Everything you need to know about performance appraisal

If you’re looking for a meaning to performance appraisal it means a systematic evaluation process of the performance of all employees in a particular organization. This work is mainly done so that all employees get an understanding of how things function, the growth and development of both the organization and individuals. Given below are the objectives of a complete 360-degree performance appraisal:

  1. You get to know the weaknesses and strength of the resources available so that they can put them in slots they are meant for.
  2. To decide the salaries, packages, pay structure, etc. for the employees.
  3. To understand the interests of the employees so that future development can be looked into.
  4. Give constant and quick feedback to the manpower present so that they can know about their progress.
  5. Keep analyzing the performance of the employees so that you know who deserves a promotion and who doesn’t.

Why is a performance appraisal so important?

Discussing this on a deeper sense, we can say that an appraisal is a bonus, a sort of an asset to the organization. The following statement can be summed up in the following points:

  1. It gives validation to the HR managers: This appraisal tells the managers that they’ve made the correct decision with the employees they’ve chosen. It is good to keep this as a sample study for future employee selection.
  2. It allows compensation: Appraisal helps greatly in the process of merit ranking from where a proper compensation programme can be written. This type of system allows good bonuses, pay, benefits and variable allowances.
  3. Promotion: Promotion helps in deciding which competent employee should be pushed forward. But to know who should be promoted, appraisal is important. Appraisal can also be used to dismiss or demote a person from a company.
  4. Employee development programme: A good appraisal system allows the HR managers to develop a good quality training programme. This will pique the interests of the employees as well and will allow them to discuss and their desires of wanting to get trained in a number of programs with their managers.
  5. Motivation: Appraisal can also be a motivational tool for the employees working for a firm. If they know that there are standards and targets they need to achieve, the employees get motivated to perform their best.

How is a performance appraisal done?

A performance appraisal is classified into two methods: modern and traditional methods.

Let’s start with a few methods:

performance appraisal
  1. The rating scale method: This method is very common for assessing the performance of employees. Under this method, there is a scale from the score of 1 to a score of 10. The different components of this trait are regularity, attitude, accountability, and performance. This is then rated. A lot of telecommunication industries use this method to rank and evaluate employees. All the numbers of points given for the traits are put together. The employee who gets more is considered a good performer.
  2. Appraisal using an essay: This method is also known as the free-form method because, in this methodology, the person in charge will get a detailed description of the performance of the manpower. This also includes everything starting from proof he perform to other supporting documents. However, this method becomes extremely biased at times. The person rating using this method can also use the rating scale method to be able to rate the strengths and weaknesses of the employee in question so that his essay appraisal is validated. This method is considered very time consuming because the person rating the employee has to find time to put together all the documents. This method is supposed to be a non-quantitative method of appraisal.
  3. Ranking method: This method uses a comparison technique. Here the employer or the manager compares the performance of one employee with the performance of other employees who hold the same rank. A fixed number of employees are kept in different types of performance activities like poor, below average, excellent, average, good etc. This method is crucial for making important decisions like which person should be laid off and which person deserves a promotion in a particular period. When such circumstances arise, this method acts as a lifesaver for the HR manager.
  4. Critical incident method: The name tells you how for this method, critical incidents are used to keep a track. Here on a daily basis, logs are maintained for each employee to record incidents, decision made and behavior and events pertaining to each employee. When the performance has to be concluded, these events are put together. A major drawback of this method is that the negative incidents are on a higher scale than the positive incidents. This is because people tend to overlook the good and focus on the bad. This method of appraisal is not something appreciated by employees.
  5. The confidential report system: This method of appraisal is widely used in all government organizations. Here the supervisors in the organization will write a confidential report that pertains to the behavior of the subordinates in respect to his/her duties and behavior during the course of the working period. This report does not get shown to anyone and after being written, it is shown to the top management. In India, this method is widely used by almost all government organizations like the Police department, the CBI, the Armed Forces etc. When it comes to assessment, the following factors are assessed in totality- how prompt the employee is, what his temperament is like, how sincere and truthful he is, if he’s missing too much work, how he holds up the name of the organization in public. Appraisal is important for not only big organizations but schools as well. Students get a glimpse of what they’ve learned and how they’ve fared throughout the entire year. Parents get to understand what the points their child can improve on are. Teachers are monitored by higher authorities in a more extensive way than they were before. Teachers are required to prepare planners and log books and other presentations to show their involvement in class.

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