40 Performance Appraisal (Meaning, Objectives and Stages of Performance Appraisal)

Contents

1.       Objectives

2.       Introduction

3.       Meaning of Performance Appraisal

4.       Objectives of Performance Appraisal

5.       Steps Involved in Process of Performance Appraisal

1.      Objectives

At the end of the module, the learner will be able to-

• Explain the meaning of performance appraisal List the objectives of performance appraisal
• Identify the steps involved in the process of performance  appraisal

2. Introduction

Personnel management is a significant task of any institution and of great importance for the well being of an organization. Personnel management can be defined as a process of obtaining, using and maintaining a satisfied workforce. It also helps the employers to maintain good employer-employee relationship within the organization. Cordial working environment can be a great motivator to enhance performance. Personnel management involves the planning, organizing, compensation, integration and maintenance of people for the purpose of contributing to organizational, individual and societal goals. Basically Personnel Management is primarily concerned with managing human resource of an organization. A significant aspect of personnel management is induction or employing of an individual.

In an organization, the induction of an employee on the job is of significance but retaining an employee is the more significance as it reflects on the workplace climate and ultimately on the image of the institution. Hence each institution takes efforts to conduct training programmes for better performances. Though the training programmes other related educational programmes, comprises of several complex training and, most of the development occurs on the job. Such training programmes enables the employee to equip himself or herself in a more efficient manner suited to the goals of the institution.

What aids such development is constant and methodical feedback. Faculty will be slow and ineffective if the employee is not systematically appraised and feedback information regarding his/her quality of performance at work is not communicated.

Hence, every organization including educational institutions, have a formal and meticulous mechanism of evaluating work performance of employees followed by constructive feedback.

It should be noted at this junction that the feedback is not for degrading an employee, but is to be utilized for employee upgrading. Appraisal of work or performance or what is popularly known as Performance appraisal should be to shape the individual competence to match the institutional requirements and goal.

3.      Meaning of Performance Appraisal

In order to understand the abilities of the employee from the point of view of further growth a systematic evaluation of the performance is done and the same is called as Performance Appraisal. This systematic evaluation may be done to measure the pay of the employee and compare it with target and plans; to analyze the factors behind employee performance and to guide the employee for better performance.

Performance appraisal is often referred to as a performance review or at times performance evaluation. It may at times be referred to career development discussion or employee appraisal. The process of performance appraisal involves documentation of job performance, which is also evaluated.

Performance appraisal can be described as being the ‘net effect of a person’s effort as modified by his abilities and traits and by his role perception’ (Porter & Lawler, 1968).

Therefor performance in a given work situation can be viewed as outcome which results from the interrelation between effort, abilities, and task (role) perceptions. In other words, performance refers to the degree of execution of the tasks that make an individual’s job. It reveals how effectively and efficiently an employee has fulfilled the requirements of the ascribed job. Performance is constantly measured in terms of outcomes.

Determination and communication of how an employee is functioning with respect to his/her given task is a continuous process and hence Performance appraisal is called as a process. In the words of Edwin Flippo, performance appraisal is “the systematic periodic, and impartial rating on an employee’s excellence in matters pertaining to his present job and to his potentialities for a better job.”

Performance appraisal can be effectively used to let the employee know how well he is performing, but should influence the employee’s future level of effort, activities, results and task direction. Quite obviously, effort will be enhanced if the employee is properly reinforced. Every performance appraisal, therefore, involves establishment of a plan of improvement of employee’s performance.

A comprehensive definition of Performance appraisal has been put forth by Carl Heyel, who asserts that, “ performance appraisal is a process of evaluating the performance and qualifications of the employee in terms of the requirements of the job for which he is employed, for purposes of administration including placement, selection for promotions, providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally.”

Some educationists unanimously agree that performance appraisal is indoctrinating; it is a process of estimating or judging the value, excellence, qualities or status of employees in an organization.

