PERFORMANCE APPRAISAL

A performance appraisal, employee appraisal, performance review, or (career) development discussion is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time) typically by the corresponding manager or supervisor performance appraisal is a part of guiding and managing career development. It is the process of obtaining, analyzing, and recording information about the relative worth of an employee to the organization. Performance appraisal is an analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is also the judgment of an employee's performance in a job based on considerations other than productivity alone.

OBJECTIVES OF A PERFORMANCE APPRAISAL

Give employees feedback on performance Identify employee training needs Document criteria used to allocate organizational rewards Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, bonuses, etc.

Provide the opportunity for organizational diagnosis and development Facilitate communication between employee and administration Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.

To improve performance through counseling, coaching and development.

DIFFRANCE FROM POTENTIAL APPRAISAL The potential appraisal refers to the appraisal i.e. identification of the hidden talents and skills of a person. The person might or might not be aware of them. Potential appraisal is a future oriented appraisal whose main objective is to identify and evaluate the potential of the employees to assume higher positions and responsibilities in the organizational hierarchy. Many organisations consider and use potential appraisal as a part of the performance appraisal processes. Potential appraisal can serve the following purposes:

prospects

Techniques of potential appraisal:

Self appraisals

Peer appraisals

Superior appraisals

MBO

Psychological and psychometric tests

Management games like role playing

Leadership exercises etc.

Potential appraisal helps to identify what can happen in future so that it can be guided and directed towards the achievement of individual and organizational growth and goals. Therefore, potential should be included as a part of the Performance appraisal in organisations.

IMPORTANCE OF PERFORMANCE APPRAISAL Performance appraisals provide employees and managers with opportunities to discuss areas in which employees excel and those in which employees need improvement. Performance appraisals should be conducted on a regular basis, and they need not be directly attached to promotion opportunities. Personal Attention During a performance appraisal review, a supervisor and an employee discuss the employee's strengths and weaknesses. This gives the employee individual face time with the supervisor and a chance to address personal concerns. Feedback Employees need to know when their job duties are being fulfilled and when there are issues with their work performance. Managers should schedule this communication on a regular basis. Career Path Performance appraisals allow employees and supervisors to discuss goals that must be met to advance within the company. This can include identifying skills that must be acquired, areas in which one must improve, and educational courses that must be completed. Employee Accountability When employees know there will be regularly scheduled evaluations, they realize that they are accountable for their job performance.

Communicate Divisional and Company Goals Besides communicating employees' individual goals, employee appraisals provide the opportunity for managers to explain organizational goals and the ways in which employees can participate in the achievement of those goals.

PROCESS OF PERFORMANCE APPRAISAL

ESTABLISHING PERFORMANCE STANDARDS The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards.

COMMUNICATING THE STANDARDS Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.

MEASURING THE ACTUAL PERFORMANCE

The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work. COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees performance.

DISCUSSING RESULTS The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better.

DECISION MAKING The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions Traditional Methods of Performance Appraisal ESSAY APPRAISAL METHOD This traditional form of appraisal, also known as "Free Form method" involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator.

2. STRAIGHT RANKING METHOD This is one of the oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation 3. PAIRED COMPARISON A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings.

4. CRITICAL INCIDENTS METHODS In this method of Performance appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It

includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behaviour as and when they occur.

5. FIELD REVIEW In this method, a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors personal bias.

6. CHECKLIST METHOD The rater is given a checklist of the descriptions of the behaviour of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees.

7. GRAPHIC RATING SCALE In this method, an employees quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on the job performance of the employees. For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory FORCED DISTRIBUTION To eliminate the element of bias from the raters ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal

distribution curve. The rater chooses the appropriate fit for the categories on his own discretion.

MODERN METHODS OF PERFORMANCE APPRAISAL

ASSESSMENT CENTRES -

An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics.

The major competencies that are judged in assessment centers are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centres are also an effective way to determine the training and development needs of the targeted employees.

BEHAVIORALLY ANCHORED RATING SCALES Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which combines the graphic rating scale and critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioral statements describing important job performance qualities as good or bad (for eg. the qualities like inter personal relationships, adaptability and reliability, job knowledge etc). These statements are developed from critical incidents. In this method, an employees actual job behavior is judged against the desired

behavior by recording and comparing the behavior with BARS. Developing and practicing BARS requires expert knowledge.

