Performance Appraisal The history of performance appraisal is quite brief.

Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the fie ld of modern human resources management. As a distinct and formal management procedure used in the evaluation of work per formance, appraisal really dates from the time of the Second World War - not mor e than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world's second oldest profession! There is, says Dulewicz (1989), "... a basic human tendency to make judgements a bout those one is working with, as well as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured syste m of appraisal, people will tend to judge the work performance of others, includ ing subordinates, naturally, informally and arbitrarily. The human inclination to judge can create serious motivational, ethical and lega l problems in the workplace. Without a structured appraisal system, there is lit tle chance of ensuring that the judgements made will be lawful, fair, defensible and accurate. Performance appraisal systems began as simple methods of income justification. T hat is, appraisal was used to decide whether or not the salary or wage of an ind ividual employee was justified. The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of ap praisal. If was felt that a cut in pay, or a rise, should provide the only requi red impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed. For example, early motivational researchers were aware that different people wit h roughly equal work abilities could be paid the same amount of money and yet ha ve quite different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates were important , yes; but they were not the only element that had an impact on employee perform ance. It was found that other issues, such as morale and self-esteem, could also have a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejec ted. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time. Modern Appraisal Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic intervie w (annual or semi-annual), in which the work performance of the subordinate is e xamined and discussed, with a view to identifying weaknesses and strengths as we ll as opportunities for improvement and skills development. In many organizations - but not all - appraisal results are used, either directl y or indirectly, to help determine reward outcomes. That is, the appraisal resul ts are used to identify the better performing employees who should get the major ity of available merit pay increases, bonuses, and promotions.

By the same token, appraisal results are used to identify the poorer performers who may require some form of counseling, or in extreme cases, demotion, dismissa l or decreases in pay. (Organizations need to be aware of laws in their country that might restrict their capacity to dismiss employees or decrease pay.) Whether this is an appropriate use of performance appraisal - the assignment and justification of rewards and penalties - is a very uncertain and contentious ma tter. Basic Purposes Effective performance appraisal systems contain two basic systems operating in c onjunction: an evaluation systemand a feedback system. The main aim of the evaluation system is to identify the performance gap (if any ). This gap is the shortfall that occurs when performance does not meet the stan dard set by the organization as acceptable. The main aim of the feedback system is to inform the employee about the quality of his or her performance. (However, the information flow is not exclusively one way. The appraisers also receives feedback from the employee about job problems , etc.) One of the best ways to appreciate the purposes of performance appraisal is to l ook at it from the different viewpoints of the main stakeholders: the employee a nd the organization. Employee From the (1) Tell (2) Tell Viewpoint employee viewpoint, the purpose of performance appraisal is four-fold: me what you want me to do me how well I have done it

(3) Help me improve my performance (4) Reward me for doing well. (from Cash, 1993) Organizational Viewpoint From the organization's viewpoint, one of the most important reasons for having a system of performance appraisal is to establish and uphold the principle of ac countability. For decades it has been known to researchers that one of the chief causes of anizational failure is "non-alignment of responsibility and accountability." -alignment occurs where employees are given responsibilities and duties, but not held accountable for the way in which those responsibilities and duties performed. What typically happens is that several individuals or work units ear to have overlapping roles. org Non are are app

The overlap allows - indeed actively encourages - each individual or business un it to "pass the buck" to the others. Ultimately, in the severely non-aligned sys tem, no one is accountable for anything. In this event, the principle of account ability breaks down completely. Organizational failure is the only possible outc ome. In cases where the non-alignment is not so severe, the organization may continue to function, albeit inefficiently. Like a poorly made or badly tuned engine, th e non-aligned organization may run, but it will be sluggish, costly and unreliab le. One of the principal aims of performance appraisal is to make people account able. The objective is to align responsibility and accountability at every organ izational level. Advantages and Disadvantages of Performance Management Advantages

