178Personnel Management Concepts
Performance appraisal is not job evaluation. Performance appraisal refers to howwell someone is doing an assigned job. Job evaluation, on the other hand, determineshow much a job is worth to the organisation and therefore, what range of payshould be assigned to the job.
Performance appraisal is not limited to ‘calling the fouls’. Its focus is on employeedevelopment. It forces managers to become coaches rather then judges. Theappraisal process provides an opportunity to identify issues for discussion, eliminateany potential problems, and set new goals for achieving high performance.
Performance appraisal may be formal or informal. The informal evaluation is morelikely to be subjective and influenced by personal factors. Some employees areliked better than others and have, for that reason only, better chances of receivingvarious kinds of rewards than others. The formal system is likely to be more fairand objective, since it is carried out in a systematic manner, using printed appraisalforms.
11.4PERFORMANCE MEASUREMENT PURPOSE
Performance appraisal could be taken either for evaluating the performance of employeesor for developing them. The evaluation is of two types: telling the employee where hestands and using the data for personnel decisions concerning pay, promotions, etc. Thedevelopmental objectives focus on finding individual and organisational strengths andweaknesses; developing healthy superior-subordinate relations; and offering appropriatecounselling/coaching to the employee with a view to develop his potential in future.Appraisal of employees serves several useful purposes:a.
It can serve as a basis for pay raises. Managers needperformance appraisal to identify employees who are performing at or aboveexpected levels. This approach to compensation is at the heart of the idea thatraises should be given for merit rather than for seniority. Under merit systems,employee receives raises based on performance.b.
It can serve as a useful basis for job change or promotion.When merit is the basis for reward, the person doing the best job receives thepromotion. If relevant work aspects are measured properly, it helps in minimisingfeelings of frustration of those who are not promoted.c.
Training and development programmes:
It can serve as a guide for formulatinga suitable training and development programme. Performance appraisal can informemployees about their progress and tell them what skills they need to develop tobecome eligible for pay raises or promotions or both.d.
Performance appraisal enables the employee to know how well he isdoing on the job. It tells him what he can do to improve his present performanceand go up the ‘organisational ladder’.e.
Performance appraisal can help reveal the causes of goodand poor employee performance. Through discussions with individual employees,a line manager can find out why they perform as they do and what steps can beinitiated to improve their performance.