BENEFITS OF PERFORMANCE APPRAISAL If appraisal is to be effective, staff must see the process attempting to meet their needs, otherwise the system will not work. This means Heads of Department do need to form an overview of the issues raised by their staff and if appropriate feed these into the planning process. Appraisal should result in: Benefits for the individual: Gaining a better understanding of their role Understanding more clearly how and where they fit in within the wider picture A better understanding of how performance is assessed and monitored Getting an insight into how their performance is perceived Improving understanding of their strengths and weaknesses and developmental needs Identifying ways in which they can improve performance Providing an opportunity to discuss and clarify developmental and training needs Understanding and agreeing their objectives for the next year. An opportunity to discuss career direction and prospects.

Benefits to the line manager/supervisor/team leader: Opportunities to hear and exchange views and opinions away from the normal pressure of work An opportunity to identify any potential difficulties or weaknesses An improved understanding of the resources available An opportunity to plan for and set objectives for the next period An opportunity to think about and clarify their own role An opportunity to plan for achieving improved performance An opportunity to plan for further delegation and coaching

 An opportunity to motivate members of the team.

Benefits to the organisation: A structured means of identifying and assessing potential Up-to-date information regarding the expectations and aspirations of employees Information on which to base decisions about promotions and motivation An opportunity to review succession planning Information about training needs which can act as a basis for developing training plans Updating of employee records (achievements, new competencies etc) Career counselling Communication of information

Disadvantages of performance appraisal Performance appraisals are usually part of a yearly review process in which a supervisor reviews the job performance, goal completion and projects accomplished by an employee. While the structure of performance appraisals offers a way for giving constructive feedback to employees, which in turn can be used as a reward or a motivational tool, there are downsides to traditional performance appraisals. One Sided Input Traditional performance appraisals involve a supervisor and supervisee, both of which have limited perspectives. As with any situation, limited perspectives lead to

a limited amount of information by which to judge performance.

If a manager is busy supervising several people, as well as tasks and other projects, then there will be limited time to take in the full scope and practice of the performance of the supervisee. As an alternative, many industries today are utilizing 360-degree feedback, which takes into account the relationships that an employee has with peers, customers, clients, supervisors and those whom the supervisee is responsible for overseeing. Forms Only Give Quantitative or Qualitative Data Many times, feedback forms that are utilized in performance appraisals only use quantitative or qualitative measures, but not both. Quantitative appraisals mainly measure numbers, such as how many projects, how many were on time. While this is important, there are other things to take into consideration.

Qualitative benchmarks involve the completion of personal or professional goals and the stories of how the supervisee utilized opportunities to lead by example and proactively implement the values and mission of the organization. Listening to the stories of what has happened over the past year and looking at numbers and outcomes will result in a clearer picture of what the value of the employee is to the organization. Once-a-Year Raises Performance appraisals are usually done once a year and are connected to an increase in salary. This is a disadvantage in that supervisees generally live in fear and experience anxiety when their review time comes up. Having more consistent

interaction when it comes to feedback between management and supervisees can help reduce the fear, anxiety and wondering about a raise. Furthermore, the employee naturally will want to bargain for more money focusing on their strengths and the management will want to emphasize the constructive areas of performance evaluation in order to keep from giving raises, since money is a limited resource in any organization. This adds to the stress of the review

CONCLUSION
The best performance reviews let managers and employees communicate -- share ideas, opinions, and information. Unfortunately, most traditional reviews put managers into the position of uncomfortable judges, ostensibly telling employees how their work either fit the bill -- or didn't. Possibly because of this, most traditional reviews are no better than the manager's off-the-cuff judgments, and some may be illegal. Because of these problems, new types of reviews are coming into play. Most require that evaluations be done not for raises, promotions, or bonuses, but for growth, development, and communication. The most important aspect in every case is communication between the employee and other people, instead of one-way communication, for higher performance.

INDEX
1. Performance Appraisal 2. Objectives Of A Performance Appraisal
3. Difference From Potential Appraisal 4. Importance Of Performance Appraisal

5. Process Of Performance Appraisal 6. Measuring The Actual Performance 7. Modern Methods Of Performance Appraisal
8. Benefits Of Performance Appraisal

9. Conclusion