Everything you need to know about the meaning of performance appraisal. Performance appraisal goes by various names such as performance evaluation, progress rating, merit rating, merit evaluation, etc.
Here we shall use the terms performance appraisal and merit rating to denote the appraisal of the performance of the employees of an organisation. It is a fact that people differ in their abilities, talents and aptitudes.
The differences are natural to a certain extent and cannot be removed completely by providing them education and training. There will always be some differences in the quality and quantity of work executed by various employees, since it is necessary for management to know these differences.
Learn about the meaning given by different authors like Edward Flippo, Dale Yoder, Dale S. Beach , Randall S. Schular, W.D. Scott, R.C. Clothier, W.R. Spriegel , Allan M. Mohrman, Jr., Susan M. Resnick-West, Edward E. Lawler, C. Heyel, C.D.Fisher, L.F. Schoenfeldt, L.B. Shaw, Wendell French , Peter Drucker, Nikol, Cascio and Wayne.F.
Meaning of Performance Appraisal by Different Authors
Meaning of Performance Appraisal – Definitions Provided by Eminent Authors: Edward Flippo, Dale Yoder, Dale S. Beach and Randall S. Schular
Every organisation where different strata of jobs are carried out by people of different talents. Management continuously observes the performance of personnel working in various departments. This includes technical and administrative wings of the establishment.
It is a fact that people differ in their abilities, talents and aptitudes. The differences are natural to a certain extent and cannot be removed completely by providing them education and training. There will always be some differences in the quality and quantity of work executed by various employees, since it is necessary for management to know these differences.
So as to enable the management to provide for those employees who possess better potentials may be properly developed to undertake the challenges of higher jobs or wrong placement of employees. The individual employee may also like to know his capability in respect of his performance and that can improve his performance as compared to his co-workers so that he may improve upon his own performance.
Following are some definitions of the performance appraisal:
“Performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in matters pertaining to his present job and his potential for the present job.” — Edward Flippo
“Performance appraisal includes all formal procedures used to evaluate personalities, contributions and potentials of the group members in a working organisation. It is a continuous process to secure information necessary for making correct and objective decisions on employees.” — Dale Yoder
“Performance appraisal is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for the development.” — Dale S. Beach
“Performance appraisal is a formal structured system of measuring and evaluating an employee’s job related behaviour and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organisation, and society will benefit.” — Randall S. Schular
Performance appraisal is a process by which organisations evaluate the employees’ performance. It is the systematic evaluation of the individual with respect to his performance on the job and his potential for development. It is concerned with the determination of the differences among the employees.
Meaning of Performance Appraisal- Definitions given by Famous Authors: Dale S. Beach, W.D. Scott, R.C. Clothier, W.R. Spriegel, Allan M. Mohrman and a Few Others
Performance appraisal goes by various names such as performance evaluation, progress rating, merit rating, merit evaluation, etc. Here we shall use the terms performance appraisal and merit rating to denote the appraisal of the performance of the employees of an organisation.
According to Yoder – “Performance appraisal refers to all formal procedures used in working organisations to evaluate contributions and potential of group members.”
This definition reveals that performance appraisal is a formal programme in an organisation which is concerned with not only the contributions of the members of the organisation but also aims at spotting their potential.
Performance appraisal is the systematic evaluation of the individual with respect to his performance on the job and his potential for development. It is concerned with determining the differences among the employees working in the organisation. Generally, the evaluation is done by the individual’s immediate superior in the organisation and who is reviewed in turn by his superior.
Thus, everyone in the organisation who rates other is also rated by his superior. Performance appraisal employs rating techniques for comparing individual employees in the work-group, in terms of personal qualities or deficiencies and y the requirements of their respective jobs.