1. Performance Based Conversations Managers get busy with day-to-day responsibilities and often neglect the necessa ry interactions with staff that provide the opportunity and offer performance fe edback. A performance management process forces managers to discuss performance issues with employees. Its affects changed behaviors and employee development. 2. Targeted Staff Development If work is well, a good performance management system can be a positive way to i dentify developmental opportunities and can be an important part of a success pl anning process. All employees are on a development journey and it is the organi zations responsibility to be preparing them for increasing responsibilities. 3. Encouragement to Staff Performance appraisals are wonderful things an employee does over the course of a year and should be an encouragement to staff. 4. Rewards Staff for a Job Well Done If pay increases and/or bonuses are relate to the performance appraisal process, staff can see a direct correlation between performance and financial rewards. T his motivates and encourages employees to performance at higher levels. 5. Under-performers Identified and Eliminated; An effective performance appraisa l process can help identify and document underperformers, allowing for a smooth transition if the relationship needs to be terminated. 6. Documented History of Employee Performance Its a very important that all organizations keep a performance record on all empl oyees. This is a document that should be kept in the employees HR file. 7. Allows for Employee Growth Motivated employees value structure, development and a plan for growth of employ ees. An effective performance management system can help an employee reach thei r full potential and this is positive for both the employee and manager. A good manager takes pride in watching an employee grow and develop professionally. Disadvantages 1. Time Consuming It is recommended that a manager spend about an hour per employee writing perfor mance appraisals and depending on the number of people being evaluated, it can t ake hours to write the departments PA but also hours meeting with staff to review the PA 2. Discouragement If the process is not a pleasant experienced, it has the potential to discourage staff. The process needs to be one of encouragement, positive reinforcement of a years worth of accomplishments. It is critical that managers document not only issues that need to be corrected, but also the positive things an employee does throughout the course of a year, and both should be discussed during a PA. 3. Inconsistent Message If a manager does not keep notes and accurate records of employee behavior, they may not be successful in sending a consistent message to the employee. We all s truggle with memory with as busy as we all are so it is critical to document iss ues (both positive and negative) when it is fresh in our minds so we have it to review with the employee at performance appraisal time. 4. Biases It is difficult to avoid biases out of the PA process and it takes a very struct ured, objective process and a mature manager to remain unbiased through the proc ess. Performance appraisal rater errors are common for managers who assess perf ormance so understanding natural biases is important to fair evaluations. Uses of Performance Appraisal Performance improvement; Manager use it to improve the employee action in job pe rformance. Compensation Adjustment; Performance evaluation help to determine who should rec eive pay raises. Many organization increase the bonuses on the basis of merit w hich determine through performance appraisal Placement Decision; Promotion, transfer, and demotions are usually based on past or anticipated performance. Often promotion are a reward for a past performance Training and development need; Poor performance need retraining otherwise good p

erformance developed. Career planning and development; Performance feedback creates a path to takes a career decisions about specific employees. Staffing process deficiencies; it indicates good or bad strength or weakness in the personal departments staffing procedure. Informational inaccuracies; Poor performance may indicates errors in job analysi s information human resource plan, or other parts of personal management informa tion system. Job design error; Poor performance arise job design errors appraisal help to rem ove them Equal employment opportunities; Accurate performance appraisal the actually meas ure the job related performance. External challenges; some time performance is affected by factor outside the wor ks environment, such as family, financial health or other personal matters if th ese factors are uncovered through appraisal the human resource department may be able to provide assistance. Feedback to Human resource; Good or bad performance throughout the organization indicates how well the human resource functions is performing. Performance measure; Performance measure also may be objective or subjective. Objective performance measure; indicates of job performance that are verifiable by others and usually quantitative. Subjective performance measure; it is based on personal standards opinions of th ose doings the evaluation and are not verifiable by others.