4.      Objectives of Performance Appraisal

Performance appraisal is a systematic and planned activity aimed to improving the efficiency of the entire organization by facilitating most applicable decisions about the personnel – such as determination of promotion, feedback on improvement areas, identification of training needs, assignment of future assignments to the employee etc. Performance appraisal refers to the elaborate process of reviewing one’s performance and output over a certain period of time and not only give correct feedbacks but also acknowledge and appreciate the hard work. Therefore performance appraisal is conducted with following objectives in mind:

1. To maintain records in order to define reimbursement packages, remuneration structure, salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right person on the right tasks.
3. To maintain and gauge the latent talents in a person for further development and progress.
4.   To provide a pointers to employees regarding their performance and related status.
5. It serves as a basis for shaping working habits of the employees.
6.   To review and retain the promotional and other training programmes.

Let us review a case study on the manner in which performance appraisal in conducted in an educational institution. After reading the case study, appraise what should be the corrective action that should be adopted by the institution.

Mrs. Shreevastava is a talented and well-experienced human resource manager of a well-known chain of educational institutions. She undertakes her role of HR manager by being an administrative expert and a change agent. She has always been an inspiration for her subordinates and the employees whose performance is measured and appraised by her. It is because of Mrs. Shreevastava’s 15 years of experience of working in HR departments of varied educational institutions helped her to get acquainted with various Performance Appraisal methods for evaluating the performance of her employees in a better way every time.

She had always been implementing only those methods which she found result-oriented in terms of enabling the employees to know about their performance in the institution, to help them in providing adequate training, if required, to increase their potential, to provide concrete feedback and evaluate their current job performance to determine transfer, retention and termination of employees. She has been working in this institution since last 5 years and has gained good amount of respect and faith from her employees due to her appropriate and fair performance appraisal techniques that facilitated the uses of performance appraisal.

Because of Mrs. Shreevastava’s good rapport and close relations in the recent months with her subordinates Mrs. Mehta and Mrs. Dande, she has developed a new tendency to appraise the performance of those employees known to Mrs. Mehta and Mrs. Dande with leniency and because she finds them similar to them (personality and knowledge wise). As a result of this unfair and inappropriate appraisal of Mrs. Shreevastava she also evaluates the performance of the employees taking into account their recent performances only. Hence, most of the employees’ productivity has reduced and is inefficient, even some of the good employees have become irresponsible towards their tasks along with different behavior showing no interest to put in their best efforts to realize the goals and mission of the institution. Some employees are planning to resign as no proper feedbacks are provided when required and no better prospects for promotions are expected to see the light of the day.

Based on the aforementioned case study, highlight the slipups that happened in the conduct of performance appraisal.

Performance appraisal should be well thought and well planned activity with clear cut and detailed activities.

The following are some detailed objectives of conducting Performance Appraisal in an institution:

Promotion: Promotion programmes for proficient employees can be designed by utilizing Performance Appraisal. Incompetent workers can be dismissed or demoted in case or can be supported with related training programmes.

Compensation: Compensation packages for employees which include bonus, high salary rates, extra benefits, allowances and pre-requisites, can be decided on the basis of Performance Appraisal. Merit rating is possible through performance appraisal. The criteria should be merit rather than seniority.

Employees Development: An institution can frame training policies and programmes with the help of outcomes of performance appraisal. Performance appraisal helps to examine potencies and drawbacks of employees so that challenging jobs can be designed for efficient employees. It also aids in framing future improvement programmes. The institution explores the elements behind work performances of the personnel.

Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance, strengths and weaknesses of the selection procedure. Hence requisite changes can be implemented in selection methods based on the feedback from performance appraisal.

Communication: Effective communication between employees and employers is key to building effective personnel. Through performance appraisal, communication can be sought for in the following manner:

a.       Performance appraisal enables the employers to appreciate and acknowledge skills of minions.

b.       The minions can also understand and create a trust and confidence in superiors.

c.       It also supports in maintaining cordial and congenial workforce management relationship.

d.       It cultivates the spirit of effort and boosts the morale of employees.

All the above factors ensure effective communication.

Motivation:

Performance appraisal serves as a motivation tool. If targets are effectively achieved then personnel efficiency can be determined. This in turn is motivating for the individual to put in even more efforts and enhance his performance further. Performance appraisal also puts the employers are in a position to guide the employees for a better performance.

Setting goals:

Performance appraisal enables the employer to align the individual’s goals with the institution’s goals. Individual’s growth and progress should enable the intuition to grow and vice versa; the development of the institution serves as a springboard for further development of the individual.

Let us review some more case studies.

