ll companies have some formal or informal means of appraising their employees’ performance. If employees’ performance is good, organizations will want to reinforce it; and if it is bad, they will try to take corrective actions. Performance appraisal is the ongoing process of evaluating and managing both the behavior and outcomes in the organization (Carrell, Elbert & Hatfield, 2008). It is not a process that happens once a year or every six months, but one that happens every day. Stripped to its essentials, performance appraisal always involves setting work standards, assessing the employees’ actual performance relative to those standards, and providing feedback to the employees with the aim of motivating him or her to eliminate performance deficiencies or to continue to perform above par (Dessler, 2011). Indeed, performance appraisals are widely used for administrating wages and salaries, giving performance feedback, and identifying individual employee strengths and weaknesses (Mathis & Jackson, 2011).
Definition of Performance Appraisal
erformance appraisal is the process of evaluating the behavior of the employees in the work place (Maxwell, 1992). This process assumes that the employees are aware of their performance standards, and that the supervisor also provides the employees with the feedback, development, and incentives required to help the person eliminate performance deficiencies. Basically, performance appraisal is intended to engage, align, and coalesce individual and group effort to continually improve overall organizational mission accomplishment (Vance, 2006). According to Dessler (2012, p. 332), “Performance appraisal means evaluating an employee’s current and/or past performance relative to his or her performance standards.” Dessler also emphasized that performance appraisal aims to improve performance. Moreover, performance appraisal can also provide answers to wide array of work-related questions, and by advancing a road map for success, poor performance can be improved as recommended by Mathis & Jackson (2011, p. 329).
Organizations use various terms to describe this process. Performance review, annual appraisal, performance evaluation, employee evaluation, and merit evaluation are some of the terms used (Carrell, 2008).
Purposes of Performance Appraisal: Why Do It?
erformance Appraisal has many facets. It is an organizational intervention. It is a measurement process as well as an intensely emotional process. Above all, it is an inexact, human process. Not surprisingly, therefore, it is judged effective in less than 10 percent of the organizations that use it (Cascio, 1998, p.303). So, why do appraisals continue to be used? Most importantly, what purposes do they serve? According to Noe, et al. (2010, pp. 355-359) there are three purposes served by the formal performance evaluation: Administrative purpose: The formal evaluation is used to collect information to make personnel decisions for such things as raises, promotions, terminations, and layoffs. This tends to be the area where most organizations focus their attention. Developmental purpose: The performance evaluation should also be used to identify the employee’s strengths and weaknesses. From there, future opportunities in the organization can be identified to take advantage of the employee’s strengths. At the same time, a development plan can be built to try to address the employee’s weaknesses through training, on the job experience, or coaching. Strategic purpose: This is an area where few managers focus their attention in the performance evaluation process. This time provides an excellent opportunity for the manager to discuss the link between the employee’s performance and the strategy of the organization. Here, the manager can take the time to show how the employees contribute to the overall success of their department and the organization as a whole. Besides these...