What is Performance Appraisal?
What is performance appraisal? The method which evaluates the behavior of employees in the workplace is called performance appraisal.
In performance appraisal, we can easily see the influence of both quantitative and qualitative aspects of job performance.
It’s a process of regular evaluation of employees‘ overall contribution to the company. In other words, we can say that performance appraisal is a method of the annual review, an annual recheck of employees’ performance, efficiency, productivity, dedication, and determination.
When talking about employee pay hikes, bonus issue performance appraisal shows a big-scale picture of employees through regular performance checks.
An effective performance appraisal is an opportunity for the organization to learn from those who perform well and be remembered for what is provided and not done by other organizations. Through this process, organizations understand employees in a better way.
We can also conclude that performance appraisal is a score-based game to find out targeted persons or groups for the organization, which are top efficient options for the future.
In general, the appraisal report can be done every year, semi-annually, or even quarterly. Through this report, companies can understand which employees contributed the best as most of the companies have a limited budget to provide pay hikes and bonuses.
Features of Performance Appraisal
A. Performance appraisal is a futuristic process. It focuses on an employee’s current performance and the past 1 year or a specific time frame of performance to reward in the future like pay hikes, bonuses, and extra benefits. It is the process of setting employees in a specific working order so that they can deliver the most possible result for the company with the right intention and think for future growth.
B. Performance appraisal is not a one-time deal; it is a periodic process to act with a specific plan. It takes time to come out with results and each employee should have to go through it.
C. Performance appraisal is a systematic process where assigning the right assignment to the right candidate is a specific task. Setting work standards for employees by identifying their capability is another task of performance appraisal.
D. Performance appraisal strongly focuses on employee development. Because employees are the key threads of an organization. Managers have a greater task to develop employees for the futuristic perspective of the organization along with the need to perform as a coach rather than a judge. The appraisal process can be used to identify potential problems, increase performance and eliminate issues.
E. Identifying an employee’s potential is another major feature of performance appraisal. Some of the employees have special talent and productivity. Identifying that talent and utilizing it for organizational growth is a vital task for a team manager.
Objectives of Performance Appraisal
1 – Availing Promotion Decisions: In an organization, every employee wants to get ahead and get a great set of performance appraisals. But the main point is how the organization should not know who is doing better and who needs more moral, psychological, al and ethical support to get ahead. So performance appraisal and promotion decisions make it easier to find our desirable employees and also who need a push-up for the future.
2 – Setting and Evaluating Goals: Goal setting is always described as a process to encourage superior performance. So performance appraisal is used to make sure the setting of goals for employees in an organization for better goal achievement.
3 – Feedback: Feedback is the backbone of performance appraisal. Feedback demonstrates the employee’s contribution, culture, and activity towards the organization in the last 12 months for evaluation of the future. Feedback also provides the right information about employee mindset towards the organization.
4 – Counseling Weak Performers: Every employee is not capable to run as per the organization’s set standards. Team leaders or managers must overlook weak or poor performers and need to counsel them on organizational requirements and prepare them for future perspectives.
5 – Focusing on Mentoring: Not only managers are only for handling, and managing the team or project. Also, they need to play a vital role as a mentor to guide employees properly to achieve organizational goals. For this, managers have to become friendly and need to act as a coach.
6 – Determining Pay Changes: Each year, the organizations hike compensation for employees. But the main point is how to determine that how much to increase for whom. Again there is a requirement for performance appraisal to determine pay decisions. You can take it as performance appraisal act as a measure to make sure that those who perform better than others must receive more pay than others.
7 – Plays a vital role in Individual Development Needs: There must be poor performers in an organization as we studied above. It is the organization’s responsibility to determine their issues and discuss with individual employees their development needs. Because if you guide the weak individuals in organization requirements and train them in a proper process, they will also be happy to learn more and contribute to the organization’s growth. With the growth of the organization, they can get larger benefits from performance appraisal. So it’s one of the biggest objectives of performance appraisal.
8 – Plays a vital role in Organization Development Needs: Like employees, organizations also need to provide to their management, manager, and the entire team for betterment and growth.
9 – Improves Organizational Overall Performance: This is the most vital reason to perform a performance appraisal mechanism in an organization. Performance appraisals have a lot of benefits for employees and if employees get the benefits then they contribute to the organization in a happier way and all these together lead to the improvement of organizational performance.
Factors Affecting Performance Appraisal
1 – An organizational system is a subset of an organization. The other subsystems operating are affected by the failure of a subsystem. The performance appraisal should start at the apex because of this interdependence of subsystems. The cause and effect tracking will be more systematic and logical.
2 – Top leadership is a very important factor in the effective performance of an organization. The loyalty and commitment of leadership for employees can perform a better organizational environment.
3- Evaluation of results is another factor affecting performance appraisal. If there are requirements of training and development for a specific area, then it is the prime responsibility of top leadership to provide it to the employees for organizational growth.
4 – Providing better services to the customer is another important factor. When employees are dealing with customers, they must work with this intent to fulfill customers’ requirements at the best level. Because this will directly affect the growth of the organization. If the customers are happy, then the organization can see higher revenue growth.
5- Teamwork is the most important factor for organizational growth. All employees need to work in a team or groups to achieve the goals of the organization and get a good appraisal in the end. If someone is spreading negativity or not working positively with the team, then must face its impact at the time of appraisal.
6 – Motivation is very required for new employees from their dedicated manager about organization culture, products, and future needs. If the new employees get motivated then they can contribute to the organization more efficiently and this will lead to their individual growth in the organization.
7 – Continuous engagement with employees is a more effective way to get the best outcome of performance appraisal. Managers and top management know that there is a specific time-based appraisal system available for organizations yearly, half-yearly or quarterly.
But it’s a long process if we look at each day for the organization. It decreases the communication between managers and top management about appraisal as they have time. Continuous engagement can help here to better know about each individual. For this organization, it needs to establish a central automatic review system. Where employees’ efficiency gets evaluated each day or in small-time frames. These are the important factors affecting performance appraisal.
We hope we have delivered a better definition and presentation of what is performance appraisal and its factors, objectives, etc.
Q1. What are the factors of performance appraisal?
1. Product Knowledge
2. Team Motivation
3. Better Services Provide to Customer
4. Top Leadership
5. Organization Structure
Q2. What are various types of performance appraisal?
1. 360 Feedback Performance Appraisals
2. Essay Appraisal
3. Stack Ranking Appraisals
4. Competency Appraisals
5. Checklists Appraisals
Q3. Various features of better performance appraisal
1. Plan according to organization requirements
2. Integrate with new technologies
3. Set different parameters of review
4. Continuous engagement with employees
Q4. What are the important uses of performance appraisal?
1. Improvement of performance
2. Helps in career planning and development
3. Helps in organizational growth
4. Creates a positive environment
5. Creates employment opportunities
6. Training and development needs
Q5. What are the various traditional methods of performance appraisal?
1. Group appraisal
2. Critical incident method
3. Graphic rating scales
4. Straight ranking method
Q6. Various problems of performance appraisal
1. Central tendency
2. Recency effect
3. Bad organizational policies and practices
4. Horn effect
5. Poor review by the organization
Q7. What are the essentials of a good appraisal system?
1. Clear objectives
2. Practical availability
3. Post-appraisal review
4. Employees access to results