Performance appraisal is the systematic evaluation and analysis of the employees with respect to their job and the potential for the development of their skills and career ( Daoanis , 2012). In other words, performance appraisal is the process of measuring the productivity in terms of efficiency and effectiveness. Performance appraisal is essential activity in an organization and it serves various purposes in the organization. The first major purpose of the performance appraisal is an evaluation. Performance appraisal is useful in helping the organization evaluate the performance of the employees and determine how well each employee has performed. It helps keep the record of the employees’ performance and the efforts made towards the achievement of the organizational goals. Another major purpose of the performance appraisal is to provide continuous feedback to the employees about their performance and achievements so that they know areas that require improvements. Performance appraisal is also useful in the development of the employees as it helps the organization to identify the training and development needs of the employees. Performance appraisal does this by not only determining the weak points of the employees but also abolishing them. This is done by training and developing the employees in areas that they are weak so that they can improve their performance. The promotion of the employees also relies on the results of the performance appraisal. Employees with good performance records are promoted to motivate them towards working hard for the goals of the organization ( Cascio, 2018 ).
Performance appraisal system has various components that must be accommodated to make it be effective. The first component is the goal setting and job expectation. In the job expectations, employees are given responsibilities which they are required to accomplish within a given time frame. These goals are what the employees will be evaluated on to measure the extent to which they have accomplished their goals and expectations. Another component of the performance appraisal system is the learning and development of the employees. Once the goals are set and the employees are aware of what is expected of them, the management must train the employees on their job areas so that their skills can be improved. The management then needs to set the expected performance standards that are expected of each employee. The performance standards are the benchmarks that are used by the managers to rate the performance of the employees. This is done by measuring what the employee has achieved against what was in the standards. The next component is to train the managers and the supervisors on how to conduct a performance appraisal. This can be helpful in ensuring the success of the performance appraisal program that is to be implemented. This is then followed by ensuring that the employees receive a continuous feedback and coaching on their performance so that they continuously improve. The employees should have specific job description so that they know and understand what is required of them at all times.
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For the successful implementation of a performance appraisal program, accountability is essential at all levels starting with the top management. The senior management team must demonstrate the highest degree of accountability in the organization so that they act as a role model for the rest of the organization members. The next level of accountability should be on the supervisors and the raters who evaluate the employees. There should be accuracy in evaluating the performance of the employees. The managers should be held accountable for their role in the employee evaluation and rating, and they must ensure that the ratings are accurate. At the same time, the employees need to be held responsible for their performance. This can be done by rewarding those employees who emerge as best performers in the performance appraisal results. Those who perform below the expectations should be encouraged to improve their performance. Developing a culture of accountability in an organization will lead to improved performance, more creativity and innovation as well as boosted morale among the employees.
Performance appraisal systems have certain advantages and disadvantages to the organization as well as the employees. The first advantage is that performance appraisal creates an opportunity for the identification of the deficiencies in the employee performance and the room correction ( Aggarwal& Thakur , 2013). This helps improve the performance of the employees. Also, performance appraisal is useful in the career growth and the development of the employees. This happens by determining the need for employee development which then leads to career development. It also provides for the documentation of the employees’ performance over a given period of time. Furthermore, performance appraisal provides continuous feedback to the employees which is essential for the employee development and morale building. Performance appraisal is also essential in helping the employees understand what is expected of them in their responsibilities and this makes them improve their performance which leads to high productivity.
However, certain disadvantages arise from performance appraisal. The first disadvantage is that it is time-consuming as managers and supervisors are expected to spend much time evaluating the employees ( Dusterhoff, Cunningham & MacGregor , 2014). It may also be subjected to bias which could negatively impact on the morale of the employees. Sampling errors may also arise from the process leading to wrong evaluation and analysis. At the same time, if the performance appraisal system is not properly managed, it might lead to employee discouragement, this is especially for the employees who will score poor on evaluation when in their mind they believe that they have been putting a lot of efforts in their work.
References
Daoanis, L. E. (2012). Performance Appraisal System: It’s Implication to Employee Performance. International Journal of Economics and Management Sciences , 2 (3), 55-62.
Cascio, W. (2018). Managing human resources . McGraw-Hill Education.
Aggarwal, A., & Thakur, G. S. M. (2013). Techniques of performance appraisal-a review. International Journal of Engineering and Advanced Technology (IJEAT) , 2 (3), 617-621.
Dusterhoff, C., Cunningham, J. B., & MacGregor, J. N. (2014). The effects of performance rating, leader–member exchange, perceived utility, and organizational justice on performance appraisal satisfaction: Applying a moral judgment perspective. Journal of business ethics , 119 (2), 265-273.
