The main goal of employee performance appraisal evaluation is twofold: to help

employees succeed in their professional development and to help your organization

achieve its overall goals.

Developing an effective employee performance appraisal system allows you to improve

employee performance, employee satisfaction, employee motivation and achieve
organizational goals and objectives. It is a great planning tool and communication tools
allowing feedback from both sides – the management and the employees.

While most organizations have employee performance appraisal once a year the approach
of developing effective employee performance appraisal system as an HR tool is a
continuous process throughout the year. This approach saves a lot of time and improves
the quality of employee performance appraisal. Many organizations use employee
performance appraisal forms and reports as a standard template used for evaluation once
a year. However this is not enough when you want to give accurate and unbiased
evaluation.

Objectives Of Performance appraisal:

• To review the performance of the employees over a given period of time.

• To judge the gap between the actual and the desired performance.

• To help the management in exercising organizational control.

• Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

• To diagnose the strengths and weaknesses of the individuals so as to identify the

training and development needs of the future.

• To provide feedback to the employees regarding their past performance.

• Provide information to assist in the other personal decisions in the organization.

 • Provide clarity of the expectations and responsibilities of the functions to be
performed by the employees.

• To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

• To reduce the grievances of the employees.

• Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

Performance Appraisal is an objective system to judge the ability of an individual

employee to perform his tasks. A good performance appraisal system should focus on the
individual and his development, besides helping him to achieve the desired performance.
This means that while the results are important the organization should also examine and
prepare its human capital to achieve this result. This holds true even for new inductees.

There is a strong linkage between induction, training and appraisal. In a large number of
firms worldwide, a new recruit is expected to discuss his schedule of work in achieving
his induction objective. This schedule of work becomes a part of his job for the next few
months.

Objectives of Appraisal
Almost all organizations practice performance appraisal in one form or another to achieve
certain objectives. These objectives may vary from organization to organization or even
within the same organization from time to time. It has been found that there are two
primary objectives behind the use of this methodology. One is to use it as an evaluation
system and second, to use it as a feedback system.

The aim of the evaluation system is to identify the performance gap. This means that it
helps determine the gap between the actual performance of the employee and that
required or desired by the organization.
The aim of the feedback system is to inform the employee about the quality of his work
or performance. This is an interactive process by which the employee can also speak
about his problems to his superior.

An effective performance appraisal system should emphasis individual objectives,

organizational objectives and also mutual objectives. From the viewpoint of individual
objective the performance appraisal should talk about

a) What task the individual is expected to do?

b) How well the individual has done the task?
c) How can his performance be further improved?
d) His reward for doing well.

From the organizational view point a performance appraisal should generate manpower
information, improve efficiency and effectiveness serve as a mechanism of control and
provide a rational compensation structure. In short the appraisal system establishes and
upholds the principle of accountability in the absence of which organization failure is the
only possible outcome.

Finally, talking about mutual goals, the emphasis is on growth and development,
harmony, effectiveness and profitability.

Methods of Performance Appraisal

In order to achieve the objectives, a variety of performance appraisal methods have been
developed. The choice of method depends on organizational ethos, its objectives, size,
product and technology.

The most traditional method is the Confidential Report method where the supervisor
makes an evaluation of his subordinate on the basis of certain characteristics like loyalty,
intelligence, conduct, character etc. In some other methods like Graphic Rating scale and
the Ranking Methods though the process is simple it is plagued with subjectivity. In the
Critical Incidents method a balance sheet of on-job-behavior for each employee is
generated which can then be used at the end of the year to see how well the employee has
performed.

Benefits of Performance Appraisal

For the appraisee

 Better understanding of his role in the organization—what is expected and what

needs to be done to meet those expectations
 Clear understanding of his strengths and weaknesses to develop himself into a
better performer in future
  Increased motivation, job satisfaction, and self-esteem
 Opportunity to discuss work problems and how they can be overcome
 Opportunity to discuss aspirations and any guidance, support or training needed to
fulfil those aspirations
 Improved working relationships with supervisors

Benefits of Performance Appraisal

For the Management

 Identification of performers and non-performers and their development

towards better performance
 Opportunity to prepare employees for assuming higher responsibilities

For the Management

 Opportunity to improve communication between the employees and management

 Identification of training and development needs
 Generation of ideas for improvements
 Better identification of potential and formulation of career plans

Benefits of Performance Appraisal

For the Organization

 Improved performance throughout the organization

 Creation of a culture of continuous improvement and success
 Conveying the message that people are valued

Performance Appraisal - Individual Evaluation Methods

Confidential report

 Essay evaluation
 Critical incidents
 Checklists
 Graphic rating scale
 Behaviorally anchored rating scale
 Forced choice method
 MBO

Performance Appraisal - Multiple Person Evaluation Methods

 Ranking
 Paired comparison
  Forced distribution

Other methods

 Performance tests
 Field review technique