Performance appraisal are considered to be the vital tool, to measure the performance of an employee and use the information collected, to optimize the resource of individuals in an organization. It is systematic evaluation of individuals with respect to their task performance and their potential for development individually and collectively. It refers to the assessments of an employee’s actual performance, behaviour on jobs and his/her potential for further performance. The main purposes of appraisal are to assess training need to effect promotion and to give high pay.
We may say that appraising the performance of an individual has been known as merit rating, but in recent years, we may closure different terminologies have been used to denote this process such as performance appraisal, performance review, performance evaluation, employee appraisal, progress appraisal report, personal preview and so on.
Following methods are widely used in Performance Appraisal.
1. Forced-Choice Rating
This technique was developed to reduce bias and establish objective standards of comparison between individuals, but it does not involve the intervention of a third party. Although there are many variations of this method, the most common one asks raters to choose from among groups of statements those which best fit the individual being rated and those those which least fit him. The statements are then weighted or scored, very much the way a psychological test is scored. People with high scores are, by definition, the better employees; those with low scores are the poorer ones. Since the rater does not know what the scoring weights for each statement are, in theory at least, he cannot play favorites. He simply describes his people, and someone in the personnel department applies the scoring weights to determine who gets the best rating.
The rationale behind this technique is difficult to fault. It is the same rationale used in developing selection test batteries. In practice, however, the forced choice methods tend to irritate raters, who feel they are not being trusted. They want to say openly how they rate someone and not be second-guessed or tricked into making “honest” appraisals.
2. Field Review
When there is reason to suspect rater bias, when some raters appear to be using higher standards than others, or when comparability of ratings is essential, essay or graphic ratings are often combined with a systematic review process. The field review is one of several techniques for doing this. A member of the personnel or central administrative staff meets with small groups of raters from each supervisory unit and goes over each employee’s rating with them to (a) identify areas of inter-rater disagreement, (b) help the group arrive at a consensus, and (c) determine that each rater conceives the standards similarly.
This group-judgment technique tends to be fairer and more valid then individual ratings and permits the central staff to develop an awareness of the varying degrees of leniency or severity-as well as bias- exhibited by raters in different departments. On the negative side, the process is very time consuming.
3. Essay Appraisal
In its simplest form, this technique asks the rater to write a paragraph or more covering an individual’s strengths, weaknesses, potential, and so on. In most selection situations, particularly those former employers, teachers, or associates carry significant weight. The assumptions seems to be that an honest and informed statement –either by word of mouth or in writing form someone who knows a man well, is fully as valid as more formal and more complicated methods.
The biggest drawback to essay appraisals is their variability in length and content. Moreover, since different essays touch on different aspects of a mans performance or personal qualifications, essay ratings are difficult to combine or compare. For comparability, some type of more formal method, like the graphic rating scale, is desirable.
4. Management By Objectives
To avoid, or to deal with, the feeling that they are being judged by unfairly high standards, employees in some organizations are being asked to set-or help set-their own performance goals. Within the last five or six years, MBO has become something of a fad and is so familiar to most managers that I will not dwell on it here.
It should be noted, however, that when MBO is applied at lower organizational levels, employees do not always want to be involved in their own goal setting. As Arthur N. Turner and Paul R. Lawrence discovered, many do not want self-direction or autonomy. As a result, more coercive variations of MBO drifting into a kind of manipulative form of management in which pseudo-participation substitutes for the real thing. Employees are consulted, but management ends up imposing its standards and its objectives.
Some organizations, therefore, are introducing a work-standards approach to goal setting in which management openly sets the goals. In fact, there appears to be something of a vogue in the setting of such work standards in white-collar and service areas.
5. Assessment Centers
So far, we have been talking about assessing past performance. What about the assessment of future performance or potential? In any placement decision and even more so in promotion decisions, some prediction of future performance is necessary. How can this kind of prediction be made most validly and most fairly?
One widely used rule of thumb is that “what a man has done is the best predictor of what he will do in the future”. But suppose you are picking a man to be a supervisor and this person has never held supervisory responsibility? Or suppose you are selecting a man for a job from among a group of candidates, none of who has done the job or one like it? In these situation, many organizations use assessment centers to predict future performance more accurately.
