Definition of Performance appraisal
The process by which a manager or consultant examines and evaluates an employee’s work behavior by comparing it with preset standards, documents the results of the comparison and uses the results to provide feedback to the employee to show where improvements are needed and why, performance appraisals are employed to determine who needs what training and who will be promoted, demoted, retained or fired. A performance appraisal (PA) is a method by which the job performance of an employee is evaluated. Performance appraisals are a part of career development and consist of regular reviews of employee performance within organizations. Need for Performance Appraisal (PA)
Periodic reviews help supervisors gain a better understanding of each employee's abilities. The goal of the review process is to recognize achievement, to evaluate job progress, and then to design training for the further development of skills and strengths. A careful review will stimulate employee’s interest and improve job performance. The review provides the employee, the supervisor, the Vice President, and Human Resources a critical, formal feedback mechanism on an annual basis, however these discussions should not be restricted solely to a formal annual review. 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 programs. 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 programs 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 include 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 programs. It helps to analyze strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programs. 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: a.Through performance appraisal, the employers can understand and accept skills of subordinates. b.The subordinates can also understand and create a trust and confidence in superiors. c.It also helps in maintaining cordial and congenial labour management relationship. d.It develops the...