Performance Appraisal

Performance Appraisal is defined as a systematic process, in which the personality and

performance of an employee is assessed by the supervisor or manager, against predefined
standards, such as knowledge of the job, quality and quantity of output, leadership abilities,
attitude towards work, attendance, cooperation, judgment, versatility, health, initiative and so
forth.

It is also known as performance rating, performance evaluation, employee assessment,

performance review, merit rating, etc.

Performance Appraisal is carried out to identify the abilities and competencies of an employee
for future growth and development.

Relationship of Performance Appraisal and Job Analysis

Performance Appraisal relates to job analysis, in the sense that job analysis establishes job
requirement, which converts the analysis into standard, on which performance is judged, and
results in defining the basis for performance appraisal.

Objectives of Performance Appraisal

 To promote the employees, on the basis of performance and competence.

 To identify the requirement for training and development of employees
 To provide confirmation to those employees who are hired as probationary employees,
upon completion of the term.
 To take a decision regarding the hike in employees pay, incentives etc.
  To facilitate communication between superior and subordinate.
 To help employees in understanding where they stand in terms of performance.

Method of Performance Appraisal

In the process of designing performance appraisal process, it is important to identify the best
method for assessment. There are a number of methods introduced to gauge the quantity and
quality of work performed by an individual. These methods are broadly classified into two
categories:

 Past-oriented Methods (Also known as Traditional Methods of Performance Appraisal)

 Rating Scales
 Checklists
 Forced Distribution
 Performance test and observation
 Field review
 Confidential Record
 Essay method
 Comparative Evaluation Approaches
 Behaviorally Anchored Rating Scales

Future Oriented Methods (Also known as Modern Methods of Performance Appraisal)

 Management by objectives
 Psychological Appraisal
 360-Degree Feedback

Performance Appraisal is a part of performance management. It helps in gaining the competitive

edge, by improving the performance level of the employees working in the organization, making
rational decisions regarding hike in salaries, promotions, transfers, discharge of the employees,
reducing job dissatisfaction and employee turnover.