Performance Appraisal: Tool of Performance Evaluation

People differ in their abilities ans aptitudes. These differences are natural to a great extent and cannot be eliminated even by giving the same basic education and training to them. Therefore it is necessary for management to know these differences so that the employees having better abilities may be awarded and wrong placement of employees may be rectified. Similarly, the the individual employee may also like to know the level of his performance in comparison to his colleagues so that he may improve upon it. Thus, there is a great need to have suitable performance appraisal system to measure the relative merit of each employee.

According to Hayel,”Performance Appraisal is the process of evaluating the performance and qualifications of the employees in terms of the requirement of the job for which he is employed, for purposes of administration including placement, selection for promotions, providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally.”

A recent survey of more than 2000 full-time employees by Adecco Staffing of North America found that half of the workers say managers take performance reviews seriously, and even fewer say they receive constructive feedback.

Performance Appraisal from employees point of view– ‘A performance appraisal is meant to help employees realise their strengths and shortcomings and receive a compensation accordingly.’

A Brazilian firm, Semco has 3000 employees, a turnover of over $200 million and has been growing at 20-30% every year. Semco does have managers but employees have more freedom than elsewhere. They can choose their hours of work, decide their salaries and pick up their bosses. Managers are anonymously evaluated every six months by their subordinates. Semco has practiced this philosophy for 25 years now.

Objectives of performance appraisal:

1. Providing feedback

2. Facilitates promotion decisions

3. Facilitating layoff or downsizing decisions: If promotions are what everybody wants, layoffs are what everybody wishes to avoid. But when economic realities force an organisation to downsize, performance appraisal makes sure that the most talented individuals are retained and to identify poor performers who affect the productivity of the organisation.

4. Encouraging performance improvement

5. Motivating superior performance

6. Setting and measuring goals

7. Counselling poor performance

8. Determining compensation changes

9. Supporting manpower planning

10. Determining Individual training and development needs

According to global paints and coatings major, Akzo Nobel India, appraisals are a continous process. “The HR team conducts workshops with managers before the mid year and year end cycle based on the performance and development dialogues process. The mid year review is not about ratings and but I geared at reviewing and providing guidance to the employees. The year end process, on the other hand, focuses more on self assessment and involves feedback by both primary and secondary reviewer,” said Sangeeta Pandey, director, HR, Akzo Nobel India.

Performance Appraisal thus is a systematic and objective way of judging the relative worth or ability of an employee in performing his task and is thus important for an organisation.

Click here for government certification in Human Resources