All organization faces the problem of directing the energies of their staff to the task of achieving organization goals and objectives. In doing so, organization need to devise means to influences and channel the behavior of their contributions. Performance appraisals constitute one of the major management tools employed in this process. This is based on the perception of an individual’s performance in a job is improved by having definite goals, feedback about their performance and complemented by an appropriate reward system. Therefore, performance appraisal are been implemented. Performance appraisals are used in nearly all organization in worldwide. Corporations use different tools and have a number of goals for performance appraisal often resulting in some confusion as to the true purpose of performance appraisal systems. However, it is core because it allows an organization to measure and evaluate an individual employee’s behavior and accomplishment over a specific period of time. There are many advantages in using performance appraisal in facilities such as reward allocation, promotion or demotions, layoffs or recalls and transfers. It also assists manager to develop employees. Additionally performance appraisal may increase employee commitment and satisfactions due to improvements in organization communication. The outcomes of performance appraisal are in the form of work performance, affective organizational commitment and turnover intention are very crucial to support the overall growth of an organization.
Performance Appraisal define as a process by which a manager or consultant, evaluates an employee’s work behavior by comparing it with present standards, documents the result of the comparison and uses the results to provide feedback to the employee to show where improvements are needed and why. Performance Appraisals are employed to determine who needs what training, and who will be promoted, demoted, retained or fired. Besides that, the employees merit like initiative, dependability, and personality to compare with others and ranked or rate base on their performances.
Although the performance appraisal is very importance for every kind of organization, it does have several functions. The primary purpose of performance appraisal is to justify the individual performance most often through (1) Clarifying job requirement and standards. (2) Providing feedback to the employee regarding his or her progress toward meeting these standards (3) guiding future performance by formulating an action plan and allocating rewards and opportunity.
The purpose of providing feedback is to improve performance in the future for employees and team leaders. Managers able to get valuable information from their staff regarding about the employee and it will help the employee to make their jobs more productive. This process can go through by providing feedback in performance appraisals work units can identify problems that interfere with everyone’s and take steps to rectify them. Besides that, it also provides an opportunity to discuss strength and resolution of performance deficiencies of an employee. By this, it will allow the employees to move in his/ her direction. The employers promote a positive attitude, advancement and motivation to make the employee to understand their own special potential and find the roles which they really fit well. This also helps the employee to develop as a whole-person which is an important aspect of modern corporate responsibility. The advantage of it is the employment market in which all employers compete to attract the best recruits and to retain the best staff.
Second purpose of performance appraisal is to guide future performance by formulating an action plan and allocating rewards and opportunity. This is where the action plan put into place. The employee should be given time frame for the implementation of the plan in the future. So that the employee can spelled out completely and know what actions should be taken and when it should implement. The organization should inform the employee regarding the plan. Therefore the employee know what is to be accomplished, once the implementation of the plan. Besides that the manager and employee should communicate on a regular basis to discuss the effectiveness of the plan.
Therefore, the business moves one step closer to the achievement of their set goal and objectives. This also helps to maintains record of workers that are legally viable which can protect the business when dealing in cases of dismissals and demotions.
Importance of Performance Appraisal in Organizations
The need of the performance appraisal system is mainly to find out the area of strengths and weakness of the employees. These strengths and weakness are studied by the HR managers carefully and are discussed with the employees the time of the appraisal. The performance appraisal process involves setting of performance standards which can help the comparison of the performance of all the employees. Communication of these standards to all the employees of the company is also one of the most crucial processes in the performance appraisal process. Performance measurement is a process which taken time and lot of efforts on part of the senior management of the organization. At many places, marks or grades are given to the employees by comparing their actual employee performance with the desired performance.
Performance appraisal strengths and weakness can help employees conduct a reality check on them and improve their performance. The last step in the performance appraisal process is that of decision making in which the employees are given sufficient time to learn new technologies, be more efficient, increase their working speed and improve the quality of their work. The performance appraisal methods adopted by companies can differ depending on their needs.
In many organizations, the feedback on job performance is ambiguous or is given annually as a ritualistic exercise. Many subordinates therefore haven trouble in gasping how their efforts are perceived by the organization. Almost everyone who has worked at a job can remember times when they were unclear on how their performance was being judged. The annual performance appraisal system tends to serve only a little purpose such as salary administration, training and succession planning, but this is not the sole objective of performance appraisal. These objectives will only dilute and weaken the clarity and validity of any appraisal system. Most organization ties the formal appraisal system directly to salary increase, which decrease their validity. Performance appraisal systems are important for organization because it proper enforcement of personal decisions, help works as control device and also give guide the employee development. Performance appraisals provide employee and manager with opportunities to discuss areas in which employees excel and those in which employees need improvement. Performance appraisal should be conducted on a regular basis and they need not be directly attached to promotion opportunities. Performance appraisal is importance in term of personal attention because during the review, supervisor and an employee discuss the employee’s strengths and weakness. This give an opportunity for the employee personally face the supervisor and able to address personal concerns. Besides that, it also importance to communicate about the divisional and also company goal. These help the management to communicate with employee regarding about goal of the company and also highlight the way in which the employees can participate in the achievement of those goals.