Performance appraisal process Managers often dread performance appraisals like the plague, but done correctly they can actually be enjoyable and productive. Performance appraisals are one of the least liked and most dreaded responsibilities that any manager has to endur e. They're worse than terminations. After you fire someone, they're gone; but af ter a performance review, they're still around. Staring at you. Resenting you. C hallenging you and sometimes even subverting your ability to manage the group. S ome managers will go to great lengths to avoid doing reviews. I'm of a different opinion. I believe that performance management can be an enjo yable and rewarding process. Yes, I said enjoyable. I'll go so far as to say tha t I think performance management can be as enjoyable as the Thanksgiving Day Par ade. Keep that thought in mind as I describe a six-step approach (use the acrony m PARADE to remember it) that can alleviate much of the worry and dread associat ed with performance management. Step one: Preparation The key to success in any endeavor is preparation. In this case, preparation mea ns sitting down and creating objectives for the performance period. We've got to ensure that people know what's expected of them if we ever expect them to achie ve it. Think of setting objectives as a road map with a set of directions. The road map is your organization, or your industry, and the directions lead employees to th eir goal. If people don't know where they're going, how can we ever expect them to get there? How will they know when they've arrived? It's also critical to get employees' input on their own objectives if we want to increase their commitmen t to achieving those goals. If people feel that they have a voice in their assig nments, they will frequently work harder toward the success of those assignments .

Step two: Assessment A critical manager responsibility is assessing and giving timely feedback to you r staff on their performance. There are many benefits to doing this. Feedback on performance that is given as soon as possible has proven to be the most effecti ve. It's not fair or effective to tell someone how she messed up, or (more rarel y) how well she did, weeks after the job is done. Let people know quickly so the y can either address the error or replicate the success. This also addresses two of the most common fears that managers have about perfor mance appraisals: confrontations and surprises. Many managers avoid delivering p erformance reviews because they fear confrontation. They see it as an "us versus them" event. This is usually a result of a lack of communication between the ma nager and staff. If the performance review is the only time that managers talk with staff about h ow they're doing, and especially if employees feel that this one meeting has tre mendous impact on their salary increases, the meeting takes on enormous proporti ons. With all the tension in the room, how can it be a successful interchange? M ost employees, when questioned as to what the once-a-year review reminded them o f, responded, "A trip to the principal's office." Ongoing communication througho ut the year is the key to reducing the fear and anxiety associated with this mee ting for both participants. When asked what they want out of the performance review meeting, both managers a nd staff most often respond, "No surprises." This is what I hear even more often than a hope for the highest rating. Not everyone expects to be a superstar, but people want to know how they are doing. They don't want to have it sprung on th em at the last minute, when they no longer have the opportunity to do anything a bout it. They want to be treated with respect and as partners throughout the per formance cycle. Continuous assessment and feedback is the key to ensuring that there are no surp rises, which of course also lessens the likelihood of a confrontation. Surprises beget confrontations. Communication prevents them. Step three: Reviewing documents Before you actually do sit down with the employee, review all your documentation from the year. Take a look again at the objectives that you and the employee ag reed to and documented at the beginning of the year. Look for any commendations or letters you may have received about the employee during the year. Review your notes from the meetings that you've had with the employee. Then sit down and write the first draft of the performance review. Some organizations off er the employee the opportunity to create a first draft as well. Then the manage r and the employee sit down to review the employee's progress before the actual review. This keeps the employee involved in the process and makes him feel that he's getting a fair evaluation. It's another great technique for reducing or eli minating surprises. Step four: Appropriate setting Make sure that you have an appropriate setting in which to deliver the appraisal . The most commonly used location, a manager's office, is often the worst place. It's not neutral territory (remember that principal's office analogy), and no m

