisal programs are affected by some factors. Therefore for implementing good appraisal systems the following are necessary.
189 | P a g e
1. It should be easily understandable. The forms, which are more difficult to read and understand, are not effective performance appraisal systems.
2. The appraisal programs must have support of all line people who administer it. If line people think it is too theoretical, too ambitious, and too unrealistic or that it has been foisted on them by ivory – tower staff consultants who have no comprehension of the demands on the time of the line operator.
3. The appraisal system should fit the organizational operations and structure the form constructed and the factors framed should be suitable for the organizational culture and structure.
4. The appraisal system should be valid and reliable.
5. The performance appraisal programs should have built in incentives.
190 | P a g e