Performance Appraisal Definition Tiffin and McCromick Say Perfomance Appraisal is a systematic evaluation of personnel by their supervisors or others

who are familiar with their work performance. (1) Promotion : One of the purposes of performances appraisal is to provide a base for giving promotion to employees. Wherever an employee is to be given promotion, that is when he is to be placed on a higher position carrying more responsibilities and higher emoluments, performance appraisal becomes useful. (2) Transfer : In order to correct the error of wrong placement or to make the maximum use of the ability of employee, he may be transferred from one job to another. Performance appraisal will tell whether this is necessary or not. (3) Training and Development : The performance appraisal will be useful in two ways. One to assess the skill and ability of employee and if any deficiency is found to arrange for their training. Second, it is used for development of mental abilities and skills officers also. (4) Wage and Salary Administration : The wage structure is determined on the basis of skill and ability of employees. In certain cases both seniority and performance appraisal from the bases of salary increases. (5) Personnel Research : This involves gathering facts and finding about the effects of various personnel policies. There may be salary survey, opinion survey. (6) Self-Improvement : It tells there where they stand, how they are doing and where improvements are needed. This leads to self improvement. The employee himself will try to make up his deficiencies. BENEFITS OF PERFORMANCE APPRAISAL : (1) Basis for promotion : It provides a sure and scientific basis for promotion of employees. In other words it avoids personal bias and arbitrary judgement in promotion. (2) Transfer and dismissal : It helps, if necessary, in dismissing some of the employees found to be inefficient. The employees who

figure very low in merit rating may be demoted on the basis of appraisal. (3) Useful for Training Programmes : Employee appraisal is used to disclose the need for training programme. Where certain deficiencies are found in a large number of employees, it may lead the management to devise a training programme suggested by the results of appraisal. (4) Useful for Suggestions and Guidance : It can be used as a basis for discussion with each employee his strong points and weakness. Also suggestions can be given to them as to how they may improve or reduce their deficiencies. (5) Helpful to Management : The practice of employee appraisal is a definite aid to management in promoting better understanding in regard to many of the decisions affecting employees. (6) Increases production : As the result of performance appraisal, employees devlop a sense competition with fellow workmen. This provides a right incentive for better achievement. The ultimate result is an increases in production. (7) For Wage Determination : Wage structure in determined scientifically on the basis of abilities and skill of employees brought to light by performance appraisal. (8) Reduces Wastage : As the employees become conscious that they are being rated, they try to reduce wastage, pay more attention to quality of goods and take proper care of materials and machines. (9) Reduces Employees Grievances : When employees know that whatever treatment is being given to them is based on scientific evaluation of their performance, they do not complain. (10) Better Employer-Employee relations : Due to performance evaluation, there will be an atmosphere of trust and confidence in management. The employees will freely discuss matters with their supervisors. All these lead to better relations between the two parties. LIMITATIONS OF PERFORMANCE APPRAISAL : (1) No uniformity : The ratters apply different standards in performance evaluation according to their whim. Points given to be same worker by different ratters very concisely. There is no uniformity. Hence the reliability of ratings is open to doubt.

(2) Absence of logical points : If the ratters do not give points logically, then the worker may be rated high or low than what he actually is. (3) Halo Effect : The Halo effect also twists the result of rating. It means that if a ratter observes that an employee is very intelligent, then he is apt to believe that he is very loyal also. (4) Error in rating forms : Errors in devising the rating forms may also be responsible for failure of the rating system. (5) Useless in connection with promotion : Employee appraisal is useless in connection with promotion because rating is based on an assessment of what the employee did on his present job. Promotion requires special assessment in terms of the requirements of the new job.

PROMOTION , TRANSFER , DEMOTION , ETC . MEANING AND DEFINITION OF PROMOTION : According to Dale Yoder, Promotion is a movement to a position in which responsibilities and presumable, prestige are increased. CRITERIA OF PROMOTION : [1] Seniority as the basis of promotion : Under this system promotion is based on seniority, that is, on the length of service of the employee. (A) Arguments in favour of seniority : (1) Reward for loyalty : Seniority is an index of loyalty. Hence when a senior employee is promoted to a higher post, it is a reward for his loyalty. (2) Free from uncertainty : This system is simple and smooth. There is no uncertainty. Everyone knows what seniority means. Hence every one of the employees knows, with certainty when hw would get promotion. (3) Favoured by trade unions : Trade unions also are in favour of this system because the problem of partiality, favouritism, discrimination does not arise in it. (4) Reduction in labour turnover : The system of giving promotion on the basis of seniority helps in reducing labour turnover. It increases the experienced labour force. (5) Simplicity : the system of promotion based on seniority is easy to understand. Comparison of the length of service of two employees can be made with exactness. Anybody can say who will get promotion and when. (6) Impartiality : There is no scope for prejudice, partiality and corruption in this system. The criterion of seniority is self-evident. If the management indulges into any partiality, it easily comes into light and is opposed by the employees.

