Meaning and definition of performance appraisal and its objectives
In simple terms, appraisal may be understood as the assessment of an individual’s performance in a systematic way, the performance being measured against such factors as job knowledge, quality, and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health, and the like. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed.
Definitions of Performance Appraisal:
A formal definition of performance appraisal is:
“It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development.”
A more comprehensive definition is:
“Performance appraisal is a formal, structured system of measuring and evaluating an employee’s job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society all benefit.”
The second definition includes employee’s behavior as part of the assessment. Behavior can be active or passive. Either way behavior affects job results. The other terms used for performance appraisal are: performance rating, employee assessment, employee performance review, personnel appraisal, performance evaluation, employee evaluation, and merit rating. In a formal sense, employee assessment is as old as the concept of management, and in an informal sense, it is probably as old as mankind. Nor performance appraisal is done in isolation. It is linked to job analysis.
Terms used in Performance Appraisal:
1) Performance Appraisal: It is the assessment of an individual's performance in a systematic manner in relation to the job assigned.
2) Appraisal Process: It involves various steps need to be taken in order to complete the appraisal work in an orderly manner.
3) Ratee: Ratee may be defined as the individual, work group, division or organisation used for appraisal purpose.
4) Rater: Rater is immediate supervisors, specialists from HR department, subordinates, peers, clients or committees to whom the responsibility of appraisal is assigned.
5) Performance Interview: It is one step in appraisal process. After completion of appraisal work, performance interview is arranged. Here, the raters should discuss and review the performance with the ratees, so that they will receive feedback for their information and self development. Also called post appraisal interview.
Purposes of Performance Appraisal:
Performance appraisal of employees is needed for the following two broad purposes: (A) Administrative purposes; and (B) Self-improvement/Self-development of employees.
A) Administrative Purposes:
(1) Promotion and Placement of Employees: One major administrative purpose of performance appraisal is to promote employees as per their competence and performance in the previous period. Quality of performance serves as a base for promotion particularly when promotions are given by merits. Appraisal indicates whether the employee can contribute still more at a higher level job and accordingly decision about his promotion is taken. This promotion on appraisal basis is in the interest of both-the management and employees. Performance appraisal is useful for the selection of right person for the right type of promotion. This is because it clearly distinguishes between effective and ineffective performers of jobs assigned Placement of an employee in the right department and also at the right position is possible through performance appraisal as such appraisal suggests the position at which an employee can give his best performance. Performance appraisal is not useful...