One of the objectives of performance appraisal is to weed out bad performers or individuals who don’t perform in alignment with institutional goals. This case study is about of using performance appraisal to identify and remove a bad leader. Before we get to the story, we have to face up to how we often get it wrong. Many a times institutions decides that someone is a poor performer and then the human resource manager uses performance appraisal to create a paper trail so as to justify firing them.

Here performance appraisal is not used to help identify bad performers; it is used to build a case against someone. This can be an ugly process. The way to avoid it is to have honest appraisals that face up to problems early, and but when an honest appraisal does not happen then it can be detrimental to the institution. The following case study reflects the same.

The case study is situated in an elite school in a metropolitan city. The institution has a good and fairly decent performance appraisal in place. Almost all employees are rated good if not excellent. The employers were extremely reluctant to offend any employee by giving them a bad score, even though there would be open discussions about bad and slipups in performances. The institution started losing its reputation slowly and steadily. The management could not understand the reason behind such downward slide in the reputation of the institution. All the employees had good ratings in their performance appraisal then why were the institutional goals not met. At this junction, the management decided to incorporate anonymous multi-rater feedback into the performance appraisal. It is often said that multi-rater feedback should only be used for developmental purposes, but this case tells a different story. Freed by anonymity and the comfort of knowing their own rating was only one of several, the feedback in the appraisal was, for the first time, brutally honest. Due to this change, it was seen that the leaders, that is heads and supervisors got terrible scores. While this not surprising but for the first time it was put on record. The management provided the aforesaid employees one-year time to improve their performance. Individuals who were able to up their performance after one year were retained but those who couldn’t; the institution let go of the employees.

This case study shows that performance appraisal can identify and remove bad performers. It doesn’t do so automatically; the institution needs to enable-

• even force–tough and honest appraisals. If institution does or utilizes honest performance appraisal system then the true value of the process is readily evident.

As seen in the earlier case study that a non-performing employee can be weeded out using performance appraisal, on other hand performance appraisal can rescue a good employee who is en route to failure

The case study began when a woman was transferred from primary section into secondary section of the school. It was not long before complaints were coming in, which set the stage for an unpleasant mid-year performance review.

“What is your future plan?” asked her principal, trying to build some perspective on the situation rather than jumping into a series of criticisms. The teacher had no answers. “Tell me what you would like to achieve in this job?” her principal persisted. After avoiding a direct answer she eventually blurted out, “Why are you asking me this? I love this job.” Then she burst into tears.

Her principal knew there was a problem but could not put her finger on why she was doing so poorly. Neither did she have the time to devote to a lot of coaching. She knew that the teacher was motivated and had a good track record in her previous job. Despite the complaints from her internal clients the principal wanted to give her a chance. Her solution was to sidestep the issue by getting her to report to another supervisor with a great reputation for mentoring. The new supervisor took her under her wing.

The new supervisor soon got to the root of the problem. The teacher was smart and dedicated, but had no relevant experience and no idea how to do deal with teaching at secondary level. It was a serious but fixable problem. With a little time and a little guidance she figured things out and got on track. Actually, she did more than get on track. She proved to be the best person the institution ever had. She went well beyond what was expected. She was a star.

Here the case study of performance appraisal leading to a rescue of lasting value to both the institution and the individual involved. There are some notable points worth highlighting. One is that because the institution does frequent reviews, not just once a year, there was a chance to detect and respond to the problem early on. Secondly, the process merely set the stage for the rescue. The rescue itself occurred because the principal cared enough to get her into a good mentoring situation, and her new supervisor was dedicated enough to help her solve the problem. Performance appraisal can make a big difference, but only in capable caring hands.

Every institution puts in umpteen efforts to recruit an employee. The probationary review is an important aspect of performance appraisal. No matter how good the recruitment processes are, mistakes do happen. The probationary period is when the institution can identify such errors and try to rectify them. All this is possible only when institution conducts the performance appraisal in an honest manner.

