Performance Appraisal

Performance Appraisal is the systematic evaluation of the performance of employees

and to understand the abilities of a person for further growth and development.
Performance appraisal is generally done in systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets
and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better
performance.
Objectives of Performance Appraisal
Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage
structure, salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on
right job.
3. To maintain and assess the potential present in a person for further growth
and development.
4. To provide a feedback to employees regarding their performance and related
status.
5. To provide a feedback to employees regarding their performance and related
status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programs.

Advantages of Performance Appraisal

It is said that performance appraisal is an investment for the company which can be
justified by following advantages:
1. Promotion: Performance Appraisal helps the supervisors to chalk out the
promotion programs for efficient employees. In this regards, inefficient
workers can be dismissed or demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation
packages for employees. Merit rating is possible through performance
appraisal. Performance Appraisal tries to give worth to a performance.
Compensation packages which includes bonus, high salary rates, extra
benefits, allowances and pre-requisites are dependent on performance
appraisal. The criteria should be merit rather than seniority.
3. Employees

Development: The

systematic

procedure

of

performance

appraisal helps the supervisors to frame training policies and programs. It

helps to analyze strengths and weaknesses of employees so that new jobs
can be designed for efficient employees. It also helps in framing future
development programs.
4. Selection Validation: Performance Appraisal helps the supervisors to
understand the validity and importance of the selection procedure. The
supervisors come to know the validity and thereby the strengths and
weaknesses of selection procedure. Future changes in selection methods can
be made in this regard.
5. Communication: For an organization, effective communication between
employees and employers is very important. Through performance appraisal,
communication can be sought for in the following ways:
a. Through performance appraisal, the employers can understand and
accept skills of subordinates.

b. The subordinates can also understand and create a trust and

confidence in superiors.
c. It also helps in maintaining cordial and congenial labor management
relationship.
d. It develops the spirit of work and boosts the morale of employees.
All the above factors ensure effective communication.
6. Motivation: Performance appraisal serves as a motivation tool. Through
evaluating performance of employees, a persons efficiency can be
determined if the targets are achieved. This very well motivates a person for
better job and helps him to improve his performance in the future.

Performance Appraisal Tools and Techniques

Following are the tools used by the organizations for Performance Appraisals of their
employees.
1. Ranking
2. Paired Comparison
3. Forced Distribution
4. Confidential Report
5. Essay Evaluation
6. Critical Incident
7. Checklists
8. Graphic Rating Scale
9. BARS

10. Forced Choice Method

11. MBO
12. Field Review Technique
13. Performance Test

A Sample Performance Appraisal Form

(Graphic Rating Scale Method)

Company Logo

Company Name

1. Employee Information:
Name
Job Title
Department
Review Period

Employee ID
Date
Manager

2. Ratings:
1=Poor

2=Fair

3=Satisfactor

4=Goo

5=Excellen

Job Knowledge
Comments
Work Quality
Comments
Attendance/Punctualit
y
Comments
Initiative
Comments
Communication Skills
Comments
Dependability
Comments
Overall
Rating
(average

the

rating

numbers above)

3. Evaluation:
Additional Comments
Goals (as agreed upon by
employee and manager)

4. Verification of Review:
By signing this form, you confirmed that you have discussed this review in detail with your
supervisor. Signing this form does not necessarily indicate that you agree with this
evaluation.
Employee Signature
Manager Signature

Date
Date

Disadvantages of using graphic rating scale

A graphic rating scale lists the traits each employee should have and rates workers
on a numbered scale for each trait. The scores are meant to separate employees
into tiers of performers, which can play a role in determining promotions and salary
adjustments. However, the scale has disadvantages that make it difficult to use as an
effective management tool.

Considerations
If a company uses 15 people to evaluate personnel, the effect may be 15 different
rating scales. Even with intense training, some evaluators will be too strict. Some will
be too lenient, and others may find it hard to screen out their personal agendas.
Rating scales work best when managers and employees agree on the definition and
degree of factors included in the evaluation, and that's difficult to achieve.
Perception
No matter how the rungs on the rating scale are labeled, what is meant as a
compliment by the evaluator -- "you sometimes exceed my 'high' expectations" -may sound like a C+ to the person being evaluated. And C+ sounds way too average
to most employees.
Feedback Block
Workers may not hear the positive feedback in any essay part of the evaluation
because they're fuming at a rating-scale grade they perceive to be too low. They may
also miss the suggestions for improvement because they're basking in a grade that
suggests their work is already superior. A rating scale becomes an obstacle to
substantive give-and-take about an employee's work.
Misleading Scores
Adding up to a final score assumes that an exceptional strength in one area can
mitigate deficiencies in others. Evaluators may allow the "halo effect" to skew the
evaluation, letting an obvious strength subtly boost ratings in other areas.
Middle Muddle
Graphic rating scales have proved best at identifying the very best and the very poor
employees. Because evaluators find it safer to operate in one zone of the scale, it
becomes difficult to differentiate employees who land in the middle group, especially
when those employees have different combinations of strengths and weaknesses.

Proximity Problems
Even with repeated cautions and admonitions to maintain performance logs,
evaluators may overweight employees' most recent behavior in performance
reviews. Two employees might have the same number of errors over the evaluation
period. However, a worker who has had a recent rash of miscues typically is judged
more harshly than one who hasn't.