It is referred to as reviewing and evaluating the Job Performance of individual as well as team. An effective system is one that identifies the achievement and specifies plans for development. So performance appraisal is a process in which the employees and managers work together for the success of the organization by setting expectations, reviewing results and awarding performance.
The main purpose is to give an authentic picture of employee performance of past as well as future period. Therefore standards of performance are prepared that are helpful to achieve all the desired results.
Performance Appraisal Process
There are certain internal and external factors that affect the performance appraisal process. The legal factors stress the appraisal process to be nondiscriminatory. The union labor influences the process by claiming the pay increase and promotion on the basis of seniority. Furthermore the culture of the organization can either hinder the process of performance appraisal or promote it. At the start of the process, specific goals are established. And after that the workers of the organization should be aware of the expectations. Actually that are required from them in performing their tasks. At the end of the process, the performance of the employees is evaluated by the appraiser by comparing it with the established standards. Finally the results of the performance of employees are communicated to the respective employees.
Steps to Process of Performance Appraisal
Following are the main steps that are involved in the process.
- Specific performance appraisal objectives are identified.
- Job expectations (job analysis) are established.
- Work performed by the employees is examined.
- Effective performance is appraised.
- Appraisal results are discussed with the employees.
Performance Appraisal Objectives
There are two main objectives of the performance appraising process, which are as follows:
The decision of the evaluation is made through it. The training and development would be provided if there is any gap between the actual and standard performances.
However the main objective of the performance appraisal is to improve the performance of employees. That ultimately improves the overall performance of the organization. So there are many useful aspects of performance appraisal and some of them are as follows.
Human Resource Planning
When the assessment of the human resource is made then there should be proper information available. Actually that can explain the potential and effectiveness of all of the employees of the organization, especially the top executives.
Recruitment and Selection
The future performance of job applicants can be predicted through the performance evaluation.
Training and Development
The requirements for the training and development of an employee can be accessed through performance appraisal. So the deficiencies regarding the performance of employees are identified which helps the management. Particularly to design certain training and development programs that assist the relative employee to cover their deficiencies.
Career Planning and Development
The career planning and development can be analyzed from both the individual as well as organizational perspectives.
The decisions about the increment in the pay are based on the results of the performance appraisal.
Internal Employee Relation
The decision making in the fields of internal employee relations is supported by the data of performance appraisal. Such as promotion, demotion, motivation, termination, transfer, layoff etc.
Assessment of Potential of Employee
With the help of performance appraisals, the potential of the employee can be assessed.
Performance Appraisal Analysis
The performance appraisals evaluate the following aspects of an employee performance.
Traits: Many organizations evaluate certain traits of employees in the performance appraisal like appearance, attitude, initiative etc.
Behaviours: The employee task related behavior is evaluated when his task’s outcome is difficult to ascertain.
Task Outcomes: When the ends are considered to be more important than the means. So in such cases the outcomes of tasks are evaluated preferably.
Improvement Potential: The potential of the employee is evaluated to determine the need for any improvement.
Performance Appraisal Methods
The performance appraisal method depends on the purpose of the performance appraisal. When the employees are selected for the training, promotion and merit pay increase. Then the rating scale method is more appropriate to employ. When the development of employees is initiated, then the collaborative method is effective. Following are some of the common methods of performance appraisal.
360-Degree Feedback: The inputs from certain internal and external sources are used in this method.
Rating Scales: In this method employees are rated on the basis of two important factors which are as follows:
- Job Related
- Personal Characteristics
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Critical Incidents: When there is a requirement of recording of highly unfavorable and favorable actions. Then critical incidents method is used.
Essay: In such cases the concise narration is written by the rater about the performance of the employees. So this method is useful to consider the strong behavior in the work of employees rather than normal work.
Work Standards: In this method the performance of each employee is compared to an established standard or required level of output.
Ranking: In this method, the overall performance of employees is rated in a given set of groups. Also paired comparison is made in which is a varied method of ranking. Especially in which performance of each employee of the organization is compared with every other employee.
Forced Distribution: In this method the rater puts individuals in certain work groups which are limited in number just like frequency distribution.
Results Based Systems: In such a method, the senior and junior employees are collectively agreed on certain goals for the coming appraisal period.
