Performance appraisal is the method of evaluating the behavior of employees in the workplace, evaluating the quantitative and qualitative aspects of job performance in terms of output.
According to Dale Yoder, "Performance appraisal includes all formal procedures used to evaluate contributions of group members in a working organization. It is a continuous process to ensure information necessary for making correct and objective decisions on employees."
Objectives of Permonace Appraisal:
Compensation Decisions: it can serve as a basis for pay raises. performance appraisal helps managers to identify employees who are performing at or above expected levels to compensate for merit.
Promotion decisions: Individuals performing at the best are rewarded with promotion.
Training and Development Programmes: Performance appraisal can help employees to self-access their skills, any training required to improve skills for better performance.
Transfers: Unsatisfactory performance calls for transfers, demotions and discharge due to the economic conditions of the organization. It is greatly influenced by appraisals.
Feedback: Performance appraisal enables the employee and the employer to know how well the individual is performing.
Self-improvement: Through discussions with individual employees, a line manager can find out why they perform at lower levels, which steps can be initiated to improve their performance. The discussion between senior and subordinate gives chance to the employees for introspection and to enhance his output to the organization.
Parties Conducting Appraisal:
The appraiser or evaluator can be a person who has complete knowledge about job content, parameters to be judged, standards of the job contents and also a person who observes the employee while performing a job. he should prepare reports and make judgments without any bias. these appraisers can be
Supervisor: boss, departmental head, line managers, etc who are senior in position to the employee being appraised. generally, the immediate senior si the appraiser.
Peers: Peer appraisers may be reliable if the workgroup is stable over a long period of time, peers are mature enough to appraise without personal prejudices.
Subordinates: Such kind of appraisal is done in educational institutes where 6teachers are evaluated by students. now this concept is introduced in MNCs also provides the relationships between superiors and subordinates are cordial.
Self-appraisal: If the individuals understand their job expectations, their responsibilities and the parameters on which they are to be evaluated, they are in the best position to appraise their performance. Such employees are highly motivated.
Users of services: In the case of service industries, employees are evaluated by customers relating to behavior, promptness in handling customer queries, speed of delivery service and the accuracy of performance.
Consultants: When the organization does not trust its employees for supervisor appraisal, peer appraisal or even self-appraisal, such cases, organizations hire external consulting agencies. Consultants are trained and they observe the employees at work for sufficiently long periods for the purpose of the appraisal.
Methods of Performance Appraisal:
Individual Evaluation Technique:
These are the traditional methods of appraisal
Confidence Report: It is created by the immediate superior at the end of the year in subjective form.
Essay Evaluation: rater is asked to express strong as well as weak points of the employee's behavior, his general planning, organizing abilities, attitudes towards the job. It is an unstructured appraisal.
Critical Incident Technique: The manager prepares a list of descriptive statements about the employee's behavior on the job. A rating score from the weighted checklist helps the manager in evaluating the performance to be good or bad or moderate.
Checklists: It represents the simplest form of a list of descriptive statements about the employee's behavior on the job. A rating score from the weighted checklist helps the manager in evaluating the performance to b good or bad or moderate.
Graphic Rating Scale: Under this method, scales are established in form of very good, good, average, poor and very poor. Then a number of specific jobs related factors are ranked on these scales. Factors to be rated are personal characteristics like initiative, leadership etc and contributions such as quantity and quality of work.
Forced Choice Method: This technique requires the rater to select the most descriptive statement in each pair of statements about the employee being evaluated.
Behaviorally Anchored Rating Scale (BARS): It5 is also known as the behavioral expectations sale. It is a combination of the rating scale and critical incident techniques. The critical incidents serve as anchor statements on a scale and the rating form usually contains six to eight defined performance dimensions. evaluator rate each statement on a 1 to 7 or 1 to 9. A rating of 1 presents ineffective performance, the stop scale value reflects effective performance. Means and standard deviations are calculated on these scale values assigned to each incident.
Multiperson Evaluation Technqiue:
In these types of techniques, one employee is evaluated in comparison to another. these are also the modern methods of appraisal
Ranking Method: The ranking of each employee in a workgroup is done against that of other employees. Employees are ranked according to their performance in a group. Under this method, the evaluator is asked to rate employees from highest to lowest on some overall criteria.
Paired Comparisons: In this method, each worker is compared with all other employees in the group for each and every trait. If there are 'n' employees, then 'n(n-2) comparisons are made.
Management By Objective (MBO): It is also termed a goal-setting approach. The essential feature of the method is the mutual establishment of job goals. Superior discuss Key Result Areas (KRAs) with the subordinates, checkpoints are established for the evaluation, superior and subordinate are established for the evaluation, superior and subordinates meet the target mutually at6 say half-yearly or yearly.
Field Review Method: A trained, skilled representative of the HR department goes into the field and assists line supervisors with the ratings of their respective subordinates. HR specialist requests the supervisor to provide information about employees' performance. Based on this information, an HR expert prepares a report which is sent to the supervisor for review, changes, approval and discussion with the employee who is being rated on standardized objective forms.
Forced Distribution Method: The rater is asked to rate the employee on a predetermined distribution scale between two extremes 'goog' or 'bad'. The two criteria used for rating are job performance and profitability. There is no desriptive statements. this method assumes that all top grade workers should go to the highest 10% grade, 20% employees should go to the next highest grade and so on.
Promotioanl scale consists of three points likely promotional, may be/may not be promotional and quite unlikely promotional material.
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