Performance appraisal is widely conducted in organizations as they concerned about employees’ performance. (DeNisi,2000) defines performance appraisal as “the system whereby an organization assigns some “score” to indicate the level of performance of a target person or group”. It is the process of evaluating the overall employee efficiency and the development in performance. Performance appraisal assesses the actual level of worker performance as well as understands the employee’s capability for future growth and advancement of the employee.
Performance appraisal is used by organization for various purposes. (Bowles and Coates 1993; IRS 1994, 1999; IDS 2007) report that “performance appraisal is used for clarifying and defining performance expectations, identifying training and development needs, providing career counselling, succession planning, improving individuals, team and corporate performance, facilitating communications and involvement, allocating financial rewards, determining promotion, motivating and controlling employees, and achieving cultural change”.
How appraisal is conducted
Types of appraisals
There are many types of appraisals in evaluating employees’ performance. It is important for organizations that design of performance appraisal methods must be congruent with competitive strategy of the organization. Some of the techniques used are as follows: •
Graphic rating scale
Critical incidents method
Behaviourally anchored rating scale (BARS)
Behaviour observation scale (BOS)
Advantages of Performance Appraisal
Organizations can find advantages by properly conducting appraisal system. It provides a valuable opportunity to improve the whole organization performance by concentrating work activities and objectives, recognizing and correcting existing problems and encouraging future performance enhancement. It measures the employees’ performance over a given period of time so that organization can judge the gap between actual and expected performance. Appraisal also identifies the employees’ strengths and weaknesses which assist organization to know whether their employees are needed for training and development in the future. It assists managers in selecting efficient employees for promotion and providing compensation packages which involves allowance, bonus, and higher pay for those employees. Moreover, it motivate employees through performance evaluation which determine their efficiency if expected target are attained. It ensures effective communication between employers and employees. Through appraisal, employers can know and recognize subordinates’ abilities and subordinates can believe and confidence in their superiors. As a result it help increases the work sprit and improve employees’ morale.
Problems with Performance Appraisal
Performance appraisal is critical not only for organizations but also for employees. However, it appears to be one human resource activity that managers and employees do not favourite in conducting it and there are many problems in relation to performance appraisal. The main problem is that some organization assumed that managers know how to conduct the appraisal effectively. The process of appraisal can vary from one organization to another. Thus, managers should be well trained of philosophy of performance appraisal at the organization before they carry out the appraisal. An appraiser who has limited knowledge in conducting performance appraisal could lead to serious problem when technical competence of an appraisee is rated by him. Another problem with performance appraisal is that appraiser rating could be bias including ‘halo and horn effect, the error of central tendency, personal prejudice and the recent performance effect’. Halo effect is the raters rely on rating a person characteristics or behaviour. An appraiser may give high rating in all other areas of work if an employee is less...
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