Meaning of performance appraisal

The history of performance appraisal also called performance review, performance evaluation, performance assessment, performance measurement, employee evaluation, personnel review, staff assessment; service rating etc. is quite brief. Its roots in the early twentieth century can be traced and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of world war two more than sixty years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world¶s second oldest profession! Performance appraisal is one of the important constituents of performance management. The need for performance appraisal arises because every person has a different personality and different situational, social, psychological, and physiological traits. Performance appraisal is and assessment of an employee in performing his job. It brings out the differences of performance among the employees working in an organization. Employee performance is the degree to which employees accomplish job requirements. It is a continuous process of measuring an employees past or present performance quantitatively and qualitatively, against the background of performance criteria within the ambit of his job role and about his future potential in an organization. Performance appraisal is an important managerial tool to clarify performance criteria and to enhance future individual performance. It provides a rationale basis for various hr decisions such as rewards, career planning, transfers, training, counseling, mentoring, termination, etc. Employees motivation to perform to develop personal capabilities, and to improve future performance is influenced by the feedback of past performance.

However, in spite of performance appraisal being the oldest managerial tool to influence performance, it is fraught with deficiencies. The way appraisal is being conducted spells out its effectiveness because it changes with changing conditions, priorities, and strategies. Performance appraisal provides an opportunity to communicate to employees the mission, strategy, vision, values, and objectives of the organization and personalizes organization strategy into individual performance criteria. Performance appraisal is an important basis for changing performance plan including performance criteria (goals/targets/objectives) and standards of behaviour, as business plans and conditions change. It involves the following:

which assessment procedure to use. Performance assessment is the process that measures employee performance. Performance appraisal defined A few note worthy definitions are Performance appraisal is a process of systematically evaluating performance and providing feedback upon which performance adjustments can be made. but the final decision on appraisal lies with the line managers. It involves deciding what to assess. Performance appraisal may be defined as any procedure that involves setting work standards . Performance appraisal is a system of review and evaluation of an individual¶s (or team¶s) performance.. measured. The hr department serves a policy making and advisory role. and how to communicate assessment results. and providing feedback to the employee with the aim of motivating that person to eliminate performance deficiencies or to continue to perform above par. . It designs appraisal forms and provides guidance. and management of human performance in organizations. measurement.Setting new expectations or action plans to improve performance during the year Establishing performance plans for the next year Affirming behaviour that should be reinforced. who should make the assessments. Performance appraisal is a formal and systematic process by means of which the relevant strengths and weaknesses of the employees are identified. assistance. and training on using appraisal tools to managers. Performance appraisal is the system whereby an organization assigns some score to indicate the level of performance of a target person or group. recorded. Performance appraisal involves the identification. and developed.

o Some of the characteristics of performance appraisal are Performance appraisal provides reassurance to employees that they are contributing and doing the right things. recognize contributions made. and management of human performance in organizations. Performance appraisal is a basis for legally defensible management actions. Performance appraisal is a valuable source of talent management. and seeks to provide feedback. Performance appraisal creates awareness of the impact on desired results such as customer satisfaction. measurement. Performance appraisal provides for administrative decisions and reward management of employees. Performance appraisal is a basis for legally defensible management actions. etc Performance appraisal provides opportunities for self development of employees.Characteristics of performance appraisal Performance appraisal is a systematic process of evaluation of individual job performance. Performance appraisal is a foundation of career and succession planning. speed. Performance appraisals reveals the adequacy of performance in terms of quantity.           . and forms the basis of hr decisions. It is the identification. timeliness. Performance appraisal is a critical tool for training and development of employees.

Management assesses the performance of employees to maintain organizational goals. and provides an opportunity for self reflecton. The rationale for differential treatment of employees needs to be consistent with the or organizations values. and involvement in the organization. as depicted in fig 7. the major objectives of performance appraisal can be divided into two broad categories. Objectives for performance appraisal can be best understood in terms of potential benefits. writing job descriptions.1 . interpreting. It can increase mutuality and strengthen communication between employees and the management. it can impart a better understanding of their job. test validation. which constrain management actions in many decisions and actions. selecting relevant appraisal criteria. For employees. It also needs to be consistent with legal requirements. philosophy. Organizational goals clarified so they can be more readily acceted Improve institutional/departmental manpower planning. setting performance criteria.Objectives of performance appraisal Performance appraisal can be viewed as the process of assessing and recording employee performance for the purpose of making judgments about employees that lead to decisions. through encouragement Rewards distributed on a fair and credible basis. and collecting. Performance appraisal should also be viewed as a system of highly interactive processes which involve personnel at all levels in differing degrees in determining job expectations. Employees are interested in having an assessment of their work from the viewpoint of personal development. and limitations. (1989) identified the following:           Increased motivation to perform effectively Increased self esteem of employees New insight gained into employees and managers Better clarity and definition of job functions and responsibilities Valuable communication developed among appraisal participants Increased self understanding among employees as well as insight into the kind of development activities that are of value. It can help identify development needs. Performance appraisal has different objectives for the management and for the employees. developing assessment tools and procedures. Thus. work satisfaction. and reporting results. and development of teaining programmes Inview of the above mentioned points. and strategy. skills. a spirit of mutuality is essential in an effective performance appraisal system. Mohrman et al.

id any. On the other hand. It was felt that a cut in pay. These observations were confirmed in empirical studies. if their performance was better than the managers expectation. Performance appraisal is a potent stimulus and guide for employee self analysis. Pay rates were important. If an employee¶s performance was found to be less than ideal. Little consideration. that is. All this has now changed with rapid globalization and stiff competition. but they were not the only element that had an impact on employee performance. The first relates to immediate situation and the latter relates to future.Making development decisions Performance appraisal systems began as simple methods of income justification. . As a result. or a rise should provide the only required impetus for an employee to either improve or continue to perform well. The process was firmly linked to material outcomes. Performance appraisal is now used to motivate and guide the employees towards purposeful personal development of skills and competencies. a pay rise was in order. For example. could also have a major influence. It is the tool for administration as well as development. It was found that other issues. such as morale and self esteem. early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance. but more often than not. the traditional emphasis on reward outcomes was progressively rejected and the potential usefulness of appraisal as a tool for motivation and development was gradually recognized. and a contribution to self development planning. Sometimes this basic system succeeded in getting the results that were intended. a cut in pay would follow. appraisal was used to decide whether or not the salary or wage of an individual employee was justified. was given to the developmental possibilities of appraisal. it failed.

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