In the following case study the situation involves recruitment of teacher employee in an institution. The teacher recruited has come with a strong recommendation from previous employer, good resume and strong approval from all the interviewers. However, as per policy the job was contingent upon the new hire passing a probationary review at six months. The principal knowing that they would be held accountable for doing a proper review, started gathering feedback on the new employee’s performance. The initial indications were worrying. The new hire seemed to have problems working in teams—and this was a situation where the majority of employees worked in teams. The new employee was eager to work alone but picked up fights while doing tasks in teams. The leader was concerned, and realized that the new employee even though good but could be a team player. Such an attitude could be detrimental to the goals of the institution. It turned out the new hire was a mistake. The new hire failed the probationary review and was sent on her way. Interestingly the leader later heard through the grapevine that the previous employer was sure the fellow would not work out in the new job. Somehow this conviction did not dissuade them from giving him a glowing reference. Annoying as this sounds, it confirms that letting the person go was the right decision.

This is a straightforward case, but it should raise a round of applause for performance appraisal. Had it not been for the process the leader probably would have felt they were too busy to closely watch this new employee and not make the effort to dig for more data when warning signs appeared?

When performance appraisal works it gets people to pay attention and act in a timely way. Far too often probationary reviews are a mere formality and in the years ahead people wonder how some incompetent got past probation and struggle with whether it is worth all the hassle to try to get rid of them now. By detecting the bad apple early, the system saved the institution a lot of grief.

5.      Steps Involved in Process of Performance Appraisal

The six steps involved in process of performance appraisal are as follows: 1) Establish Performance Standards 2) Communicate Performance Expectation to Employee 3) Measure Actual Performance 4) Compare Actual Performance with Standards 5) Discuss the Appraisal with the Employee 6) Initiate corrective actions.

a.      Establish Performance Standards:

Any appraisal process initiates with the formation of performance standards. The educational managers must determine what productivities; achievements and proficiencies will be evaluated. These standards should be decided on the basis of job analysis and job descriptions.

These performance standards should also be clear and objective to be understood and measured. Standards should not be expressed in an articulated or vague manner such as “a good job” or “a full day’s work” as these vague phrases tells nothing.

b.      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 is expected of them. Past experience indicates that not communicating standards to the employees increases the appraisal problem.

Here, it must be noted that mere transference of information (relating to performance standards, for example) from the educational manager to the employees is not communication. It becomes communication only when the transference of information has taken place and has been received and understood by the employees thoroughly.

The feedback from the employees 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. It is important to note that communication is a two-way street.

c.  Measure Actual Performance:

This is the third step involved in the appraisal process. In this stage, the actual performance of the employee is measured on the basis of information available from various sources such as personal observation, statistical reports, oral reports, and written reports.

Needless to mention, the evaluator’s feelings should not influence the performance measurement of the employee. Measurement must be objective based on facts and findings. This is because what is measured is more critical and significant to the evaluation process than how we measure.

d.      Compare Actual Performance with Standards:

At 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 in the process, i.e., the discussion of the appraisal with the concerned employees.

Discuss the Appraisal with the Employee:

The fifth step in the appraisal process is to communicate to and discuss with the employees the results of the appraisal. This is, in fact, one of the most challenging tasks the educational manager’s face to present a precise appraisal to the employees and then make them acknowledge the appraisal in a beneficial manner.

A conversation on appraisal enables employees to know their fortes and limitations. 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.

The corrective action can be of two types. One is immediate and deals predominantly with symptoms. This action is often called as “putting out fires.” The other is basic and delves into causes of deviations and seeks to adjust the difference permanently.

This type of action involves time to analyze deviations. Hence, managers often opt for the immediate action, or say, “put out fires”. Training, coaching, counseling, etc. is the common examples of corrective actions that managers initiate to improve the employee performance.

References

•  Heyel, C. (1973)(p.654). The Encyclopedia of Management. New York: Reinhold Publishing Co.
• Mamoria, C. B. (1995)(p.403-446). Personnel Management. Bombay: Himalaya Publishing House.
• Flippo, E. B. (1984)(pp.225-28). Personnel Management. New York: McGraw- Hill.
• Jucius, H. J. (1976)(pp.145-160). Personnel Management.
• Porter, L. W., & Lawler III, E. E. (1968)(p.28). Managerial Attitudes and Performance. Illinois, Homewood: Dorsey Press.
• Rao, V, & Narayana, P. S. (1987)(p.466-482). Principles and Practices of Management. New Delhi: Konark PVT LTD.
• Yodder, D. (1970)(p.240). Personnel Management. Englewood Cliffs: Prentice –Hall, Inc .