WHAT IS PERFORMANCE APPRAISAL?

PERFORMANCE AAPRAISAL

Performance appraisal or Performance evaluation is a method of evaluating the behaviour of employees in a work place, normally including both the quantitative and qualitative aspect of job performance. Performance here refers to the degree of accomplishment of the tasks that makeup an individual‘ job. It indicates how well an individual fulfilling the job demands. Performance is measured in terms of results. Thus, Performance appraisal is the process of assessing the performance or progress of an employee, or a group of employees on th given job, as well as his potential for future development. Thus, performance appraisal comprises all formal procedures used in organisations to evaluate contributions, personality, and potential of individual employees. In other words, performance appraisal includes the comparison of performance scales of different individuals holding similar areas of work responsibilities and relate to determination of worth of the scales for the achievement of organisaton objective. Definitions of Performance Appraisal : Performance Appraisal has been defined as follows : 1. According to Edwin Flippo, ―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.‖ 2. According to Cummings, ―The overall objective of performance appraisal is to improve the efficiency of an enterprise by attempting to mobilise 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.‖
3. According to Wendell French, Performance appraisal and review in the formal, systematic assessment of how well employees

are performing their jobs in relations to establish standards and the communication of that assessment to employees.

 4. According to Dale Yoder, ―Performance appraisal includes all formal procedures used to evaluate personalities and contributions and potentials of group members in a working organisation. It is a continuous process to secure information necessary for making correct and objective decisions on employees.‖ Performance appraisal is a systematic evaluation of the employees performance at work. Performance appraisal is a process of evaluating an employees performance on a job in terms of its requirement. It is a process of estimating or judging the value, excellence, qualities of status of some object, person or thing. Performance appraisal is a formal programme in an organisation which is concerned with not only the contributions of the members who form part of the organisation, but aims at spotting the potential also. The satisfactory performance is only a part of the system as a whole and the management needs more information than mere performance ratings of the subordinates. Performance appraisal is the systematic evaluation of the individual with respect to his performance on the job and his potential for development. Performance appraised is collcerned with determining the differences among the employees working in the organisation. Generally, the evaluation is done by the individual‘s immediate superior in the organisation and whose performance is reviewed in turn by his superior. Thus, everyone in the organisation who rates others below him is also rated by his superiors, Performance appraisal employs rating techniques for comparing individual employees in the work group, in terms of personal qualities or deficiencies and the requirements of their respective jobs

 Characteristics of Performance Appraisal : The following are the characteristics of Performance Appraisal 

1. A Process : Performance appraisal is not a one-act play. It is rather a process that involves several acts or steps. 

2. Systematic Assessment : Performance appraisal is a systematic assessment of an employee‘s strengths and weakness in the context of the given job. 

3. Main Objective : The main objective of it is to know how well an employee is going for the organisation and what needs to be improved in him. 

4. Scientific Evaluation : It is an objective, unbiased and scientific evaluation through similar measure and procedures for all employees in a formal manner. 5. Periodic Evaluation : Although informal appraisals tend to take place in an unscheduled manner (on continuous) basis with the enterprises a supervisors evaluate their subordinates work and as subordinates appraise each other rand supervisors on a daily basis, yet the systematic (i.e., formal) appraisal of an individual employee is likely to occur at certain intervals through out that person‘s history of employment (say quarterly, six monthly, annually, etc.) 6. Continuous Process : In addition to being periodic performance usually is an ongoing process. It means that appraisals are regularly scheduled and are not dumped on the employee on whimsical dates without relevance. The process has not been broken in person‘s history of employment however, the periodicity of appraisal may be changed as per needs of the situation. 7. Employee Feedback : Performance appraisal system provides information to employees on how well they are doing their jobs, and this feedback is provided to them when it is relevant. Performance appraisal is also called Employee Rating and Service Rating. Performance appraisal and merit rating are used synonymously. But strictly speaking performance appraisal is a wider term than merit-rating. In merit rating the focus is on judging the calibre and worth of an employee so as to place him on right job. On the other hand, performance appraisal focuses on the performance and future potential of the employee. Its aim is not simply to decide placement or promotion but to measures the value of worker in different job situations.
PURPOSE OF PERFORMANCE APPRAISAL The following are the main purposes of performance appraisal.

 1. Appraisal Procedure : It provides a common and unified measure of performance appraisal, so that all employee are evaluated in the same manner. It gives an indiscriminatory rating of all the employees.

 2. Decision Making : Performance appraisal of the employees is extremely useful in the decision making process of the organization. In selection, training, promotion, pay increment and in transfer, performance appraisal is very useful tool. 

