Performance Appraisal is considered to be the most significant and indispensable tool for an organization. It is a measure of the employees’ performance levels in terms of the specific job’s requirement.
It is a process employed for the purpose of placement, selection for promotions, providing financial rewards and other actions which require differential treatment among the members of a group.
Douglas McGregor says “Formal appraisal plans are designed to meet three needs, one of the organization’s and the other two of the individual namely,
Performance appraisal can also be termed as
· Merit rating
· Behavioral assessment
· Employee evaluation
· Personnel review
· Progress report
· Staff assessment
· Service rating.
According to Levinson, it definitely provides adequate feedback to each individual for his performance and also serves as a means for changing behavior.
Prime Objectives of Performance Appraisal:
· Establishment of performance standards
· Communicating the same to employees
· Acquiring information through personal observation and statistical reports from the respective departments
· Appraising and judging the future potential growth and advancement
· Identifying the deviation between the actual and standard performance levels
· Discussion with the employee for subsequent improvement or corrective action.
1. Personnel Background covering the following details are collected
· Family background
· Marital status
· Specialization and degrees
· Office held
· Work history
· Social accomplishments
· Honors and awards
· Professional or trade organization membership
· Special limitations
· Family problems
· Hobbies and recreational activities
2. Nature of Work: Job performance and personal qualification
· Technical performance
· Level of motivation in current position
· Intelligence as reflected on the job
· Emotional stability
· Leadership skills
3. Overall Performance Rating: Recommended action
Traditional methods: These rely upon evaluating an individual’s creativity, intelligence, drive, dependability, leadership potential, initiative and organizing capability which are more of personal in nature.
Modern methods: These include ranking method, graphic rating scales, forced choice description method, critical incident and 360 degree evaluation methods. The 360 degree appraisal method is employed in big corporate companies where the individual’s overall performance is appraised by his colleagues, boss, customers, suppliers and stake holders.
Management by objectives, management by exception , self appraisal and human asset accounting are other methods used for appraisal.
· The superior must be well trained and a composed person to judge without error or personal bias
· The management must create a feeling of mutual trust and confidence in the minds of employees
· The process must be a fair play without pre-conceived notions
· The performance levels must be appraised rather than personality
· The results must be immediately communicated to the employees
· A post appraisal interview must be arranged.