ESSENTIAL OF GOOD PERFORMANCE APPRAISAL
SYSTEM
BY
BY
SMART LEARNING WAY
Contents
·
Introduction of
performance appraisal system
·
Meaning of
performance appraisal system
·
Definition of
performance appraisal system
·
Essential of good
performance appraisal system
·
Uses of
performance appraisal system
·
Objectives of
performance appraisal system
·
Problems in
performance Appraisal
(Limitations of performance Appraisal)
·
Conclusion
Introduction
Appraisal of performance is widely used in society. Parents evaluate
their children, teachers evaluate their students and employers evaluate their
employees. However, formal evaluation of employees is believed to have been
adopted for the first time during the first world war. At the instance of
Walter Dill Scott, the U.S. Army adopted the ‘Man to Man’ rating system for
evaluating military personnel. During 1920-1930 hourly – paid workers in
industrial units were evaluated on the basis of rating scores. This early
Appraisal system was called merit rating. In the early fifties,
performance appraisal techniques began to be used for technical, professional
and managerial personnel. Since then tremendous changes have taken place in the
concept, techniques and philosophy of employee appraisal.
Meaning
Performance means degree of accomplishment of the tasks involved in a
job. It depends upon ability and
efforts. Performance evaluation or
performance appraisal is the process of assessing the performance and progress
of an employee or of a group of employees on a given job and his potential for
future development. It consists of all formal procedures used in working
organizations to evaluate personalities, contributions and potentials of
employees.
It is the process of obtaining, analyzing and recording information
about the relative worth of an employee. 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 caliber of
an employee so as to decide salary increment. It is designed primarily to cover
rank and file personnel. On the other hand, performance appraisal focuses on
the performance and future potential of
the employee. Its aim is not simply to decide salary
Increments but to develop a rational basis for personnel decisions.
Merit-rating measures what the person is (traits) whereas performance appraisal
measures what the person does (performance).
Definition
A formal definition of performance appraisal is:
It is the systematic evaluation of the individual with respect to his or
her performance on the job and his or
her potential for development.
A more comprehensive definition is :
performance appraisal is a formal structured system of measuring and evaluating
an employee’s job related behaviors and outcomes to discover how and why the
employee can perform more effectively in the future so that the employee,
organization, and society all benefit.
The second definition includes employee’s behaviors
as part of the assessment. Behavior can be active or passive do
something or do nothing.
According to Heyel, “ It is the process of
evaluating the performance and qualifications of the employees in terms of the
requirement of the job for which he is employed for purpose of financial
rewards and other action which require
differential treatment among the members of a group as distinguished from
actions affecting all members equally.”
According to Wendell French performance
appraisal is, “ The formal, systematic
assessment of how well employees are performing their jobs on relation to
established standard, and the communication
of that assessment to employees.”
Performance appraisal is the personnel activity
by mean of which the enterprise determines the extent to which the employee is
performing the job effectively.”
- W. F. gluek
Performance appraisal is a process of
evaluating the performance of an
employee on the job in terms of fulfilling its requirements.”
- W. D. Scott, -R.C. Clothier, - W.R. Spriegel
Performance appraisal is a process of
estimating or judging the value, excellence qualities or status of some object,
person or thing.”
Essential of good performance appraisal
system
To effective, a performance appraisal system should the following
requirements:
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.
Performance appraisal is an emotional process
involving feelings of fairness and equal treatment. The human element in it
must be considered if is to serve the individual and organizational purposes.
Clear objectives :-
The objectives and uses of performance
appraisal should be made clear and specific. The objectives should be relevant,
timely and open. The appraisal system should be fair so that it is beneficial
to both the individual employee and the organization. The system should be
adequately and appropriately linked with other subsystems of human resource
management.
Standardization :-
Well – defined performance factors and criteria should be developed.
These factors as well as appraisal form, procedures and techniques should be
standardized. 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. Employees should be
made fully aware of performance standards and should be involved in setting the
standards.
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.
Job Relatedness :-
The evaluators should focus
attention on job-related behaviour and performance of employees. Multiple
criteria should be used for appraisal and appraisal should be done periodically
rather than once a year.
Documentation :-
The raters should be required
to justify their ratings. Documentation will encourage evaluators to make conclusions
efforts minimizing personal biases. It will also help to impart accountability
for ratings.
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 judgemental. The feedback
message must contain comments with examples and suggestions for improvement.
Individual differences :-
While designing the appraisal system, individual differences in
organisations should be recognized. 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 ratees in terms of feedback,
mobility, confidence and openness should also be considered.
Post appraisal Interview :-
After appraisal, an interview with the employee should be arranged. It
is necessary to supply feedback, to know the difficulties under which the employees
work and to identify their training needs. The rater should adopt a problem –
solving approach in the interview and should provide counseling for improving
performance.
