Human resource management

Performance Appraisal
 Concept
The performance appraisal is the process of assessing  employee performance  by way of comparing present performance with already
established standards which have been already communicated to employees, subsequently providing feedback to employees about their
performance level for the purpose of improving their performance as needed by the organisation.

As said above the very purpose of performance uprising is to know performance of employee, subsequently to decide whether training is
needed to particular employee or to give promotion with additional pay hike. performance appraisal is the tool for determining whether
employee is to be promoted, demoted or sacked ( remove ) in case of very poor performance and no scope for improvement.

Every corporate sector uses performance appraisal as a tool for knowing about the employee and take decisions about particular employee.
for the purpose of performance appraisal of employees there are different methods under the category of traditional methods and modern
methods which are discussed in following chapters.

What is Performance?
What does the term performance actually mean? Employees are performing well when they are productive. Productivity implies both concern for
effectiveness and efficiency, effectiveness refers to goal accomplishment. However it does not speak of the costs incurred in reaching the goal. That is
where efficiency comes in. Efficiency evaluates the ratio of inputs consumed to outputs achieved. The greater the output for a given input, the greater the
efficiency. It is not desirable to have objective measures of productivity such as hard data on effectiveness, number of units produced, or percent of
crimes solved etc and hard data on efficiency (average cost per unit or ratio of sales volume to number of calls made etc.). 

In addition to productivity as measured in terms of effectiveness and efficiency, performance also includes personnel data such as measures of
accidents, turnover, absences, and tardiness. That is a good employee is one who not only performs well in terms of productivity but also minimizes
problems for the organisation by being to work on time, by not missing days, and by minimizing the number of work-related accidents.

What is Appraisal? 
Appraisals are judgments of the characteristics, traits and performance of others. On the basis of these judgments we assess the worth or value of
others and identify what is good or bad. In industry performance appraisal is a systematic evaluation of employees by supervisors. Employees also wish
to know their position in the organization. Appraisals are essential for making many administrative decisions: selection, training,promotion, transfer,
wage and salary administration etc. Besides they aid in personnel research.

Performance Appraisal thus is a systematic and objective way of judging the relative worth of ability of an employee in performing his task. Performance
appraisal helps to identify those who are performing their assigned tasks well and those who are not and the reasons for such performance.
Nature/Characteristics
• Objectives should be clear: The objectives of appraisal should be clear and specific. An
effective performance system will always have specific appraisal attributes to match the
employee’s job description. 

• Data should be valid and reliable: An effective performance appraisal system provides
data that is consistent, reliable and valid. It supplies data according the objective that serves
the purpose of performance appraisal and succession planning.

• Performance criteria should be well defined: Effective performance appraisal has

• Economical and less time consuming: Effective performance appraisal systems are
designed to be economical and less time consuming to bring maximum benefits.

• Should initiate follow up: A post appraisal talk should be arranged for employees to get
feedback from their managers. It also helps the organization to learn about the problems and
difficulties the employees might be facing and discover suitable training.
Objectives
The main objective of performance appraisals is to measure and improve the performance of employees and increase
their future potential and value to the company. Other objectives include providing feedback, improving communication,
understanding training needs, clarifying roles and responsibilities and determining how to allocate rewards.

• Providing Feedback. 
• Facilitating Promotion Decisions. 
• Rightsizing or Downsizing Decisions. 
• Encouraging Performance Improvement. 
• Motivating Superior Performance. 
• Setting and Measuring Goals. 
• Counseling Poor Performers.
• Determining Compensation Changes. 
• Encouraging Coaching and Mentoring.
• Supporting Manpower Planning.
• Determining Individual Training and Development Needs.
• Determining Organizational Training and Development Needs.
• Validating Hiring Decisions. 
• Providing Legal Defensibility for Personnel Decisions.
• Improving Overall Organizational Performance. 
• Training Needed 
 Uses
about greater agility and responsiveness in human resources of an organization. Performance appraisal is the foundation of much human

k allows the employee, manager and personnel specialists to intervene with appropriate actions to improve performance.

ons help decision-makers determine who should receive pay raises. Many firms grant part or all pay increases and bonuses based upon merit, which is determined mostly through per

motions are usually based on past or anticipated performance. Often promotions are a reward for past performance.

ance may indicate the need for retraining. Likewise, good performance may indicate untapped potential that should be developed.

e feedback guides career decisions about specific career paths one should investigate.

ormance implies strengths or weakness in the personnel department’s staffing procedures.

may indicate errors in job analysis information, human resource plans, or other parts of the personnel management information system. Reliance on inaccurate information may have l

om of ill-conceived job designs. Appraisals help diagnose these errors.

rmance appraisals that actually measure job related performance ensure that internal placement decisions are not discriminatory.

luenced by factors outside the work environment such as family, financial, health or other personal matters. If uncovered through appraisals, the human resource department may be a

mance throughout the organization indicates how well the human resource function is performing.
 Process
• Establishing performance
standards.

• Communicating standards and

• Measuring the actual

• Comparing with standards.

• Discussing results(feedback)

• Decision making-taking
corrective actions.
 Problems of good performance
appraisal system
• Errors in rating

• Halo effect

• Stereotyping

• Central tendency

• Constant error

• Personal bias

• Spill over effect

• Lack of reliability

• Incompetence

• Negative approach

• Multiple objectives

• Resistance

• Lack of knowledge
•
Essential of good performance appraisal system
Mutual Trust :-

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 :-

• 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.
THANK YOU.

ACKNOWLEDGEMENT
Special thanks to Baldev sir.

Siddhartha Priyadarshi
Gursimran Arora