Performance appraisal is a process concerned with determining how well employees are doing their jobs, communicating that information to the employees and establishing a plan for performance improvement.
Appraisal is the judgment of an employee’s performance in a job, based on consideration other than productivity atone. What is being assessed in appraisal is the employee’s performance in carrying out the general duties of his/her role, together with any specific targets that have been set.
Performance appraisal is the process of determining and communicating to an employee how he is performing on the job and establishing a plan of improvement. They tell an employee how well he is performing and the future level of effort and took direction.
Reasons for Performance Appraisal
- For making administrative decisions relating to promotions, firings, layoffs and merit pay increases. It helps a manager decide what increases of pay shall be given on grounds of merit.
- For determining the future use of an employee.
- Appraisal can provide needed input for determining both individual and organizational training and development needs, through identifying strengths and weaknesses.
- Appraisal encourages performance improvement. They may motivate the employee to do better in his current job due to knowledge of results, recognition of merit and the opportunity to discuss work with his manager.
- Appraisals help to identify an individual’s current level of performance.
- Information generated by appraisal can be used as an input to the validation of selection procedures.
- Appraisal information is an important input to human resource planning and succession planning, career planning and so on.
By making effective use of the performance appraisal system, an organization may seek to: –
- Improve productivity
- Promote internal control through timely detection and feedback on actual performance
- Create a positive work environment
- Stimulate, recognize and reward achievements
- Provide objective measures of performance
- Furnish information for other HR sub-systems.
Frequency of Performance Appraisal
Despite the many potential benefits of appraisal, many organizations do not make effective use of the system. When appraisal is infrequently used, employees voice concern about the possible abuse. There seems to be no real consensus on how frequently performance appraisals should be done, but it is good to have them as often as in necessary to let employees know what kind of job they are doing, and measures to be taken for improvement.
An annual appraisal is not enough. For most employees informal performance appraisals can be conducted two or three times a year in addition to an annual formal performance appraisal.
Key Principles in the design of Appraisal Schemes.
- Create motivation to change or improve behaviour.
- Provide recognition for successful performance.
- Provide valid and reliable information for pay decisions.
- Provide guidance on what skills, competences and behaviour are needed to meet expectations.
- Need to be simple, clear and written in accessible language.
- Must make realistic demands on employees and managers time and other resources.
- Must be perceived to be fair.
PERFORMANCE APPRAISAL METHODS
Selection of a Performance Appraisal Method
Whatever method of appraisal an organizational uses, it must be job related. Therefore before selection of a method, an organization must conduct job analyses and develop job descriptions.
Methods of Performance Appraisal
- Goal setting or Management by Objectives (MBO).
- Multi-rater (360 – degree feedback).
- Ranking methods.
- Rating methods.
- Work standards approach.
- Essay appraisal.
- Critical – incident appraisal.
- Checklist.
- Assessment centre.
- Open –ended method.
GOAL – SETTING OR MANAGEMENT BY OBJECTIVES
This is more commonly used with professional and managerial employees. Other terminologies used for this include; management by results, performance management, results management and work planning and review programmes.
The MBO process consists of the following steps:-
- Establishing clear and precisely defined statements of objectives for the work to be done by an employee.
- Developing an action plan indicating how these objectives are to be achieved.
- Allowing the employee to implementing the action plan
- Measuring objective achievement
- Taking corrective action when necessary
- Establishing objectives for the future.
For MBO to be successful;
- Objectives should be quantifiable and measurable
- Objectives should be challenging yet achievable
- Objectives should be expressed in writing and in clear, concise, unambiguous language
- Employees should participate in the objective-setting process
- The objectives and action plan must serve as a basis for regular discussions between manager and employee