Benefits of Performance Appraisal
Most significant benefit of performance appraisal is conducted properly by both supervisors and subordinates have reported the experiences as beneficial and positive. Many supervisor avoid administering performance reviews because the fear of criticizing their employees and also the paperwork. Employees also fear because of negative feedback, being refused a raise or punished for issues out of their control. But appraisal offers a valuable opportunity to focus on work activities and goals, to identify and correct existing problems and to encourage better future performance. Thus the performance of the whole organization is enhanced. Performance appraisal benefits the employee in (1) increased employee productivity and (2) improve areas of weakness.
- Increased employee productivity: Supervisors use performance appraisals to help employees to get a better understanding of their roles and responsibilities within the framework of the company goals. When the employees know that they are an integral component to the overall performance of the company, they will feel more accountable with their duties. Therefore, the supervisor can accurately identify their weaknesses and assist employees in improving and also able to increase the productivity of the employee.
- Improve areas of Weakness: Performance appraisals can expose employee’s weaknesses and enables them to improve for further career development. Employees have to use the feedback to expand their skill base and focus on areas that need coaching and education.
Performance Appraisal and Employee Motivation
Performance appraisal enables supervisors to formally recognize the achievements and contributions of their employees. The appreciation which receives from subordinates help to increased retention of highly productive employees. During the performance appraisals, supervisor may use incentives such as raises and promotions to motive the employees.
For management, performance appraisals bring out the key and non-key performers. The management then takes steps to hone the key performers and develop the non-key into putting in their best. Performance appraisals identify the areas where training and development are needed. This is to expose their weakness and enable them to improve for future career development, if an employee desires to become a manager, yet leadership are lacking, performance reports reveal this incompetency. Employees use review to expend their skill base and focus areas that need coaching and education. This is to assist employees in deciding if they are in the industry that matches their values and personality. Besides that it helps the management to generate idea for improvement.
Role of Performance Appraisal on Employee Performance
Implementing employee appraisal is an important responsibility for a company manager and supervisor. Employees are highly praised for their contribution and given constructive ways to improve the area that are still being learned. Therefore, well designed appraisal systems can strengthen good relationships between supervisors and employees. To improve the appraisal system, there are several ways such as (1) a collaborative approach, (2) Clear objective, (3) Focus on observable behavior (4) Avoid personal feedback.
- A collaborative approach: If both supervisor and employees help to develop the appraisal system, they are likely to endorse it. Therefore, the collaborative approach has several advantages. The appraisal system is likely to be accepted and endorsed by both supervisor and employees since it was created by their peers. Besides that, the actual appraisal form will probably be more meaningful and appropriate since it directly reflects the objectives of their peers. In addition, performance dimensions are tailored to the organization and are clearly defined in appropriate terms. The policies and procedures take into account organizational objectives and concerns.
- Clear objective: In formal performance appraisal system there will be two objectives that compete during the appraisal process. Firstly is to provide feedback to the employees. This is to help the employees to develop themselves and improve their performance. Secondly is to document the performance and to communicate and support administrative decisions about salary increase, promotions, and transfers. Therefore, an effective appraisal system is to focus on one objective during the interviews. These help the supervisor to conduct the interview to improve performance as often as necessary for the benefit of employees, supervisors and the organization as a whole.
- Focus on observable behavior: In appraisal process, discussion between supervisor and employee is most important. In this process, supervisor are not been trained to handle the interview with their employees. The main reason why this process is importance because it help the employee’s to understand and use the feedback to develop themselves and improve their performance in future. If the feedback it not clear, then it will be difficult for the employee to understand.
- Avoid personal feedback: In all appraisal form contain a section on “employee strengths and weaknesses” where supervisors comment about the employee’s aptitudes and qualities that will contribute to or interfere with an employee’s job performance. In the form, the supervisor need to rate the employees on the personal traits such as maturity, attitude and personality. The problem arises when the supervisor gives feedback to their employees. The employees often become suspicious when they receive general comment such as rate between 3 on a 5 point scale of maturity or poor interpersonal skill. This type of feedback are often disagree by the employees because the characteristic being evaluated are not directly observed. The supervisor does not see the initiative, aptitude, maturity or even job knowledge and interpersonal skill of the employee’s but they see in a large number of individual behavior form they infer traits and aptitudes. The supervisors who evaluate their employees in these vague, subjective terms may find themselves in court defending their performance appraisals against charges of EEO violations and discrimination against women and minorities.
To summarize, performance appraisal should be viewed as a beneficial process within the context of an effective systems of personnel management. It should be accepted as a normal management responsibility to review the performance of all employees and for all managers to discuss performance with their subordinates on a regular basis. Performance appraisal can be an effective tool if they are used in a constructive and motivating manner. The appraisal should target specific areas of weakness and strength. It is importance for employees to know the areas where they are under performing as well as the categories where they excel. A performance appraisal should be a well-though out instrument designed to bring about a desired behavior. When you communicate with an employee using a performance appraisal, it provides an opportunity for clarification of any discrepancies. Those elements will help to ensure that performance appraisal conducted in any organization will yield the desired benefits and be more readily accepted by all concerned.