Performance Appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time. It is a formal assessment of how well an employee is doing his or her job. A performance appraisal is based on an employee’s performance of assigned duties and responsibilities, not on the employee’s personality characteristics. The appraisal measures skills and accomplishments with reasonable accuracy and uniformity. It provides a way to help identify areas for performance enhancement and to help promote professional growth.
Employees’ performance should be evaluated regularly for many reasons. One reason is that Performance Appraisal may be necessary for validating selection devices or assessing the impact of training programs. A second reason is administrative to aid in making decisions about pay raises, promotions and training. Still the third reason is to provide feedback to employees to help them improve their present performance and plan future careers.
Performance appraisals may be conducted whenever the HR manager feel it necessary. However systematic performance appraisals (PAs) are conducted at least annually and that annual employee performance reviews appear to be the standard in most organizations.
The appraiser may be any person who has the skill to appraise and knowledge about the job contents to be appraised. He should be capable of determining what is important and what is relatively less important.He should prepare reports and make judgement without bias. Typical appraisers are: supervisors, peers, consultants and employee themselves etc.
Steps of Performance Appraisal Process
1. Establishment of performance standard in accordance with the goals set, job analysis and description.
2. Mutually set measurable goals and communicate them to employees.
3. Measurement of actual performance by personal observation, statistical reports,oral reports and written reports.
4. Comparison of actual performance with standards
5. Discuss of appraisal with employee
6. Identification of corrective action where necessary.
There are several appraisal methods are available for judging the performance of the employees but the HR Manager has to make the choice of method best suited to work culture of the organization and fulfill its need. The widely used methods are as below:
1)360 Degree Feedback : Most ideal and comprehensive appraisal method where the feedback about the employees’ performance comes from all his peers, managers/ superior, subordinates, team members, customers, vendors, anyone who comes into contact with the employee and can provide valuable feedback regarding the “on-the-job” performance of the employee.
2) Management by Objectives (MBO) : In this method employees and the superiors come together to identify common goals, the employees set their goals to be achieved the standards to be taken as the criteria for measurement of their performance and choose their course of action. Management makes assessment by comparing employee’s actual performance with the standards set.
3) Performance Ranking : In this method managers will make comparisons of an employee with the others, instead of making comparison of each employee with some certain standards.
4) Forced Distribution : In Forced Distribution method employees are ranked in terms of forced allocations. For instance, the HR Manager is asked to share the proportions in the way that 10 or 20 % will be the highest levels of performances, while 70 or 80% will be in the middle level and the rest will be in the lowest one.
5) Graphic Rating Scale : The oldest form of appraisal where management just simply does checks on the performance levels of their staff.
6) Behavioral Checklist : A behavioral checklist is a rating form containing statements describing both effective and ineffective job behaviors. These behaviors relate to a number of behavioral dimensions determined to be relevant to the job.
7) Behavioral Anchored Rating Scales (BARS): A sophisticated and useful method where an employee’s rating scale points are defined by sets of indicators or scales that represent a continuum of descriptive statements of behaviors ranging from least to most effective. An evaluator must indicate which behavior on each scale best describes an employee’s performance
8) Essay Evaluation method : It is a a non-quantitative technique where an evaluator writes report appraising an employee’s performance, usually in terms of job behaviors and/or results.