Performance Appraisal

Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. 
According to Flippo, a prominent personality in the field of Human resources, “performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job.”
In the words ofYoder, “Performance appraisal refers to all formal procedures used in working organizations to evaluate personalities and contributions and potential of group members.” Thus performance appraisal is a formal programme in an organization which is concerned with not only the contributions of the members who form part of the organization, but also aims at spotting the potential of the people.”

It is a systematic way of judging the relative worth of an employee while carrying out his work in an organization. It also helps recognize those employees who are performing their tasks well and also- who are not performing their tasks properly and the reasons for such (poor) performance.
According to International Labor Organization, “A regular and continuous evaluation of the quality, quantity and style of the performance along with the assessment of the factors influencing the performance and behavior of an individual is called as performance appraisal.”
In short, we can say that performance appraisal is expected to result in an assessment of: development potential of the employees, training needs for the employees; capabilities of employees being placed in higher posts, behavior and obedience of the employees; and the need of the organization to evolve a control mechanism.
Performance appraisal is generally done in systematic ways which are as follows:

• The supervisors measure the pay of employees and compare it with targets and plans.
• The supervisor analyses the factors behind work performances of employees.
• The employers are in position to guide the employees for a better performance.

Objectives of Performance Appraisal
Performance Appraisal can be done with following objectives in mind:

1. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right job.
3. To maintain and assess the potential present in a person for further growth and development.
4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.

Advantages of Performance Appraisal
It is said that performance appraisal is an investment for the company which can be justified by following advantages:

1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.
2. Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance. Compensation packages which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority.
3. Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programmes. It helps to analyse strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard.
5. Communication: For an organization, effective communication between employees and employers is very important. Through performance appraisal, communication can be sought for in the following ways:
6. Through performance appraisal, the employers can understand and accept skills of subordinates.
• The subordinates can also understand and create a trust and confidence in superiors.
• It also helps in maintaining cordial and congenial labour management relationship.
• It develops the spirit of work and boosts the morale of employees.
  All the above factors ensure effective communication.
7. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future.

Factors Affecting Performance Appraisal

There are various factors which may influence the performance appraisal system in any organization.

There are some factors which introduce bias whereas; some other factors hinder purposeful assessment.

Such factors are as follows:

1. Value System of Evaluator: The task of evaluator is to assess the work of subordinate and write reports of the same. They are projected to do this for some purposeful assessment. It happens that evaluator sometime judges the performance on the basis of their own value system. Each person has his own value system and socio-cultural environment. Mostly, it is found that the reports are influenced by the evaluator’s value-system. This subjective element has lot of impact on final report.
2. Dominant Work Orientation: The performance Appraisal Report of a subordinate is prepared by a superior is found to have an impact by the dominant work orientation of the superior officer. Sometimes there is more emphasis on certain aspect of the work as compared to other aspect which may be equally important by the superior. It introduces subjectivity performance appraisal system. A superior may evaluate the subordinate on the basis of following elements:
1. Inclination for work of dynamic nature.
2. Liking for routine work and strict maintenance of.
3. Importance on inter-personal relations and rank.
4. Emphasis on qualities which do not have much functional utility; and
5. Emphasis on consistency to some philosophy.
   These elements bring subjectivity in the process of evaluation, influence the judgment of the superior and distort the evaluation of performance of the subordinates.
3. Loyalty: It plays a vital role in evaluating employee. An Employee shows loyalty due to many reasons such as common values, objectives, emotional needs, interests, caste, religion, language or region. Loyalty brings the superior and the loyal subordinate closer and closer to each other, and creates distance between those employee who are not loyal to their superior. This makes assessment of superior to be biased.
4. Level of Achievement: Subordinates evaluation may also depend on the level of achievement of the superior. If there is a vast difference between the level of achievement of the superior and Subordinate, then it can create problems of adjustment and purpose for which evaluation is done is not achieved.
5. Factors Hindering Objective Assessment: There are various factors which obstruct the objective appraisal of the performance of the subordinates. These factors are as follows:
1. Superiority complex of the superior reporting officer.
2. Overall performance assessment do not take place only certain incidence are assessed.
3. Past-record of the subordinate.
4. Personality of the subordinate.
5. Ability of the subordinate to exercise influence at higher level.

In the organizational context performance appraisal is an evaluation of personnel in a systematic way by superiors or others familiar with their performance. It is also described as merit rating in which one individual is ranked as better or worse in comparison to others. The basic purpose in this merit rating is to determine an employee’s eligibility for promotion. However, performance appraisal is a broad term and it may be used to ascertain the need for training and development, salary increase, transfer, discharge, etc. besides promotion. It is the systematic assessment of an individual with respect to his or her performance on the job and his or her potential for development in that job.

Performance appraisals should be conducted on a frequent basis, and they need not be directly attached to promotion opportunities only. It is important because of several reason s such as: Personal Attention, Feedback, Career Path, Employee Accountability, Communicate Divisional and Company Goals. Thus, objectives into the appraisal system may draw attention to areas for improvement, new directions and opportunities. The methods of performance appraisal are categorized in two ways traditional and modern methods. Each organization adopts a different method of performance appraisal according to the need of organization, with each method having its own advantages and drawbacks. The performance appraisal system of one organization may vary from other organizations; this may lead to few changes in appraisal process. Some of the problems faced in appraising employees arebiasness of rater which may include: (a) halo effect, (b) central tendency error, (c) the leniency and strictness biases, (d) personal prejudice, and (e) the recent effect etc.

Few innovative performance appraisal practices are: 1) Managerial personnel are allowed to challenge or appeal appraisal decisions made by evaluator. 2) Employee management skills are important in performance appraisal.3) Personnel department gives a clear instruction of policy and its implementation. 4) Evaluation to be made only on the basis of performance of employee at work.5) It has also enhanced role clarity in the Organization.

The latest mantra being followed by organizations across the world being - “get paid according to what you contribute” - the focus of most of the organizations is turning to performance management and specifically to individual performance. It is always questioned in terms of its effectiveness and the problems of reliability and validity exist which could be improved if the supervisors are told that they themselves will be evaluated on the basis of how seriously they are performing their duties, To perform assigned task of evaluation in a better way superior should be provided with better training of writing report. Thus, performance appraisal is the technique which is essential for every organization.