Performance appraisal system definition

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I. Contents of getting performance appraisal system definition

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Significance

A performance appraisal system is part of the HR planning process of an organization.

Well-defined structures, frameworks and procedures define a workable and effective
performance appraisal system. A systematic and timely use of the system reflects the
commitment of business owners, enterprise top management and HR personnel toward their
employees and extended workforce. Its deployment and usage involves detailed and periodic
assessment and grading of an employee's overall performance, future potential, organizational
commitment and the resulting promotions and rewards.
Detailed Employee Appraisal

Performance appraisals can be done semiannually or annually depending on specific

organizational policies. Some appraisals can be of shorter duration for new inductees and trainee
employees. IT firms and many technology-centric businesses tend to have quarterly performance
appraisals of employees. An employee's performance over the defined period is placed under
scrutiny. He is evaluated on various parameters and organization-centric metrics such as
teamwork ethic, consistency in job performance, individual performance, professional attitude,
goal orientation and targets achieved.

HR Department's Strategic Role

The HR department of an organization plays a strategic role in establishing an

organization's performance appraisal system. HR personnel and occasionally external HR
management consultants devise the structured templates, employee evaluation worksheets,
detailed questionnaires and other performance evaluation documents. Business unit managers,
supervisors and other project leaders fill up the forms, develop and scrutinize reports generated
and formally assess the employees along with the HR team. Rewards, revised compensation
packages, incentives and pay raises are then given based on the recommendations and reviews of
respective managers.
Immediate Boss/Manager's Influence

During the course of employment in an organization, most employees work under or

report to immediate supervisors or managers. An immediate boss or senior executive often has
the closest and up-front view of an employee's work ethic, specific roles and responsibilities,
capabilities and overall performance during a particular time period. The inputs, reports and
reviews of employees under her stewardship play a crucial role in an organizational performance
appraisal system and can often make the difference between a timely promotion and maintaining
of status quo.
Organizational Benefits

An effectively framed and accepted performance appraisal system showcases the

professional working standards and governance ethics of an organization. Performance appraisals
and reviews keep employees competitive and committed about their defined roles and
responsibilities. HR top management use tools and techniques in performance appraisal systems
to keep track of the regular performers and occasional laggards and nonperforming employees.
This checks-and-balances system and the cycle of rewards and benefits keep employees
motivated and impacts long-term organizational performance.
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III. Performance appraisal methods

1. Essay Method

In this method the rater writes down the employee

description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.

2. Behaviorally Anchored Rating Scales

statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages helps overcome rating
errors. Disadvantages Suffers from distortions
inherent in most rating techniques.

3. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages Raters biases

4. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages economy, ease of administration, limited
training required, standardization. Disadvantages Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings

5.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
Employees are ranked according to their
performance levels.
It is easier to rank the best and the worst
employee.
Limitations of Ranking Method
The whole man is compared with another
whole man in this method. In practice, it is very difficult
to compare individuals possessing various individual
traits.

This method speaks only of the position where an

employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
When a large number of employees are working,
ranking of individuals become a difficult issue.
There is no systematic procedure for ranking
individuals in the organization. The ranking system does
not eliminate the possibility of snap judgements.

6. Critical Incidents Method

The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.

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