Central Luzon Doctor’s Hospital Educational Institution
Topic: Performance Appraisal
(1) According to Edwin Flippo, "Performance Appraisal is the systematic, periodic and impartial rating of an employee's excellence, in matters pertaining to his present job and his potential for a better job." (2) According to Dale Beach, "Performance Appraisal is the systematic evaluation of the individual with regards to his or her performance on the job and his potential for development."
The Performance Appraisal process involves the following steps: (1)
Establish the Standards of Performance.
Communicate these standards to employees.
Measure the actual performance.
Compare actual performance with the standards established. (5)
In case of variation, initiate corrective action.
Communicate the rating to the employee.
Discuss the feedback with the employee.
Conduct post-appraisal Interview.
Initiate corrective action if required.
Purpose / Uses
The main purposes of employee assessment are as follows:
Identify employees who are eligible for salary increase. (2)
Generate data to take personnel decisions such as promotion, transfer and lay-off or termination decision. (3)
Determine the training and development needs of the employees. (4)
Validate the selection process.
To measure whether standards laid down has been achieved by the employees or not. (6)
Estimate the future requirement of work force.
Helps to recognize potential of promising employees.
Last but not the least, performance appraisal also helps in motivating employees by providing feedback about their level of performance.
Advantages of Performance Appraisal:
SWOT Analysis: Performance Appraisal gives a complete idea of the employee's strength, weaknesses and based on that their opportunities and threats. (2)
Career Planning: On the basis of one's own SWOT analysis, an employee can have his career plans. (3)
Suitable Placement: Performance appraisal enables a company to give suitable placement to an employee based on their talents and skills. (4)
Self-Development: Performance Appraisal is very much a positive activity which enables an employee to know his own weaknesses and also enables him to remove their weaknesses and lead to self-development. (5)
Effective Training Program: Training programs can be drawn out on the basis of the needs of employees to remove their weaknesses. (6)
Sound Personnel Policies: Personnel policies for promotions, transfer must be sound and objective. Performance Appraisal provides valuable information and reliable data for such decisions. (7)
Employee – Employer Relations will be healthy if performance Appraisal information will be used for personnel management. This will minimize grievances and improve confidence in the management. (8)
Higher Employee Productivity: Employer morale will be high because there can be a system of rewards for employees with higher performance. This will improve organization productivity. (9)
Performance Appraisal will help in potential human resource planning.
Limitations of Performance Appraisal:
(1) Personal Bias: The biggest limitation of performance Appraisal is subjectivity. Due to human element in Appraisal, there is always a fear of one's own opinion coming in the way of Appraisal. (2)
Halo Effect: The tendency of an individual to rate an employee consistently high due to some earlier good performance rather than his existing performance is called as carrying a halo around oneself. (3)
Horn Effect: The tendency of a superior to rate a subordinate lower than his performance justifies due to some recent/earlier failures. (4)
Lack of Uniform Standards: The standards used by different departments in the organisation may not be the same, hence, rating becomes unscientific and employees suffer. Some rates are too liberal while others are too strict causing lack of uniformity. (5)
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