Performance Appraisal (PA)

Definition

Ø  structural process of interaction between subordinates and superior which usually takes the form of periodic interview ( semiannual or annual), in which the performance of the subordinates  examined and discussed, with the view to identifying weakness and strengths and opportunities for improvement and skills development.

Ø  It is system whereby employee’s effort over the course of a period of time are recognized and reviewed. A successful performance appraisal  system (PAS) is a set of performance measures (i.e. a metric used to quantify the efficiency and effectiveness of action) that provides a company with useful information that helps to manage, control, plan and perform the activities undertaken in the company (Stefan, 2005)

Characteristics of Performance Appraisal:

The main characteristics of performance appraisal are the following:

Ø  It systematic process, it tries to evaluate performance in the same manner using  the same  approach a number of steps are followed to evaluate an employee’s strengths and weaknesses.

Ø  It provides an objective description of employee’s jobs relevant strengths and weaknesses.

Ø  It tries to find out how will the employee is performing the job and tries to establish a plan for further improvement.

The Objectives of Performance Appraisal:

Ø  Compensation decisions, it can serve as a basis for pay raises. This approach to compensation is at the heart of the idea that raises should be given for merit rather than for seniority. Under merit systems, employee receives raises based on performance.

Ø  Promotion decisions, it can serve as a useful basis for change or promotion. When merit is the basis for reward, the person doing the best job receives the promotion.

Ø  Training and development programs, it can serve as a guide formulating   a suitable training and development program. Performance appraisal can inform employees about their progresses and tell them what skills they need to develop to become eligible for pay raises or promotions or both.

Ø  Feedback, performance appraisal enables the employee to know how well he is doing on the job, it tells him what he can do improve his present performance and go up the organizational ladder.

Ø  Personal development, performance appraisal can help to reveal the causes of good and poor employee’s performance. Through discussions with individual employees, a line manager can find out why they perform as they do and what steps can be intended to improve their performance

The Processes of Performance Appraisal:

ž  The performance appraisal is planned, developed and implemented through series of steps.

ž  Establish performance standard, performance appraisal systems require performance standard, which serve as benchmarks against which performance is measured. To be useful standards should relate to the desired results of each job.

ž  Communicate the standards, PA involves at least two parties the appraiser who does appraisal and appraise whose performance is being evaluated.

ž  Measure actual performance, this requires the use of dependable performance measures, the ratings used to evaluate performance. Performance measures to be useful must be easy to use, be reliable and report on the critical behaviors that determine performance.

ž  Compare actual performance with standards and discuss appraisal, actual performance may be better than expected and some times it may go off the track. Whatever the consequences, there is a way to communicate and discuss the final outcome.

ž  Taking corrective action, if necessary, corrective action is of two types, one which puts out the fires immediately, and other one which strikes as root of the problem permanently.

The Methods of Performance Appraisal:

Essay appraisal method

Ø  This traditional form of appraisal, it involves description of performance of an employee by his superior

Ø  Straight ranking method, in this method the appraiser ranks the employees from the best the poorest on the basis of their overall performance. It is quite useful a comparative evaluation

Checklist method

Ø  The rate is given checklist of the descriptions of the behaviors of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of employees.

Graphic rating method scale

Ø  In this methods an employee’s quality and quantity of work is  assessed in graphic scale indicating different degrees of a particular trait. Based on characteristics related to the on the job performance of employees.

Behaviorally anchored rating scales

Ø  It is combinations of rating scale and critical incident techniques of employee performance evaluation. The rating forms contains six to eight specifically defined performance dimensions.

Critical incidents technique (CIT)

Ø  This to identify those factors that are critical to success or failure of individuals or systems in a given setting. People with first- hand experience (e.g. factory supervisors) are asked to describe incidents in which behavior or other factors had a critical effect.

360 Degree feedback ( 360 degree review)

Ø    It includes self ratings, peer review, and upward assessments. Feedback is sought from every one, it gives people a chance to know how they are seen by others to see they are skills and style and may improve communications between people   

The Challenges of Performance Appraisal:

The main performance appraisal challenges are

Ø  Determining the evaluation criteria.  This is challenge faces top management, most of the criteria selected are not quantified or measurable terms e.g. behavior.

Ø  Create rating instrument. The process of PA should judge the performance of the employees rather than employees them.

Ø  Lack of competence. Most of the raters lack of necessary skills and knowledge in performance appraisal.

Ø   Poor appraisal forms, the appraisal process might also be influenced by the following factors relating to the forms that are used by raters , rating scale may be quit vague and unclear, may ignore important aspect of job performance, may long and complex

Ø   Resistance, this from employees and trade union for the fear of negative rating.

Ø  Lack of rater preparedness. The raters are not adequately trained to carry out performance management activities.

Ø  Performance judgment error. People commit mistakes while evaluating people and their performance. Biases and judgment errors of various kinds may spoil the show.