A performance appraisal is a systematic and periodic process that assesses an individual employee’s job performance and productivity in relation to certain pre-established criteria and organizational objectives. Historically, performance Appraisal has been conducted annually (long-cycle appraisals), however many companies are moving towards shorter cycles (every six months, every quarter), and some have been moving into short-cycle (weekly, bi-weekly) appraisals. PA is often included in performance management systems.
PA helps the subordinate answer two key questions; first, “What are your expectations of me? second, “How am I doing to meet your expectations? ” Performance management systems are employed “to manage and align” all of an organization’s resources in order to achieve highest possible performance.
How performance is managed in an organization determines to a large extent the success or failure of the organization.
Therefore, improving PA for everyone should be among the highest priorities of contemporary organizations. A central reason for the utilization of performance appraisals is performance improvement initially at the level of the individual employee, and ultimately at the level of the organization.
Other fundamental reasons include “as a basis for employment decisions (e. g. promotions, terminations, transfers), as criteria in research (e. g. test validation), to aid with communication to establish personal objectives for training programs, for transmission of objective feedback for personal development as a means of documentation to aid in keeping track of decisions and legal requirements and in wage and salary administration. Additionally, PAs can aid in the formulation of job criteria and selection of individuals “who are best suited to perform the required organizational tasks”.
A PA can be part of guiding and monitoring employee career development. PAs can also be used to aid in work motivation through the use of reward systems. The latest mantra being followed by organizations across the world being – “get paid according to what you contribute” – the focus of the organizations is turning to performance management and specifically to individual performance. If the process of performance appraisals is formal and properly structured, it helps the employees to clearly understand their roles and responsibilities and give direction to the individual’s performance. Potential benefits PAs can benefit an organization’s effectiveness. One way is PAs can often lead to giving individual workers feedback about their job performance. From this may spawn several potential benefits such as the individual workers becoming more productivity.
Other potential benefits include: * Facilitation of communication: communication in organizations is considered an essential function of worker motivation. It has been proposed that feedback from PAs aid in minimizing employees’ perceptions of uncertainty. Fundamentally, feedback and management-employee communication can serve as a guide in job performance. Enhancement of employee focus through promoting trust: behaviors, thoughts, or issues may distract employees from their work, and trust issues may be among these distracting factors. Such factors that consume psychological energy can lower job performance and cause workers to lose sight of organizational goals. Properly constructed and utilized PAs have the ability to lower distracting factors and encourage trust within the organization. * Goal setting and desired performance: PAs provide room for discussion in the collaboration of these individual and organizational goals.
Collaboration can also be advantageous by resulting in employee acceptance and satisfaction of appraisal results. * Performance improvement: well constructed PAs can be valuable tools for communication with employees as pertaining to how their job performance stands with organizational expectations. “At the organizational level, numerous studies have reported positive relationships between human resource management (HRM) practices” and performance improvement at both the individual and organizational levels. Determination of training needs: PAs can especially be instrumental for identifying training needs of new employees. Finally, PAs can help in the establishment and supervision of employees’ career goals. Potential complications Despite all the potential advantages of formal performance appraisals (PAs), there are also potential drawbacks they are: * Detrimental to quality improvement: it has been proposed that the use of PA systems in organizations adversely affect organizations’ pursuits of quality performance.
It is believed by some scholars and practitioners that the use of PAs is more than unnecessary if there is total quality management. * Negative perceptions: “Quite often, individuals have negative perceptions of PAs”. Receiving or the anticipation of receiving a PA can be uncomfortable and distressful and potentially cause “tension between supervisors and subordinates”. If the person being appraised does not trust their employer, appraiser or believe that they will benefit from the process it may become a “tick box” exercise. Errors: PAs should provide accurate and relevant ratings of an employee’s performance as compared to pre-established criteria/goals Nevertheless, supervisors will sometimes rate employees more favorably than that of their true performance in order to please the employees and avoid conflict. * Legal issues: when PAs are not carried out appropriately, legal issues could result that place the organization at risk. PAs are used in organizational disciplinary programs as well as for promotional decisions within the organization.
The improper application and utilization of PAs can affect employees negatively and lead to legal action against the organization. The most significant reasons of using Performance appraisal are: * Making payroll and compensation decisions * Training and development needs * Identifying the gaps in desired and actual performance and its cause * Deciding future goals and course of action * Promotions, demotions and transfers * Other purposes (including job analysis and providing superior support, assistance and counseling) Human resource management & performance management Human resource management (HRM) conducts performance management.
Performance management systems consist of the activities and processes embraced by an organization in anticipation of improving employee performance, and therefore, organizational performance. Consequently, performance management is conducted at the organizational level and the individual level. At the organizational level, performance management oversees organizational performance and compares present performance with organizational performance goals. The achievement of these organizational performance goals depends on the performance of the individual organizational members.
Therefore, easuring individual employee performance can prove to be a valuable performance management process for the purposes of HRM and for the organization. Many researchers would argue that “performance appraisal is one of the most important processes in Human Resource Management”. Methods of collecting data There are three main methods used to collect performance appraisal (PA) data they are Objective production The objective production method consists of direct, but limited, measures such as sales figures, production numbers, the electronic performance monitoring of data entry workers, etc. 6]
The measures used to appraise performance would depend on the job and its duties. Personnel The personnel method is the recording of withdrawal behaviors (i. e. absenteeism, accidents). Most organizations consider unexcused absences to be indicators of poor job performance, even with all other factors being equal; however, this is subject to criterion deficiency. The quantity of an employee’s absences does not reflect how dedicated he/she may be to the job and its duties.
Especially for blue-collar jobs, accidents can often be a useful indicator of poor job performance, but this is also subject to criterion contamination because situational factors also contribute to accidents. Judgmental evaluation Judgmental evaluation appears to be a collection of methods, and as such, could be considered a methodology. Judgmental evaluations are the most commonly used with a large variety of evaluation methods The main methods used in judgmental performance appraisal are: * Graphic Rating Scale: Graphic rating scales are the most commonly used system in PA.
On several different factors, subordinates are judged on ‘how much’ of that factor or trait they possess. Typically, the raters use a 5- or 7-point scale; however, there are as many as 20-point scales. * Employee-Comparison Methods: rather than subordinates being judged against pre-established criteria, they are compared with one another. This method eliminates central tendency and errors. The rank-order method has raters ranking subordinates from “best” to “worst”, but how truly good or bad one is on a performance dimension would be unknown.
The paired-comparison method requires the rater to select the two “best” subordinates out of a group on each dimension then rank individuals according to the number of times each subordinate was selected as one of the “best”. * Behavioral Checklists and Scales: behaviors are more definite than traits. The critical incidents method concerns “specific behaviors indicative of good or bad job performance”. Supervisors record behaviors of what they judge to be job performance relevant, and they keep a running tally of good and bad behaviors. Performance appraisal interviews
The performance appraisal (PA) interview is typically the final step of the appraisal process. The interview is held between the subordinate and supervisor. The PA interview can be considered of great significance to an organization’s PA system. It is most advantageous when both the superior and subordinate participate in the interview discussion and establish goals together. Three factors consistently contribute to effective PA interviews: the supervisor’s knowledge of the subordinate’s job and performance in it, the supervisor’s support of the subordinate, and a welcoming of the subordinate’s participation.