Performance Appraisal

Meaning & Definition

Performance Appraisal

Performance appraisal refers to periodic review and evaluation of an employee’s job performance (skills, achievements etc) and contribution to the company. They can be conducted whenever but tend to be annual, semi-annual or quarterly. Performance appraisals are a way for companies to determine which employees have contributed the most to the company so they can reward them accordingly.

Frequently Asked Questions (FAQ's)

  1. What are the methods of performance appraisal?

    1. Management by Objectives (MBO):

      This method seeks to improve the performance of the organization by setting clear goals agreed upon by both employees and managers. Set goals should be challenging but achievable. Both managers and employees must analyse past performance and identify problems. The information received should be used to solve the problems and needs of the organization.

    2. Psychological Appraisals:

      Psychological assessment is one of the most exciting and intuitive assessment methods. This approach assesses the potential for future performance rather than the past performance of employees. It focuses on the emotional, intellectual, and other personal characteristics of employees that affect their performance.

    3. 360 Degree Feedback:

      360-degree feedback is the systematic collection and feedback of employee performance data from all of their colleagues, managers, and even customers. It is one of the most commonly used evaluation methods. Since the involvement of managers, colleagues, and customers is involved, this method provides an overview of performance reviews. It helps to have different perspectives in the performance evaluation process.

    4. Assessment Centre Method:

      In this method, employees are judged to be participating in activities such as in-basket exercises, role plays, discussions, computer simulations. Their persuasiveness, communication skills, confidence, sensitivity to the feelings of others, mental alertness, administrative ability, etc.

    5. Behaviorally Anchored Rating Scale (BARS):

      Behavior classification scales are designed to take advantage of both quality and quantitative data in the performance testing process. BARS compares a person's performance to a specific behavior associated with the classification of numbers. He compares a person's performance to a specific behavior that is linked to a 5 to 9 digit score.

    6. Cost Accounting Method:

      In this method, the organization evaluates employee performance based on the monetary output from the inputs. It is confirmed by analysing the costs associated with retaining employees and the benefits they get from input.

  2. Why is performance appraisal important?

    1. Establishing compensation guidelines

      Employee pay should be directly related to productivity. Employees who exceed the call of duty receive higher annual allowances than employees who meet the minimum. The only way to continuously monitor the performance of exceptions is through the evaluation process. Regular one-on-one conversations about employees' performance on their jobs help them determine the year for those in different campuses.

    2. Track strengths and weaknesses

      The success of an organization does not depend on one person. Different employees can share their experiences and strengths and complete projects with minimal delay. Identifying the right candidates for the right team is an important part of successful management. The best way to get the right people is to track the strengths and weaknesses of each individual. Sequential grading makes this information readily available when distributing new issues.

    3. Identifying promotion candidates

      Hiring services from within the organization strengthens the organizational memory, which maintains the continuity of management style. Unfortunately, not every applicant has the skills needed to be promoted. Quarterly or even annually, this assessment allows hiring managers to look at the entire applicant's history and find the best internal candidate to promote.

    4. Offer feedback:

      Constructive criticism provides employees with the information they need to improve their work performance. Good managers give opinions that motivate employees to strive for betterment. Employees who are aware of performance expectations are better equipped to meet the challenges of excellence. By regularly giving employees feedback on their performance, managers open up communication channels, allowing for good working relationships and fostering a spirit of collaboration.

    5. Introducing training programs:

      Performance reviews provide an excellent time to discuss the need for additional training and continuing education. Professionals need to be up-to-date on industry best practices. The only way to make sure this is happening is to internally track the training and deliver the programs. Training programs not only help employees to keep up with new policies and procedures, but also help employees keep up with technology.

  3. What are the four key elements of a good performance appraisal?

    1. Be relevant

      Each element of the review must be relevant to the critical responsibilities that the job requires. Focus your attention on the things that matter most to get the job done, not the more secondary ones.

    2. Be consistent

      Find specific and measurable criteria. You want a process that gives consistent results regardless of who performs the assessment, and it applies appropriately to each employee.

    3. Be practical:

      The system should be able to operate without affecting other responsibilities in the business if your work performance testing is ineffective, if it takes so long that it negatively affects your other jobs. The temporal process may be more disturbing than its value, abandon it, and end the review process.

    4. Be open:

      Everyone involved in the review process, from the management to your human resource experts to the individual workers, should have a voice in the review process. You will help employees determine the standards on which they will be judged, because they understand better than anyone what they need to do their job.

  4. What are the Advantages of Performance Appraisal?

    1. A systematic performance evaluation system helps managers to correctly identify the performance of employees in a systematic way and their areas of talent and areas where they are lacking.

    2. It helps management to hire the right employees for the perfect job depending on their skills in a particular area.

    3. It helps employees identify areas where they need to improve. Managers can use this information to express constructive criticism of the way employees do their work.

    4. Prospective employees often receive promotions based on the results of promotion reviews. People with high marks get promotions. They can transfer or demote employees if they do not meet the expectations of managers.

    5. This creates healthy competition as employees seek to improve their performance and scores over their colleagues.

    6. Maintaining an extensive record of performance appraisals gives managers a better idea of what is the highest employee growth rate and what is lacking in performance.

  5. Who participates in the performance appraisal process?

    Generally the employee's supervisor leads the appraisal process. Other people — the human resources manager, coworkers, customers — may also be involved. A growing number of companies invite workers to review their supervisors to increase input and validity of appraisal results.

  6. What is the optimal outcome for performance management?

    In the performance management process the person should respond to what is being done well and what can be done well or differently. It is the basis for improved performance and overall professional development. The performance appraisal document is just one part of the performance management process, which begins with each manager setting specific goals and expectations for each employee to measure success on the job.

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