The performance appraisal system forms a significant basis for every organization since it assists in resolving many issues such as employee motivation, increasing productivity and in making major decisions that have important bearing on the over all well being of the organization. This project has been developed in highlighting the meaningful purpose of the performance appraisal and feedback systems.
Performance appraisal (PA) is amongst the most vital constituents of human resource management. The concept entails the gathering of information which is immensely helpful in effectively guiding recruitment procedures, selecting workers, training and development of existing staff, and in the motivation and maintenance of the work force in a way that workers feel adequately rewarded for their efforts. Unless there is a dependable system of performance appraisal, the human resource management cannot be well sustained and will eventually disintegrate, leading to improper utilization of the company’s human resources and ultimately to wastage of efforts and poor performance by the organization.
Evaluation and development of employees are the two basic purposes of performance appraisal. Evaluation enables the management to acquaint employees about their current performance in relation to their job portfolios. In evaluating employees on the basis of performance appraisals, the management is well placed in rewarding employees that perform very well and to take punitive action against those that are poor performers. Performance appraisals enable the identification of problems faced by employees which further paves the way for alleviating the difficulties, thus resulting in professional development which eventually benefits the company in terms of better employee performance. The performance data can be utilized in identifying the weak areas of individual employees and to train them to imbibe better skills.
Performance appraisal can be defined as a system whereby employee performance within the organization is measured and reviewed on a regular basis. It can also be taken as a system whereby the career development of the employee is considered in employing different techniques that allow the evaluation of workers in terms of parameters such as quality of work, amount of work done, cost to the organization and the cost incurred for each employee. (www.wik.)
Performance appraisals are usually done on an annual basis for all employees in the organization. Every employee is reported upon through the performance appraisal by the employee’s immediate supervisor or manager. All levels of employees, whether subordinate or managerial, are evaluated in terms of the performance appraisal. Even Directors are appraised by the CEO of the company who is in turn evaluated by the chairman or owners of the organization. (www.bus.)
The importance of Performance Appraisal
Performance appraisal is considered as a vital process in the evaluation and documentation of staff performances which further enables the management to take appropriate decisions. Performance appraisal is important as a system that entails different interactive processes whereby all employees are involved in varying degrees to determine job expectation, job evaluations, selection of efficient appraisal methods, development of assessment tools and practices and the collection, interpretation and reporting of evaluation outcomes.
One can best understand the purpose of performance appraisal policy by grasping the advantages that the system enables for the organization.
- Provides feedback about performance of workers.
- Identifies the training requirements of employees.
- Organizational rewards can be given to employees on the basis of performance as recorded in performance appraisals.
- Forms a strong basis for making decisions in personnel matters such as increase in salaries, promotion and taking punitive departmental actions.
- Provides opportunities to diagnose and develop the organization.
- Facilitates healthy communication amongst employees and administrators.
- Validates the procedures of selection and other human resource procedures in meeting the requirement of the Federal Equal Employment Opportunities.
All these objectives can be achieved if employers make attempts in establishing performance appraisal systems so that healthy dialogue is encouraged between the different parties which would eventually result in the over all benefit to the organization. In order to arrive at such a situation and to consistently keep up with the given structure, management has to motivate employees by conveying to them about the immense value the company has for them. The management is duty bound to establish a reputation of giving impartial and sincere feedback, be fair in treating all employees equally, and seek the willing support of employees in terms of their opinion about the procedures and operative systems of the organization.
Performance appraisals methods
There are varied methods of performance appraisal and the following are some of its procedures and systems:
The Critical Incidents File
The critical incidents file pertains to a performance appraisal procedure whereby the positive and negative aspects of an employee’s performance attributes during the period of evaluation are written down in a document. The critical incidents file is a record that is very useful in determining the accomplishments of employees in order to decide the rewards and other benefits and incentives to be given to employees.
The Rating Scale
The rating scale is a part of the performance appraisal form in which the supervisor objectively indicates the worker’s performance levels by ticking the appropriate choices that fit the performance and attitude of the worker. The rating scale addresses the need to evaluate employee attributes such as amount of work done, standard of work done, to what extent the employee is dependent, his or her judgment levels, attitude, ability to take initiative and how much he or she cooperates with others.