3. Work Performance Records : Performance appraisal gives us a complete information in the form of records regarding every employee. In the case of industrial disputes even arbitrator accepts these records in the course of grievance handling procedure. 

4. Employees Development : Performance appraisal guides the employees in removing their defects and improving their working. The weaknesses of the employee recorded in the performance appraisal provide the basis for an individual development programme. If properly recorded and used, the performance appraisal gives the fair opportunities to employees to correct and rectify their mistakes. 

5. Enables Supervisors to be More Alert and Competent : Performance appraisal enables supervisor to be more alert and competent and to improve the quality of supervision by giving him a complete record of employee's performance. He can guide an employee, where he is prone to commit mistakes. 

6. Merit Rating : Merit rating is another name of performance appraisal, it gives supervisors a more effective tool for rating their personnel. It enables them to make more careful analysis of employee's performance and make them more productive and useful.

 7. Improves Employer Employee Relations : Performance appraisal is not only a useful guide for the supervisors and employees but it improves the employer-employee relations by creating a more conductive and amicable atmosphere in the organization. It also stimulates free exchange of thoughts and ideas between the supervisor and his men. In this way performance appraisal bridges the emotional gap between the employer and employee by bringing them more close and by reducing man-to-man differences in the organization.

USES OF PERFORMANCE APPRAISAL 

Performance appraisal helps the employees in Self-improvement and Self-development. It helps the management in taking decisions about Placement, Promotions, Transfer, Training and Development, etc. It helps to achieve individual and organisational goals. It is useful to the employees and the organisation. Therefore, Performance Appraisal should be conducted objectively from time to time. The employees should not oppose it. However, they should see that the performance appraisals are systematic, fair and impartial. It should not be for punishing the employees. It should be for improving the employees and their performances. 

1. Help in Deciding Promotion : It is in the best interest of the management to promote the employees to the positions where they can most effectively use their abilities. A well-organised, development and administered performance appraisal programme may help the management in determining whether an individual should be considered for promotion because the system not only appraises the worth of the employee on the present job but also evaluates his potentialities for higher job.

 2. Help in Personnel Actions : Personnel actions such as lay-offs, demotions, transfers and discharges etc. may be justified only if they are based on performance appraisal. While in some cases, actions are taken because of unsatisfactory performance of the employee, in some other cases it may be called for due to some economic conditions beyond control such as changes in production process. In former case, the action can only be justified on the basis of the result of performance appraisal. 

3. Help in Wage and Salary Administration : The wage increase given to some employees on the basis of their performance may be justified by the performance appraisal results. In some cases appraisal, i.e., merit and seniority are combined for higher salaries on better positions.

 4. Help in Training and Development : An appropriate system of performance appraisal helps the management in devising training and development programmes and in identifying the areas of skill or knowledge in which several employees are not at par with the job requirements. Thus the appraisal system points out the general training deficiencies which may be corrected by additional training, interviews, discussions or counselling. It helps in spotting the potential to train and develop them to create an inventory of executives.

 5. Aid to Personnel Research : Performance appraisal helps in conducting research in the field of personnel management. Theories in personnel field are the outcome of efforts to find out the cause and effect relationship between personnel and their performance. By studying the various problems which are faced by the performance appraiser, new areas of research may be developed in personnel field.

 6. Help in Self Evaluation : Performance appraisal helps the employee in another way also. Every employee is anxious to know his performance on the job and his potentials for higher jobs so as to bring himself to the level of that position.

7. Help in Creating Healthy Competition : Performance appraisal brings out the deficiencies and shortcomings of the employees. Discussions between rater and rates may be conducted in a spirit of co-operation and mutual understanding. This gives an opportunity to the employer to have an insight on their performance and to take corrective measures to improve upon their performance. 

Essentials of an Effective Performance Appraisal System : The following are the essentials of an effective Performance Appraisal System :

 1. Mutual Trust : The existence of an atmosphere of confidence and trust so that both supervisor and employee may discuss matters frankly and offer suggestions which may be beneficial for the organisation and for an improvement of the employee. An atmosphere of mutual trust and confidence should be created in the organisation before introducing the appraisal system. Such an atmosphere is necessary for frank discussion of appraisal. It also helps to obtain the faith of employees in the appraisal system.

 2. Clear Objectives : The objectives and uses of performance appraisal should be made clear and specific. The objectives should be relevant, timely and open. The supervisor must very thoroughly evaluate the employee‘s performance so that he is capable of meeting challenges about his ratings of his subordinate.

