Understanding The Fundamentals of

Perfrormance Appraisal For Improving

Employees Performance
Introduction
Today Human Resource among other resources of an organisation are consider as
most valuable assets of it. Hence it is necessary for every organisation to motivate and
reward their employees on regular basis in order to ensure their continuous
performance. Therefore one such mechanism that helps an organisation to understand
the strength and weakness of employees is performance appraisal.

Performance appraisal is a systematic, periodic evaluation of personnel with regard to

his or her performance on the job and his potential for development by supervisors or
others familiar with their performance .It includes all formal procedures used to evaluate
the required skill and capabilities of employees for, a particular job and potentials of
group members in a working organisation. It is a continuous process to gather
information necessary for making correct and objective decisions on employees.

Benefits

 Potential employees are often given promotions or demoted on the basis of the
results of performance appraisals.

 An appraisal helps in determining the effectiveness and results of training

programmes. This will give managers data on how to change and evolve
the training programmes.

 The performance appraisal report gives a clear view of an employee’s

performance level which is compensated by enhancement in salary and
offering other fringe benefits.
  After the appraisal, the employees get the opportunity to discuss their concern
with superiors which is not only helpful for resolving any grievance or dispute but
also improves the liaison between the management group and employees.

 Performance appraisals often serve as motivational tools for employees. The

companies must offer a bonus or other monetary benefits to employees who are
able to improve their performance appraisals from one period to the next.

Features of Good Performance Appraisal System

A good performance appraisal system is very beneficial for your organization. It lets you
automate your performance appraisals and serves as a platform to receive
continuous employee feedback by saving the time and efforts of HR managers.

Here are some of the features you should be looking for when choosing
your performance appraisal software:-

1. Thorough Performance Reviews

Performance Management Software should let you set up and track goals, rate job
performance, get insights into each employee’s performance.

2. Performance Appraisals On The Go

A good performance appraisal system lets you to conduct efficient performance
reviews on the go. A cloud-based system lets you access the software anywhere you
are and get work done.

3. Customizable As Per Your Needs

A Performance appraisal system should let you streamline the performance
management process as per your business requirements. Customize the workflow,
configure multi-level appraisals, approvals and remainders.

4. Integrates With Other HR Tools

Instead of a standalone performance appraisal system, you should look for a system
which lets you integrate with other HR apps like feedback, on-boarding, off-boarding,
payrolls, etc.

5. Gathers 360 Feedback

Get an in-depth evaluation of an employee’s engagement and performance by setting
up team-wide or company-wide 360-degree feedback.
Problems with Performance Appraisal

1.The Halo effect

It is also known as the horns effect. It is a situation where rater’s overall positive or
negative feelings towards an employee influences their evaluation easily.

It is a fact that each employee will always portray certain areas as their weakness and
others as their strengths.  What you need to do is to ensure that you do not colour the
entire evaluation with a particular impression.

2. Contrast error
It is also important to keep in mind that you are not comparing or contrasting employees
against each other. The contrast error occurs when employee is rated without taking
into account the performance standard. The negative consequence of this error is that it
brings down scores of good performers, they feel demotivated and hence it affects their
productivity.

3. Rater bias
The rater’s prejudices and biasness also influences performance rating. For example,
a appraiser can underrate an appraisee based on race, sex, religion, appearance and
favouritism. Just because you may not like a person doesn’t mean the evaluation of
their performance must reflect that. Keep it as objective as possible.

4.Recency effect
Many organisations ,has tendency of rating employees by basing their evaluation on
what an employee has achieved just before the assessment. In this case, it sounds
unfair to employees who have been outstanding throughout but later faulted few days to
assessment and vice versa because the appraisal will not be able to reveal the actual
reality.

5. Leniency or severity error

Leniency error is the tendency of a managers to rate an employee higher than what his
performance warrants. Reasons that a manager might do this could include avoiding
confrontations, or feeling that by giving the employee a high rating, he will work harder
to live up to the rating.

Conclusion
Employees are most important assets of an organisation so measuring their
performance on periodic basis is necessary, in order to determine whether employees
are able to meet set standards effectively and efficiently and also to find out any
deviation in performance so to give them feedback immediately in order to improve their
further performance. Therefore very organisation must conduct performance appraisal
on yearly basis in order to improve employee’s as well as organisational productivity
and must offer improvement opportunities, such as training, seminars, mentorships or
classes to employees desiring to improve their performance appraisals.