Assessment Centers: When organizations recognize a difference in the purpose of performance appraisal along with the difficulty to attain that purpose. Then assessment center is used as an alternative to the performance appraisal.
Management by Objective: This method is goal oriented in which the employees and supervisors are allowed to set the objectives of employees. That would be met during the rating period and the appraisal is made by the employees. Particularly to check how effectively they would have accomplished the objectives.
Problems in Performance Appraisal
There are many methods that are strongly criticized. In most of the cases, the problems in the are not natural but are related to the ineffective usage. Following are some of the problems:
Lack of Objectivity: It is a basic weakness in many traditional methods that they lack objectivity. Although there may be some portion of subjectivity, the inclusion of job related factors should enhance objectivity.
Halo Error: This is a problem related to method in which the evaluator considers a single factor as prime important. Although assigns a bad or good rating on the basis of only that factor. While excluding the importance of other factors in the criteria.
Strictness: This problem is related to the provision of undeserved low or high ratings.
Central Tendency: In this problem the employees are rated incorrectly near the middle or average of the scale.
Recent Behaviour Bias: It is a natural fact that recent behaviors are remembered more clearly than the behaviors shown in the distant past. However the appraisal is for a specified period of time and the performance of employees are evaluated for that certain period.
Personal Bias: When the performance appraisal is carried out by the supervisor, then there comes an element of bias in the process. Actually on the basis of religion, gender, race, age group or disability.
Manipulating the Evaluation: In certain situations, almost every aspect of this method is virtually controlled by the supervisor which may result in the manipulation of the appraisal system.
Function of HRM in the Performance Appraisal
During the process, the Human Resource Management performs the following roles.
Development of the Appraisal System
HRM department helps in the formulation of the performance appraisal system by facilitating various departments in establishing the standards of performance. Although by getting the suitable methods on the basis of the requirements of the specific department. SO the HRM department plays an important role in the development of an effective system. Just by performing the function of monitoring during the process.
Provide Rater Training
It is proved through research that when the appraisers are given the relevant training. Then they become accurate raters. As a worse appraisal is of no use so raters must be provided with appropriate training. Since because training can help in the avoidance and elimination of the fundamental errors. So the HRM department provides the training facility to the raters.
Monitoring & Evaluation of the Appraisal System
Continuous monitoring is essential for the effective implementation and smooth working of any system. Such appraisals are quite significant for all the organizations. Because there are certain important decisions that are supported through the results of the performance appraisals. Such as demotions, promotions and even terminations. So to make a system more effective, the HRM department performs the function of monitoring and supervision.
Performance Appraisal Failures
In some cases the purpose of these appraisals are not accomplished which results into the failure of the whole process. These process fails due to any of the following reasons.
- A manager does not hold the sufficient information.
- The appraiser does not possess the required skills for conducting the process.
- Performance appraisals are not seriously taken by the manager.
- A manager may not be prepared for the process.
- The continuous feedback is not received by the employees.
- Also the managers are not sincere and honest before the performance appraisals.
- Moreover, the discussion of the development of employees is ineffective.
- And the language used is ineffective.
- Or the reward for performance is not sufficient.
Performance Appraisal Improvement Strategies
In case of the poor performance of employees as a result of the performance evaluation. Then following strategies can be applied for the improvement of the performances of the employees.
Positive reinforcement is the application of authentic consequence that enhances the chances. That the individual would repeat the same behavior leading to that consequence. So the positive reinforcement includes the following examples.
- Letter of Recommendations
- Pay Increase
- Favorable Performance Appraisal
Administration of an aversive consequence is referred to as punishment. Where punishment includes the following examples:
- Shouting or Criticizing an Employee
- Unappealing Task Assignment
- An Employee is Sent Home without Pay
The performance of employees is improved through punishment.
In many organizations, employees are given the option to take the responsibility of routine functions in their fields. Resultantly the employees are not directly supervised for their work. So all the administrative responsibilities are taken by the employees.
Employee Assistance Programs (EAPs)
Many organizations are using specially designed programs of employee assistance that assist the employees. Specifically to solve their personal problems which would otherwise result in the low productivity, absenteeism etc.
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