(7) Satisfaction of employees : Injustice to employees who are really entitled to get promotion is not possible under this system. Therefore this system is able to keep employees satisfied. (B) Arguments against seniority : (1) Indiscipline : If promotion is mechanically linked with seniority, employers lose control over employees. This may encourage labour indiscipline. (2) Inefficiency : There is no definite relation between efficiency and seniority. On the contrary, employees may become careless and inefficient, if they are sure about their promotion. (3) Frustration : This system causes frustration among those employees who are at the end in the order of seniority. This is the reason why young and brilliant employees keep away from those enterprise in which seniority is the criterion of promotion. (4) Wrong belief : It is not true that the longer the services of employee more competent the employee becomes. Many times it is observed that junior employees work with more zeal and devotion than the senior ones. (5) Low morale : Merit should be given more weightage than seniority from the viewpoint of productivity. Under the system of seniority linked promotion, employees becomes static and their morale goes down. (6) Impact of age : Generally the senior most employee is the most aged person. Therefore even physically he will be weaker than a junior employee. His efficiency will therefore be low.

[2] Merit as the Basis of promotion : Under the system of merit-linked promotion, employees qualification, merit and skill are taken into account. In simple terms, ability means efficient. (A) Arguments in favour of Merit : (1) Encouragement to efficiancy : This system encourages employees to improve their efficiency. Besides, they are satisfied with the system in which their ability is appreciated. (2) Attracts talented employees : The talented and skilled employees are attracted to those business enterprise which appreciate and reward ability. Hence such business units get a wider choise of employees.

(3) Reward for competence : Employees ability can be assessed fairly accurately with the help of merit rating. There is no better method than to give promotion on the basis of such competence. (4) Optimism : Even junior employees with grater ability can hope to secure promotion under this system. This optimism can have favourable impact on their performance. (5) Self-assessment : Under this system, employees are inclined to assess themselves on their own ability and skill. If they detect any deficiency, they themselves attempt to remove it. (B) Arguments against Merit : (1) Influence : Under this system, officers prejudices, influence or favouritism play its role in promotion. Hence, sometimes competent employees do not get promotion when due. (2) Difficulty of measurement : It is a very difficult to have an accurate and objective measure of ability. (3) Expensive : This system is expensive also. To assess ability, interviews are to be arranged and personal records are to be maintained. (4) Opposed by trade unions : Trade unions oppose this system. Therefore if employers insist upon this system only, they come into conflict with unions. (5) Non-co-operation of senior employees : Employees who are not promoted in spite of their seniority would not extend full cooperation to the employers. Thus, integrity and efficiency of the unit would suffer. TRANSFER : Transfer is shifting of the employee from one job to another without any change in status or salary. Edwin B. Flippo defines transfer as a change in job where the new job is substantially equal to the old one in terms of pay, status and responsibilities. Reason (Causes) for transfer : (1) Shortage of manpower in some department : When there is shortage of manpower in one department or one department is faced with pressure of work, employees may be transferred to it from other department.

(2) Reorganisation of business enterprise : When there is a reorganisation of business enterprise, employees from one department where there is over staffing may be transferred to other department. (3) Remedial measure for wrong selection : Transfer may be made as a remedial measure. It means if an employee is wrongly selected or a placed at a wrong job , he is transferred. (4) Bored or tired on the same job : As employee may feel bored or tired by working on the same job, they are transferred to similar job. (5) Personal needs : Sometimes, transfer are made due to personal needs of the employees. Health may be one of the causes of such transfer. (6) Precautionary measures : Sometimes transfers are made as a precautionary measure to avoid misuse of office or misappropriation of funds by the employee. (7) Shifts : There may be transfers due to shifts also. When the factory runs in shifts, employees are transferred from one shift to another. Management Policy as regards Transfer : [ Guiding principles ] (1) The transfer policy must be clearly laid out and made in writing. (2) It must very clearly specify when, circumstances the transfer will be made. why and in what

(3) It should clearly indicate the officer who will be responsible for transfers. (4) Complete records of all posts, jobs, positions etc. should be maintained. (5) It should be clarified that the employee transferred will maintain his seniority. (6) The transfers employees. should not result into dissatisfaction of

(7) Transfer should not be made as a result of prejudice against any one. It must be just and equitable.

(8) When an employee is transferred from one city to another, care must be taken to see that his family life is not disturbed. (9) The policy should specify the area over which transfers can be made. Whether transfer can be made within one department or between different departments or inter-plant.

DEMOTION : An unpleasant work that a manager has to do is to demote an employee to a lower post. Demotion means, the assignment of an individual to a job of lower rank and pay usually involving lower level of difficulty and responsibilities. In other words demotion results into lowering down of the status, salary and responsibility of an employee. CAUSES OF DEMOTION : (1) If the employee is not performing well on the job continuously, he may be demoted. (2) If an employee has lost his capacity to work efficiently. (3) It may be the result of staff reduction policy of management. (4) Demotion may be used as disciplinary measure. (5) It may be made to rectify the mistake in staffing. It may be that an employee is wrongly promoted. THE POLICY SHOULD BE AS FOLLOWS : [Guiding principles ] (1) A clear policy and circumstances when a person will be demoted must be stated. They must be communicated to all employees when they are appointed. (2) There should be a proper inquiry in case of breach of rules before demoting an employee. (3) The penalty for violation of rules or discipline must be consistent and equal for all. There should be no discrimination. (4) There should be review of cases from time to time.