Review and appeal :
A mechanism for review of ratings should be
provided. The review may be made by a committee consisting of line executives
and personnel experts. The committee will see whether the raters are unusually
strict or lenient. It may compare ratings with operating results and may
require the raters to give specific examples or tangible proof. Differences
if any
are discussed and
dissent is recorded.
Provision must be made for an appeal in case the employee/ratee is not
satisfied with the ratings.
Uses of performance appraisal system
·
Human resource
planning
·
Recruitment and
selection
·
Training and
development
·
Career planning
and development
·
Compensation
programs
·
Internal employee
relations
·
Assessment of
employee potential
Objectives of performance appraisal system
A performance appraisal furnishes information
for a variety of organizational and individual purpose. Objectives of
performance appraisal which are thus:
(1)To assist managers in overseeing
subordinates closely and instruct them
appropriately and effectively.
(2) To help in motivating employees by providing
performance feedback .
(3) To achieve better results and improve the
performance at work.
(4)To identify developmental needs that are
employed while selecting training and development programmes.
(5)To achieve success by focusing on the
objectives effectively and efficiently.
(6)To facilitate research in human
resource management.
(7)To provide feedback to employees so that
they come to know where they stand and
can improve their job performance.
Problems
in performance Appraisal
(Limitations of Performance Appraisal)
(Limitations of Performance Appraisal)
The main problems involved in performance
appraisal are as follows :
1. Errors in Rating
Performance appraisal may not be
valid indicator of performance and potential of employees due to the following
types o errors:
2. Halo effect :
It is the tendency to rate an employee
consistently high or low on the basis of overall impression. One trait of the
employee influences the rater’s appraisal on all other traits.
For example, an employee ay be rated high on performance just because he
sits on the job late in the evening. Similarly, a person who does not shave
regularly may be rating all the employees on one trait before taking up another
trait.
3. Stereotyping :
this implies forming a mental picture of a person
on the basis of his age, sex, caste or religion. It results in an
over-simplified view and blurs the assessment of job performance.
4. Central Tendency :
it means assigning average ratings to all the
employees in order to avoid commitment or involvement. This is adopted because
the rater has not to justify or clarify the average ratings. As a results, the
ratings are clustered around the midpoint.
5. Constant error :
some evaluators tend to be lenient while
others are strict in assessing performance. In the first case, performance is
overrated (leniency error) while in the second type it is underrated
(strictness error). This tendency may be avoided by holding meetings so that
the raters understand what is required of them.
6. Personal Bias :
Performance appraisal may become invalid
because the rater dislikes an employee. Such bias or prejudice may arise on the
basis of regional or religious beliefs and habits or interpersonal conflicts.
Bias may also be the result of time. Recent experience or first impression of
the rater may affect the evaluation.
7. Spill over effect :
This arises when past performance affects
assessment of present performance. For instance, recent behaviour or
performance of an employee may be used to judge him. This is called recency.
8. Lack of Reliability
Reliability implies stability
and consistency in the measurement. Lack of consistency over time and among
different raters may reduce the reliability of performance appraisal.
Inconsistent use of measuring standards and lack of training in appraisal
techniques may also reduce reliability. Different qualities may not be given
proper weight age. Factors like initiative are highly subjective and cannot be
quantified.
9. Incompetence
Raters may fail to evaluate
performance accurately due to lack of knowledge and experience. Post appraisal
interview is often handled ineffectively.
10. Negative Approach
Performance appraisal loses most of its value when the focus of
management is on punishment rather than on development of employees.
11. Multiple objectives
Raters may get confused due to two many objectives or unclear objectives
of performance appraisal.
12. Resistance
Trade unions may resist performance appraisal on the ground that it
involves discrimination among its members. Negative ratings may affect
interpersonal relations and industrial relations particularly when
employees/unions do not have faith in the
system of performance appraisal.
13. Lack of knowledge
The staff appraising performance of employees might not be trained and
experienced enough to make correct appraisal.
Conclusion
Performance appraisal is the process of
assessing systematically the performance of a person on the present job and his
potential for higher level jobs in future. It serves several purposes.
Performance appraisal provides an objective
basis for taking personnel decisions.
Confidential report, free form, straight ranking,
paired comparisons, forced distribution, graphic rating scales, checklist,
critical incidents, group appraisal and field review are the traditional
techniques of performance appraisal.
Managers can be appraised both on goal
attainment and as managers.
Appraisal interview helps to serve manifold
objectives. It can be tell and sell, tell and listen, and problem – solving
interview.
The 360- degree appraisal involves appraisal
of an employee by self, superior, subordinates and peers.
Bibliography
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Sultan chand company ltd.( new
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Management & Personnel Management
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Aswathappa
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Human Resource Management
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