Typically, individuals from different departments are brought together to spend two or three days working on individual and group assignments similar to the ones they will be handling if they are promoted. The pooled judgment of observers – sometimes derived by paired comparison or alternation ranking – leads to an order –of-merit ranking for each participant. Less structured, subjective judgment is also made.
There are good deals of evidence that people chosen by assessment center methods work out better than those not chosen by these methods. The center also makes it possible for people who are working for departments of low status or low visibility in an organization to become visible and, in the competitive situation of an assessment center, show how they stack up against people from better-known departments. This has the effect of equalizing opportunity, improving morale, and enlarging the pool of possible promotion candidates.
6. Graphic Rating Scale
This method is more consistent and reliable. Typically, a graphic scale assesses a person on the quality and quantity of his work and on a variety of other factors that vary with the job but usually include personal traits like reliability and cooperation. It may also include specific performance items like oral and written communication.
The graphic scale has come under frequent attack, but remains the most widely used rating method. In a classic comparison between the “old-fashioned” graphic scale and the much more sophisticated force-choices technique, the former proved to be fully as valid as the best of the forced-choice forms, and better than most of them. It is also cheaper to develop and more acceptable to raters than the forced-choice form. For many purposes there is no need to use anything more complicated than a graphic scale supplement by a few essay questions.
7. Ranking Mathods
For comparative purposes, particularly when it is necessary to compare people who work for different supervisors, individual statements, ratings, or appraisal forms are not particularly useful. Instead, it is necessary to recognize that comparisons involve an overall subjective judgment to which a host of additional facts and impressions must somehow be added. There is no single form or way to do this.
- Alternation ranking: In this method, the names of employees are listed on the left-hand side of the sheet of paper – preferably in random order. If the rankings are for salary purposes, a supervisor is asked to choose the “most valuable” employee on the list, cross his name off, and put it at the top of the column on the right-hand side of the sheet. Next, he selects the “least valuable” employee on the list, cross his name off, and puts it at the bottom of the right-hand column. The ranker then selects the most valuable person from the remaining list, crosses his name off and enters it below the top name on the right-hand list, and so on.
- Paired – comparison ranking: This technique is probably just as accurate as alternation ranking and might be more so. But with large numbers of employees it becomes extremely time consuming and cumbersome.
Certain techniques in performance appraisal have been thoroughly investigated, and some have been found to yield better results than others.
Research studies show that employees are likely to feel more satisfied with their appraisal result if they have the chance to talk freely and discuss their performance. It is also more likely that such employees will be better able to meet future performance goals. Employees are also more likely to feel that the appraisal process is fair if they are given a chance to talk about their performance. This especially so when they are permitted to challenge and appeal against their evaluation.
It is very important that employees recognize that negative appraisal feedback is provided with a constructive intention, i.e., to help them overcome present difficulties and to improve their future performance. Employees will be less anxious about criticism, and more likely to find it useful, when the believe that the appraiser’s intentions are helpful and constructive. In contrast, other studies have reported that “destructive criticism” – which is vague, ill-informed, unfair or harshly presented – will lead to problems such as anger, resentment, tension and workplace conflict, as well as increased resistance to improvement, denial of problems, and poorer performance.
Set Performance Goals
It has been shown in numerous studies that goal setting is an important element in employee motivation. Goals can stimulate employee effort, focus attention, increase persistence, and encourage employees to find new and better ways to work. The useful of goals as a stimulus to human motivation is one of the best-supported theories in management. It is also quite clear that goals which are “…specific, difficult and accepted by employees will lead to higher levels of performance than easy, vague goals (such as do your best) or no goals at all.
It is important that the appraiser (usually the employee’s supervisor) be well informed and credible. Appraisers should feel comfortable with the techniques of appraisal, and should be knowledgeable about the employee’s job and performance. When these conditions exist, employees are more likely to view the appraisal process as accurate and fair. They also express more acceptances of the appraiser’s feedback and a greater willingness to change.