atter how much rapport-building you do or how long you've worked with the employ ee, it's still "your turf." A conference room is often best, but if that's not available, find some other pl ace. Be creative. The cafeteria may not seem like a very private place, but in b etween mealtimes, it's often possible to find a secluded table in a corner. You want the setting to relax employees, not add to their anxiety. This is one reaso n to avoid restaurants. Some managers choose to do appraisals over lunch. It's a way to reward the employee, but restaurants at lunch are far from private. Even employees who expect positive reviews seldom feel particularly hungry when they go into this meeting. Consider meeting in the employee's office if it has a door, or borrowing a colle ague's office. Meeting somewhere other than your office also makes it easier to end the meeting. Getting someone out of your office when the review is completed , particularly if the person thinks there is more to discuss, can be particularl y onerous. It tends to reek of dismissal. This can undercut even the most positi ve of appraisals. Step five: Deliver it clearly Deliver the appraisal in simple language. Don't use code or jargon, and don't mi nce words. Don't dance around the issue at hand even if the appraisal is not as positive as the employee might have hoped. She'll pick up on your discomfort lik e a shark sensing blood in the water. If she feels that you're not confident in your appraisal, she may think that there is a last-minute chance to improve it. This isn't a meeting to renegotiate the objectives or the standards for performa nce that were set at the beginning of the year. This advice on clarity goes for both good news and bad! When it comes to good ne ws, some managers avoid it because they're afraid to tell an employee she has do ne a good job. "What if I have to fire her someday?" they ask. I tell them that if the employee has done a good job, tell her so. If you have to fire that emplo yee someday, you will have a good reason why. You'll be able to explain it to th e employee because you will have developed the necessary communication skills. More often, managers feel a need to hide the bad news. They're afraid to hurt th e employee's feelings, they fear an argument, or they just don't like to talk ab out someone's shortcomings. Many managers feel that if the employee hasn't done as well as expected or hoped, this is a poor reflection on the manager. If someo ne's performance has been subpar, managers owe it to the employee, the organizat ion, and themselves to inform the employee. By glossing over employees' performance deficits or inflating their ratings to s pare their feelings, managers are actually exposing the company and themselves t o great liability. If managers have been doing the assessment and feedback throu ghout the year, there is little likelihood that there will be any confrontation or conflagration at the review meeting. Tell people straight out what they've do ne well and where they need to improve. They'll respect you for it, and your cre dibility and standing as a manager will rise because of it. Step six: Encouragement At the conclusion of the performance appraisal meeting, which also marks the end of one performance appraisal cycle and the beginning of the next, your job is t o encourage. You want to motivate the employee to continue doing that which he d oes well and to improve in the areas where there is room for growth. This is the best way to make these meetings productive and positive. Even if the person's a

ppraisal has not been as high as he might have hoped, remind the employee that h e is still valued and that you'll support him in his development. Offer to set up a separate meeting at which you will discuss his development pla n. This is a terrific way to let the employee know that you support him and are willing to invest your time and the organization's training dollars in his growt h in the company. The performance management process is actually the organizatio n's best retention tool. Too often, when employees get a less-than-stellar appra isal, they take it as an indication that this is the beginning of the end. This is the first step on that dreaded "Documentation Trail" that can only lead to th e door. Let them know that you believe in them and their ability to improve. You r willingness to work with and invest in them is a wonderful turnaround tool to effect an attitude adjustment. Prepare to manage performance by carefully setting objectives. Assess and give f eedback on performance throughout the year. Review all pertinent documentation b efore meeting with the employee. Appropriate place to deliver the appraisal away from interruptions or distractions. Deliver the appraisal clearly, allowing for the employee to respond in a dialogue. Don't mince words or use code. Encourage employees to do more of what they do well and improve where they can. Make them feel valued.

METHODS OF APPRAISAL Broadly all the approaches to appraisal can be classified in to following: 1. Past-oriented methods 2. Future oriented method. 1.PAST ORIENTED Rating Scale Check Lists Forced Choice Method Forced Distribution Method Critical Incident Method Behaviorally Anchored Scale Field Review Method Performance Tests and Observations Annual Confidential Report Essay Method Cost Accounting Approach Comparative Evaluation 2. Management By Objectives 360 Degree Appraisal Psychological Appraisal Assessment Centers FUTURE ORIENTED