Behaviourally Anchored Rating Scales (BARS)
BARS is a performance appraisal procedure that combines behaviourally attributed rating processes and critical incidents. The method is considered to be more objective and specific as compared to other methods that are used separately. Instead of having provisions to rate employees as average, good or excellent, this method allows for the employee’s performance to be exhaustively and specifically described by enabling the reporting officer to choose from several statements that most closely relate to the particular employee’s performance levels for the given tasks. Under the system, the working standard of an employee is considered to be good if the BARS are well developed.
Ranking in performance appraisal systems is used in evaluating the worker’s accomplishments on a scale that varies from the best to the worst. In this method, the manager or supervisor is required to rank the given employee with other employees instead of judging him from a given set of performance standards. The forced distribution method is a derivative of the ranking method, which resembles grading by way of a curve. Employees are placed in prearranged performance categories; such as 5% could be categorized as excellent, 15% as above average, 40% as average, 15% as below average and 5% as poor.
Management by Objectives (MBO)
Management by Objectives (MBO) is a procedure whereby supervisors and employees together set objectives, the employee’s performance is evaluated periodically and the rewards are decided in keeping with the achievement of employees.
The Narrative Method
As per the narrative method the manager is required to narrate exhaustively in writing about the performance level of the employee. Under the system the options are flexible in that managers have the freedom to use whatever style they wish to use in terms of appraising the employee. They could also be required to respond to specific queries about employee performance. This method works more efficiently if it is combined with the use of another method of performance appraisal.
Which Performance Appraisal Method Is the Best?
No single appraisal method can be judged as the best since the objectives of different systems vary. Mostly organizations rely on using a combined strategy of different methods to reveal a reliable picture of employee performance. If the objective is developmental in nature, the combined use of critical incidents and MBO will be very beneficial. When decisions from the administrative perspective are to be taken, the best option is to use the ranking method by utilizing rating scales or BARS. However the real purpose of performance appraisal systems is not fulfilled by using a single approach; instead it depends on the methods and forms used by managers in utilizing their human relations abilities.
Ways to Measure Employee Performance
There are a number of areas which require the measurement of employee performance. An effective performance appraisal system should be able to measure the extent to which the employee understands the goals of his organization and his or her strategy to achieve and participate in them. However, there are very less organizations in the UAE that are clear about defining the parameters that they wish to measure.
Some of the general performance indicators are as under:
- Quantitative measure: the number of units produced or products and services made.
- Qualitative measure: the quality and standard of work performed by the employee.
- Timeliness/Punctuality: time taken to perform the given work.
- Absenteeism: extent of absenteeism.
- Creativeness: the creation of innovative methods to improve working results.
- Observance to given policies: the extent to which the employee follows the given instructions.
- Personal Presentation: whether dressed professionally.
- 9. 360-Degree or “Full-Circle” Appraisal: performance appraisal on the basis of speaking to all who interact with the employee to judge his over all personality.
- MBO (Management by Objectives): The extent of achievements of objective and goals set in consultation with his/her official superiors.
The basic objective of the feedback procedure is to let the employee know about the standard of his or her work performance, as also to receive feedback from employees about problems they face at the work place.
It is important for employees to receive a true picture of their performance standards by way of constructive feedback. Negative feedback is also considered constructive since it makes him or her to realise shortcomings which can be removed if efforts are made in the right directions; which otherwise would not have been possible if the feedback was not given. Under such conditions employees will not feel bad about criticism and they will receive the negative feedback on a positive note.
Feedback is considered destructive if it is not specific. Such practices makes employees disgruntled since the criticism if any is not specific and does not address specific shortcomings. Simply directing an employee with the remark do your best is not justified and will create complications by way of employee resentment, conflict and the unwillingness to change.
Goal setting is a vital part of employee motivation. If goals are specific and confront employees with a challenging environment, their interest gets stimulated and they will themselves take initiatives to find better ways to achieve organizational goals.
Conflicts and Techniques to Avoid It
High level of skills and sensitivity are required to deal with employees during feedback and appraisal sessions. Certain feedback may annoy or hurt some employees who would then become defiant and resist efforts to improve, thus resulting in further deterioration in their performance levels. It is hence necessary that appraisers also be trained in the required techniques so that they can be constructive in encouraging employees to relate with their performance issues and avoid unpleasant instances at the work place. Employees should not be criticized directly but should be made to realize their shortcomings by presenting before them the relevant evidence which will substantiate the scope for improvement.