One of the most important things to remember about performance appraisals is that its effectiveness will be highly influenced by its purpose. For example, a programme, which is developed, to focus on employee development and training needs may not be suitable for making major decisions about salaries. Likewise, it is possible that the organization, management and employee may all have different goals for the performance appraisal process. Performance appraisal involves ‘identifying, evaluating and developing employees’ work performance with the dual purpose of achieving the organization’s goals and objectives whilst also ensuring the employee receives recognition, feedback and development’.
The process of performance appraisal starts with employee planning and ends with an evaluation of employee progress. The process of performance appraisal consists broadly two steps. First, complete the performance appraisal form; secondly, participate in a performance appraisal interview and discussion. These two sages comprise the following levels in the appraising performance of the staff.
- Establish Performance Standards or Goals – The appraisal process begins with the establishment of performance standards. The evaluators must determine what outputs, accomplishments and skills will be evaluated. These standards should have evolved out of job analysis and job description. These performance standards should be clear and objectives are to be understood and measured.
- Communicate Performance Expectations to Employees – Once the performance standards are established, these need to be communicated to the respective employees so that they come to know what expected of them. Past experience indicates that not communicating standards to the employees compounds the appraisal problems. Here, it must be noted that mere transference of information from the evaluator to the staff is not communication. It become communication only when the transference of information has taken place and has been received and understood by the staff. The feedback from the staff on the standards communicated to them must be obtained. If required, the standards may be modified or revised in the light of feedback obtained from the employees.
- Measure Actual Performance – This is the third step involved in the appraisal process. In this stage, the actual performance of the employees is measured on the basis of information available from various sources such as personal observation, statistical reports, oral reports, and written reports. The evaluator’s feeling should not influence the performance measurements of the staff. Measurement must be objective based on facts and findings. This is because what we measure is more critical and important to the evaluation process than bow we measure.
- Compare Actual Performance with Standards – In this stage, the actual performance is compared with the predetermined standards. Such a comparison may reveal the deviation between standard performance and actual performance and will enable the evaluator to proceed to the fifth step on the process i.e. Review and discussion of the appraisal with the concerned staff.
- Discuss and Review the Appraisal with the Staff – The fifth step in the appraisal process is to communicate to and discuss with the employees the results of the appraisal. This is one of the most challenging tasks the evaluatorsface to present an accurate appraisal to the staff and then make them accept the appraisal in a constructive manner. A discussion on appraisal enables employees to know their strengths and weaknesses. This has, in turn, impact on their future performance. The impact may be positive or negative depending upon how the appraisal is presented and discussed with the employees.
- Initiate Corrective Action – The final step in the appraisal process is the initiation of corrective action when it is necessary. The areas needing improvement are identified and then, the measures to correct or improve the performance are identified and initiated.