Sunday 2 December 2018

What is performance appraisal?

Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improving the actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does.

Performance appraisal is a process of evaluating an employee’s performance of a job in terms of its requirements. It is the process of evaluating the performance of employees, sharing that information with them and searching for ways to improve their performance, coaching for improved performance and distribution of economic rewards. This lecture briefly explains performance appraisal in terms of HRM perspective.

Basic purpose of performance appraisal

Effective performance appraisal systems contain two basic systems operating in conjunction: an evaluation system and a feedback system.

The main aim of the evaluation system is to identify the performance gap (if any). This gap is the shortfall that occurs when performance does not meet the standard set by the organization as acceptable.

The main aim of the feedback system is to inform the employee about the quality of his or her performance. (However, the information flow is not exclusively one way. The appraisers also receive feedback from the employee about job problems, etc.)

One of the best ways to appreciate the purposes of performance appraisal is to look at it from the different viewpoints of the main stakeholders: the employee and the organization.

A prominent personality in the field of Human resources, “performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job.” Performance appraisal is a systematic way of reviewing and assessing the performance of an employee during a given period of time and planning for his future.


Performance Appraisal can be done with following objectives in mind:

  1. Maintain records in order to determine compensation packages, wage structure, salaries raises, etc.

  2. Identify the strengths and weaknesses of employees to place right men on right job.

  3. To maintain and assess the potential present in a person for further growth and development.

  4. Provide a feedback to employees regarding their performance and related status.

  5. To provide a feedback to employees regarding their performance and related status.

  6. It serves as a basis for influencing working habits of the employees.

  7. To review and retain the promotional and other training programmers.

It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals.

Performance Appraisal Process

Performance appraisal is a process through which performance deficiencies and actions to ratify such deficiencies. It is a continuous process of the following phases:

  1. Establishment of Performance Standards

It is concerned with the establishment of predetermined performance standards that will help in comparing the actual performance of the employees. It can be done through the formulation of human resource planning and job analysis.

  1. Communication of Standards to Employees

Under this step, the set performance standard is communicate to the concern employees. The employees are assign with require duties, responsibilities and authorities to do the tasks effectively and efficiently so that the expect standard will be met. Moreover, it provides information relating to what is to be done and how well the task is perform. The communication should be two-way process so that the implementation can be effective

  1. Measure Actual Performance

The actual performance of an individual is measure in terms of its efficiency and effectiveness. The performance is measure on the basis of predefined standards. The information related to actual performance is collect through the application of different qualitative and quantitative techniques; and the relevant criteria for comparison will be determine on the basis of such information.

  1. Comparison of Actual Performance with Standards

This step is concern with the comparison of actual performance with predetermine standards. It is determine in terms of whether present standard is maintain. The information provide by the report on actual performance is compare with standards in order to identify performance deviations.

  1. Discuss Appraisal with The Employee

This step of performance appraisal process finds out the deviation occur in actual performance. It also identifies the extent of differences and the causes of such differences. Then the findings of performance appraisal are to discuss with the concern employees to locate the measure/solution.

  1. Corrective Action

If performance differs with the predetermine standards, then a corrective action is initiate in order to improve employee's performance in future. Corrections are remedial measures which are taken to bridge the gap between predetermine and actual performance. The corrective actions can be Do Nothing, Correct Deviations, Change Standards.


It is said that performance appraisal is an investment for the company which can be justify by following advantages:

  1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmers for efficient employees. In this regards, inefficient workers can be dismiss or demote in case.

  2. Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance. Compensation packages which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority.

  3. Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programs. It helps to analyses strengths and weaknesses of employees so that new jobs can be design for efficient employees. It also helps in framing future development programs.

  4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard.

  5. Communication: For an organization, effective communication between employees and employers is very important. Through performance appraisal, communication can be sought for in the following ways:

    1. Through performance appraisal, the employers can understand and accept skills of subordinates.

    2. The subordinates can also understand and create a trust and confidence in superiors.

    3. It also helps in maintaining cordial and congenial labor management relationship.

    4. It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

  1. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determine if the targets are achieve. This very well motivates a person for better job and helps him to improve his performance in the future.

Why are appraisals important?

Companies have become aware that the success of any organization is dependent upon its employees. Following on from this is the need to recognize who these hard working employees are and to reward them.

For most participant’s star fare Images Performance Appraisal System will be different to the appraisals you have previously undertaken. However, the basis of any system is to reward staff that provide a quality service in the workplace.

Benefits of performance appraisal

Performance appraisals are about employee performance and accountability. In a globally competitive

world, companies need high performance. At the same time, employees need feedback on their performance as a guide to future behavior. Appraising employee performance is useful for development and administrative purposes. Performance appraisals have many uses, such as:

  • Motivating and allocating rewards to employees such as promotion and salary increases.

  • Coaching and developing employees.

  • Identifying areas where development efforts are need.

  • Performance appraisal is a major tool to identify employee skill and knowledge deficiencies.

  • Giving employee feedback about their work.

  • Maintaining fair relationships within groups.

  • Formal PA plans are design to meet three needs, one of the organization and the other two of the individual, namely:

  • Providing systematic judgment to back up salary increases, transfer, demotions or terminations.

  • Telling a subordinate how he is doing and suggestions need to change in his behavior, attitudes and skills of job knowledge.

  • Using as a base for coaching and counseling the individual by the superior.

Why use performance appraisals?

  • Some of the reasons why you might like to perform a performance appraisal:

  • To give employees feedback on their performance;

  • Identify employee training needs;

  • Obtain information which can be use to assist in the allocation of organizational rewards, eg. pay increases or bonuses;

  • To obtain information which can be use for organizational diagnosis and development.

No comments:

Post a Comment