Performance appraisal is a system used by the management to evaluate the quality of an employee performance by determining their current past performance against set standards. It involves the creation of work standards, assesses the actual performance of an employee relative to the benchmarks and offering feedback to the employee for appropriate actions. Performance appraisal has become a valuable tool used by the administration to achieve collective goals. Feedback to the employees is crucial because it can motivate them to improve their performance or to eliminate any deficiencies identified in their performance. Several appraisal techniques are available for use by the human resource manager, and some of them include critical incidence, trait scales, narrative, and criteria based. Torence & Joyce, (2004) added other techniques like management by objectives, work planning and review, peer review and 360 appraisals. Organizations use different methods to assess the performance of their staff, and each has its advantages and disadvantages. Firms are finding it necessary to mix different techniques to come up with an appraisal system that can meet their needs. For the results of performance appraisal to be useful and reasonable to the management, it is desirable that the system consistently produces reliable and valid results (Findley, Giles & Mossholder, 2000).
Performance appraisal process
There are six steps of performance evaluation process; Establish performance standard involves setting up benchmarks that will be used as a base for comparing the actual performance of employees and criteria for judging the output of an employee is established. In most cases, employees can be successful or unsuccessful depending on the extent that they contributed to the goals and objectives of an organization. Such benchmarks must be clear, understandable and be in measurable terms. Care should be taken where the performance of an employee cannot be measured.
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The established standards need to be communicated to the entire organization to allow everyone to understand their responsibility and know the desired expectations. The administration should also forward the standards to the evaluators to prepare in advance for the evaluation. The management can alter the standards at this juncture if it is evident that there are identifiable issues that need to be corrected. Feedback from the employees is therefore crucial in modifying the standards (Price, 2013).
The next step that the company should do is to measure actual performance. It is one of the most challenging stages as it involves measuring the work that an employee did over a period. It is a continuous process that requires monitoring an employee’s performance in a year. It consists of the determination of the methods of measurement and ensuring that personal traits do not influence the outcome of the process. It should support rather than interfere with the employees' routine work. The next step involves comparing the obtained results with the established standards. Such comparison helps to identify any deviations from the norm. The results from the comparison can indicate that the actual performance is higher than the standard or it can be lower indicating a negative difference. This stage includes evaluating, and analyzing data by the performance of an employee (Price, 2013).
The final step in the process involves discussing the results with the concerned employees. Such encounters usually require a one to one discussion that focuses on communicating and listening. It means issues like the results the possible issues and solutions to such problems. The aim is to solve a problem and arrive at a consensus. Any feedback should be given with a positive attitude as it can affect an employee performance in future. Such feedback should be issued in a manner that the future of the employee is not changed. Managers should correct any mistakes by the employees in a constructive way while trying to motivate them to boost their morale and future performance. Feedback should be handled carefully to avoid any emotional outburst that can arise as a result of mishandling. The management should adequately prepare the employees psychologically before giving them such feedback. Managers must evaluate the nature of the input and the attitude of the employee before issuing any feedback (Price, 2013).
Factors that distort performance appraisal
According to Benedict & Levine, (1988), several factors distort performance appraisal. The writer recognized effective communication as a critical element in performance evaluation especially while communicating negative information. The authors add that the supervisors may also resort to distorting feedback by suppressing unfavorable information or even the performance evaluation of the subordinate. Six factors affect the assessment of employees. Some of the evaluators demonstrate leniency error by making different examinations, for example, high and low relative to the actual performance depending on the value system of such evaluators. Positive and negative errors as they are referred can overstate or understate the performance. Another problem is the Halo error in which all factors are rated high or low as a result of some specific element. Similarity errors arise when evaluators rate individuals, in the same manner, they perceive themselves. The evaluators project their perception to the employees. There are instances where an evaluator may not give realistic appraisal if they are aware that such an action could hurt the future of an employee by reducing the opportunity for promotion or even severe problems like a demotion. Some evaluators are prone to central tendency errors by continually rating all employees as average. Lastly, it is difficult to establish inappropriate substitutes for performance (Ohemeng Zakari & Adusah-Karikari, 2015)
Ohemeng Zakari & Adusah-Karikari, (2015) notes that performance appraisal helps in developing individuals, improve the performance of an organization, and feeds into the business plans. The writers further point out that the benefits of the system far outweigh the defects. The information gained can be used for administration and can lead to motivation.
There are difficulties in determining what constitutes good performance or a good job. Similarly, even the most straightforward tasks that can be measured using monetary values like sale are subject to external factors that are beyond the control of the sales team. In most cases, appraisals are made by performance substitutes which are selected well and given appropriate approximate of actual performance.
Appraisal processes when used appropriately have the potential to motivate the employees of a company. Employees will have emotional needs from such actions activating their behavior, therefore, realizing their full potential. It also drives individual internal forces hence boosting their acts in a definite direction. Goals induce employees to improve their performance while strengthening their commitment which in the end turns the strength into the continuation of needs. When employees are motivated, they are likely to have higher remuneration, handle more responsibility and receive more training, therefore, gaining more satisfaction (Selvarajan & Cloninger, 2012).
Managers should devise strategies that make meetings more meaningful. They should not demonstrate a controlling attitude towards employees or appear to please the employees. Managers must show leadership abilities while conducting meetings by taking control of them and moderating their progress. Similarly, they should demonstrate strong communication skills both verbally to avoid any form of miscommunication. Lastly, managers need to be open and articulate issues in an appropriate manner. They should not be seen as hiding some information from the junior employees (Kumar, 2012; (Selvarajan & Cloninger, 2012).
Employee training and development plans should be formulated when an organization identifies gaps that need to be filled. Training should only be conducted when the needs of all employees are known and therefore developing a training program that meets their requirements. The outcome of an employee appraisal process will be instrumental in advising the management on who train, the training program and content.
References
Benedict, M. E., & Levine, E. L. (1988). Delay and distortion: Tacit influences on performance appraisal effectiveness. Journal of Applied Psychology, 73 (3), 507-514. doi:10.1037/0021-9010.73.3.507
Findley, H. M., Giles, W. F., & Mossholder, K. W. (2000). Performance appraisal process and system facets: Relationships with contextual performance. Journal of Applied Psychology, 85 (4), 634-640. doi:10.1037/0021-9010.85.4.634
Kumar, S. (2012). Management by Objectives (MBO): A Tool of Performance Appraisal. Indian Journal of Public Administration, 58 (4), 749-756. doi:10.1177/0019556120120411
Ohemeng, F. L., Zakari, H. B., & Adusah-Karikari, A. (2015). Performance Appraisal and Its Use for Individual and Organisational Improvement in the Civil Service of Ghana: The Case of Much Ado about Nothing? Public Administration and Development, 35 (3), 179-191. doi:10.1002/pad.1718
Price, B. (2013). Preparing for your annual staff appraisal: part 2. Nursing Standard, 27 (21), 42-48. doi:10.7748/ns2013.01.27.21.42.e6337
Selvarajan, T. T., & Cloninger, P. A. (2012). Can performance appraisals motivate employees to improve performance? A Mexican study. The International Journal of Human Resource Management, 23 (15), 3063-3084. doi:10.1080/09585192.2011.637069