 3. Standardisation : Well-defined performance factors and criteria should be developed. These factors as well as appraisal form, procedures and techniques should be standardised. It will help to ensure uniformity and comparison of ratings. The appraisal techniques should measure what they are supposed to measure. These should also be easy to administer and economical to use. The appraisal system should be performance based and uniform. Employees should be made fully aware of performance standards and should be involved in setting the standards. 

4. Training : Evaluators should be given training in philosophy and techniques of appraisal. They should be provided with knowledge and skills in documenting appraisals, conducting post appraisal interviews, rating errors, etc.
5. Job Relatedness : The evaluators should focus attention on job-related behaviour and performance of employees. The results of performance rather than personality traits should be given due weight. Suggestions for improvement should be directed towards the objective facts of the job (such as work schedules, output, reports completed, sales made, losses incurred, profits earned,

accomplishments, etc.). Joint plans for the future must be developed after consultation with subordinates. The individual as a person should never be criticised. 6. Strength and Weaknesses : The raters should be required to justify their ratings. The supervisor should try to analyse the strength and weaknesses of an employee and advise him on correcting die weakness.

 7. Feedback and Participation : Arrangements should be made to communicate the ratings to both the employees and the raters. The employees should actively participate in managing performance and in the ongoing process of evaluation. The superior should play the role of coach and counseller. The overall purpose of appraisals should be developmental rather than judgmental. 

8. Individual Differences : While designing the appraisal system, individual differences in organisations should be recognised. Organisations differ in terms of size, nature, needs and environment. Therefore, the appraisal system should be tailor-made for the particular organisation. The needs of rates in terms of feedback, mobility, confidence and openness should also be considered.

 9. Post Appraisal Interview : A post-appraisal interview should be arranged so that employees may be supplied with feedback and the organisation may know the difficulties under which employees work, so that their training needs may be discovered. 

10. Review and Appeal : A mechanism for review of ratings should be provided. Which particular technique is to be adopted for appraisal should be governed by such factors as the size, financial resources, philosophy‘ and objectives of an organisation.

Steps in Appraising Performance : Various steps in appraising performance of employees are as follows :
1. Establishing Performance Standard : The process of evaluation begins with the establishment of Performance Standards. While designing a job and formulating a job description, performance standards are usually developed for the position. These standard should be very clear and not vague, and objective enough to be understood and measured. These standard should be

discussed with the supervisors to find out which different factors are to be incorporated. Weights and points to be given to each factor and these then should be indicated on the Appraisal Form, and later on used for appraising the performance of the employees. 

2. Communicating Performance Expectations to Employees : The next important step is to communicate the aforesaid standards to the concerned employees. Their jobs and jobs-related behaviour should be clearly explained to them. It should be noted that job related behaviours are those critical behaviour that constitute job success. The employee should not be presumed to guess what is expected of him. It should be noted that here communication means that the standards have been transmitted to the employee and he has received and understood them a two-way communication, i.e., transference of information from the manager to the subordinate regarding expectations, and feedback from the subordinate to the manager that this information has been received and understood in same context and contents

 3. Measuring Actual Performance : The third step is the measurement of actual performance. To determine what actual performance is, it is necessary to acquire information about it we should be concerned with how we measure and what we measure. Four sources of information are frequently used to measure actual performance : personal observation, statistical reports, oral reports and written reports. 

4. Comparing Actual Performance with Standards : The next step is comparison of actual performance with the standards. By doing so the potentiality for growth and advancement of an employee can be appraised and judged. Efforts are made to find out deviations between standard performance and actual performance.

 5. Discussing the Appraisal with the Employee : After comparing actual performance with standards, the next step is to discuss periodically the appraisal with the employee. Under this discussion good points, weak points, and difficulties are indicated and discussed so that performance is improved. The information that the subordinate receives about his performance assessment has a great impact of his self-esteem and on his subsequent performance. Conveying good news is considerably less difficult for both the manager and the subordinate than when performance has been below expectations.
6. Initiating Corrective Action : The final step is the initiation of corrective action whenever necessary. Immediate corrective action can be of two types. One is immediate and deals predominantly with symptoms. 

The other is basic and delves into 56 causes. Immediate corrective action is often described as putting out fires whereas basic corrective action gets to the source of deviation and seeks to adjust the difference permanently. Coaching and counseling may be done or special assignments and projects may be set. Persons may be deputed for formal training courses, and decision making responsibilities and authority may be delegated to the subordinates. Attempts may also be made to recommend for salary increases or promotions, if these decisions become plausible in the light of appraisals. It should be noted that the above details may vary from organisation to organisation, but these steps usually form the principal steps/features of a sound evaluation programme.