Performance Management is a holistic, all year round process of managing employee performance (i.e., planning, developing, monitoring, rating, and rewarding employee contributions) for managerial decision making. This is different from Performance Appraisal which is a onetime activity of rating the performance of the employee. Performance appraisal is measuring the performance of the employee by rating their performance for the year.
While these concepts can and should be linked and integrated, they remain distinct in some respects, particularly with regard to establishing individual accountability and dealing with poor performers. We also provide information that specifically addresses Training and development also involve performance appraisal, and this is one of the manager’s most important tasks. Clarionttech training session looks at the meaning of performance appraisal, and its uses. It also discusses performance appraisal methods and problems associated with each.
Performance appraisal is one of the key functions in human resource management. Human Resource Management Course addresses the “what is” and the “why of” performance appraisal. Performance appraisal is a periodic formal assessment of work achievement as a basis for future actions and decisions. Performance appraisal system is not a tool for punishment but a tool for the enhancement of employee performance.
Informal Performance Appraisals
This is the process of continually feeding back to subordinates information about how well they are doing their work for the organization. It is conducted on a day-to-day basis. The manager spontaneously mentions that a particular task was performed well or poorly, or the subordinate stops by the manager’s office to find out how a particular task was received.
Formal Systems of Performance Appraisal
This is a formalized appraisal process for rating current subordinate performance, identifying subordinates deserving raises or promotions, and identifying subordinates in need of further training. It usually takes place half-yearly or yearly.
Formal performance appraisal has four major purposes, including the following:
- To let direct report/subordinate know formally how their current performance is being rated;
- To identify direct report who deserve merit rises;
- To locate direct report who need additional training; and
- To identify candidates for promotion.
- For Salary Increase
It is important to emphasize that formal systems of performance appraisals are not intended to replace, but to complement the informal appraisal process.
Performance Appraisal Methods
There are a number of performance appraisal methods. These include graphic rating scale, checklist, essay appraisal, the behaviourally anchored rating scale (BARS), and the behaviour observation scale (BOS).
Who is Responsible for Formal Performance Appraisal?
Five basic appraisal approaches have evolved in organizations. We highlight these as follows:
Appraisal by Supervisors: Managers or the supervisors of employees evaluate performance. Appraisal by superiors is by far the most common approach. However, it can be usefully augmented by other approaches which are becoming more popular.
Appraisal by A Group of Superiors: Subordinates are evaluated by managerial committee or by a series of managers who fill out separate rating forms. Because it relies on a number of views, this approach is often considered more effective than appraisal by a single superior.
Self-Appraisal. Self-appraisals are relatively new and not widely used. However, individuals do perform an element of self-appraisal in some of the more traditional appraisal systems. When self-appraisal is used, managers reinforce their evaluations with an individual’s assessment of his or her own performance.
Appraisal by Peers: An individual is rated separately by a group of peers or co-workers and the results are averaged. Lathan and Wexley (1981) suggest that peer ratings are both acceptably reliable and valid and have the advantage that peers have a more comprehensive view of the appraisee’s job performance. They note the problem, though, that peers may be unwilling to appraise each other.
Appraisal by Subordinates: An increasing number of organizations are having subordinates rate their own manager’s performance and leadership as well. This approach is common on certain universities, where faculty members are often asked to evaluate their dean on a number of performance measures.
360 Degree Feedback: This is a feedback on an employee’s performance being provided by the manager, different people or departments an employee interacts with
Problems Affecting Performance Appraisal
Several common problems have been identified in performance appraisals. These include the following:
(i) Lack of Management support
(ii) Financial challenges
(iii) Shifting of Standards: Some managers rate each individual by
different standards and expectations.
(iv) The Halo Effect: This occurs when a manager allows general
impressions of an individual subordinate to influence his or her judgement on each separate item in the performance appraisal,
(v) Rater Biases: Some managers allow their personal biases, such as
prejudices regarding sex, colour, race or religion, to distort ratings.
(vi) Different Rater Patterns: Managers differ in their rating
styles. Some managers rate harshly, other easily.