Performance Appraisal: Objectives, Standards, Process

Performance Appraisal is a control process in which employee’s performance is evaluated against standards. It enables the comparison of actual performance with pre-determined goal and job expectations

Meaning of Performance Appraisal

Performance appraisal is the systematic evaluation of employees with respect to his performance on the record of his potential for development. It is the process to understand the abilities of a person for further growth and development It attempts at placing on record certain personality and behavioural characteristics of the individual, effectiveness of the job and contribution to the achievement of organizational goals.

Objectives of Performance Appraisal

  • To meet legal requirements, including those for standardized forms and procedures, and clear and relevant job analysis
  • To motivate employees for better performance of task.
  • The ultimate objective of the performance appraisal is to enhance accountability and improve standard of practice
  • To maintain records in order to determine compensation packages, wage structure, salaries etc.
  • To identify the strengths and weaknesses of employees to place right men on right job.
  • To maintain and assess the potential of a person for further growth and development.
  • To provide a feedback to employees regarding their performance and related status.
  • To provide a feedback to employees regarding their performance and related status.
  • It serves as a basis for influencing working habits of the employees.
  • To review and retain the promotional and other training programmes.
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Standards for Performance Appraisal

The important sources of standards for performance evaluation are:

  1. Job analysis: It is the procedure for determining the duties and skill requirements of a job and the kind of person who should be hired for it
  2. Job description: It is a written report outlining duties, responsibilities and conditions of the work assignment. It is a description of job and not of the person who happens to hold the job
  3. Job evaluation: It is the process of analyzing and assessing the various jobs systematically to ascertain their relative worth in an organization.

Process of Performance Appraisal

There are six steps involved in the process of performance appraisal:

  • Establishing Performance Standards: The first step in the process of performance appraisal is the setting up of the standards which will be used to compare the actual performance of the employees against the standards set. The standards set should be clear, easily understandable and measurable.
  • Communicating the Standards: Once performance standards are set, it is the responsibility of the management to communicate the standards to all the employees of the Organization. The employees should be informed and the standards should be clearly explained to the employees. This will help them to understand their roles and to know what exactly is expected from them
  • Measuring the Actual Performance: It is a continuous process which involves monitoring the performance throughout the year
  • Comparing the Actual with the Desired Performance: The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance
  • Discussing Results: The result of the appraisal is communicated and discussed with the employees on one-to-one basis. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees’ future performance. The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better
  • Decision Making: The last step of the process is to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.

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