Performance Appraisal is one of the oldest and universal methods of management. It refers to all the formal procedures used in working organization to evaluate the contribution and personality of group members.
By this way, employees merit like initiative, dependability, personality etc. are compared with others and ranked or rated.
Purpose of Appraisal
1. Basis for jog change or promotion
2. To identify the strengths and weaknesses of an employee it serves as a guide for formulating a suitable training programme.
3. To serve as a feedback for employees, so that they can know how well they are working.
4. It works as an incentive to all employees
Factors Affecting Performance Appraisal
1. Enviornmental Constraints
2. Interdependence of Sub Systems
3. Organizational Structure
Performance Appraisal is usually end of three part series in an organization i.e. first comes Job Analysis, then Criterion Development And lastly Performance Appraisal.
There are various methods used in an organization to merit the performance of its employee and the methods vary for all levels. Like for Supervisors there is Labor Cost per unit of Output or Absenteeism Rate. On the same for Top managers the criteria is to see Return on Capital employed or Capacity utilization.
Basic appraisal methods that are used in an organization are Ranking method, Rating Scale, checklist, Field review, Essay Appraisal. A very popular technique of Performance Appraisal of Managers nowadays is MBO i.e. Management by Objectives. It is a process by which performance goals and objectives are set by each subordinate in collaboration with his superior at the start of appraisal period.
1. Halo Effect
2. Emphasis on Human Performance without regard for human values
3. Hypercritical or “Horns” Effect
5. Defensiveness of Employees
Although in day to day work the superior’s continuously appraises his subordinate work, the daily appraisal lacks summation and objectivity. Thus the frequency of appraisal must fit the purpose for which appraisal is done. For new employess more frequent appraisals are required.
Lastly one must evaluate the appraisal system properly. For doing so, a questionnaire study can be done for measuring the overall satisfaction with the existing appraisal system.The questins must be framed on various aspects of system and numbers should be marked on a six point scale from very high to very low.