A Few Definitions of Performance Appraisal:
Performance appraisal is ‘the systematic evaluation of the individual with respect to his performance on the job and his potential for development.’ – Dale S. Beach
Performance appraisal is ‘the process of evaluating the employee’s performance on the job in terms of requirements of the job.’ – W.D. Scott, R.C. Clothier, and W.R. Spriegel
Performance appraisal is ‘the process of defining expectations for the employee performance; measuring, evaluating and recording employee performance relative to those expectations; and proving feedback to the employees.’ – Allan M. Mohrman, Jr., Susan M. Resnick-West, and Edward E. Lawler
Performance appraisal is ‘the process of evaluating the performance and qualifications of the employees in terms of the requirements of the job for which he is employed, for the purposes of administration including placement for promotion, financial rewards, and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally.’ – C. Heyel
Meaning of Performance Appraisal – By Strauss, Sayles and Flippo
Appraisal and evaluation both are used synonymously in most of the cases as the two, more or less, carry the same meaning. However, for the purpose of distinguishing and identifying, sales evaluation can be defined as measuring the performance effectiveness of sales people while performance appraisal is the measurement of effectiveness and potentialities of sales managers or executives. Like sales person, sales managers or sales executives are subject to periodic appraisal. Periodic appraisal of managerial personnel is an essential need especially in big corporations to design or redesign the management development programmes.
Performance evaluation of salespeople is conducted by the sales management, whereas the performance appraisal of sales managers or sales executives is done by top management in the organisation. Strauss and Sayles have asserted -“In the typical large company, every manager is subject to periodic appraisal of his performance”.
According to Flippo, there is no choice with the firm as to whether or not it should appraise its personnel and their performance. It is therefore, an essential function of the management to appraise its executives including sales executives quantitatively and qualitatively. Such appraisal may be made either by the top management or by the personnel management on behalf and under authority of top executive in large companies.
Managerial personnel appraisal is generally used at two occasion. One, initial appraisal made at the time of selecting the managerial personnel for training and the other, promotional appraisal or potential appraisal generally carried out at the time of promotion at higher post. The main purpose of initial appraisal is to find out, if the individual has an aptitude for the job in which he is being trained.
In companies, where there is no programme for management training before placing the personnel on the job, the worth of the new incumbent is appraised on the job during probation period. Promotional appraisal aims at locating and identifying personnel for promotion to higher job from within the organisation. Their performance on the present job and potential for higher job are appraised and they are finally selected for higher job.
Performance appraisal of sales executives has the following objectives:
(i) A well planned appraisal plan is necessary to locate and identify, personnel, who may be promoted to higher job from within the organisation. Individuals, who have potentials for promoting to, higher jobs selected are eligible for selection.
(ii) Talents and capabilities of the old and the new executives may be located for their future development.
(iii) The utility of the existing development programmes for executives may be evaluated and assessed, whether there is a need of modification in the programme.
(iv) The worth of each executive may also be evaluated taking into account the job requirements.
(v) Top executives may have a comparative view of the capabilities of the executives in the same cadre.
(vi) The performance appraisal of sales executives is useful not only to evaluate their overall performance, but also facilitates the management to form a rational transfer, policy in the best interest of the concern.
Performance appraisal of sales executives is virtually a control device in the hands of management, and also evaluates the sales department indirectly. Hence, performance appraisal is a must in the organisation as a control device.
Meaning of Performance Appraisal – Definitions Propounded by Dale Yoder, C.D. Fisher, L.F. Schoenfeldt, L.B. Shaw, Wendell French and Heyel
“Right man in right place at right time.” paves smooth way to achievement of organisational goals. This can be done only by assessing the capabilities of available men, supported by evaluation of jobs. First part of this relates to personnel i.e., human resource while the later relates to the nature of jobs to be undertaken. The first part is performance appraisal while the second job evaluation. Thus evaluation of jobs and evaluation of personality should never be mixed up.
Right man is a person who possesses the quality and ability to perform the job entrusted to him, upto the standards. As such before entrusting a job to a person or a group of persons their abilities need to be assessed. This assessment of ability and evaluation of personality of a person is known as ‘Performance Appraisal.’ This assessment and evaluation is made in the context of the jobs to be entrusted. If we go a step ahead we can say that performance appraisal is the assessments of the capabilities of performing certain job.
Ones performance at a given job is affected by his attitude towards work, foresight, approach to the task, expertise, technical knowledge and its application, the atmosphere in which to work, internal as well as external environment, co-workers, subordinates along with their approach etc.
Thus while judging the ability to perform, all these matters are required to be given due consideration. Most of these relate to individual’s personality. It is often observed that an individual who possesses rich academic knowledge is not able to apply it to the job and vice-versa.
Naturally in order to have good results, such persons are required to be subjected to training. This, in turn, acquaints them in the matter of atmosphere, environment etc. Thus performance appraisal is not aimed at achievement of goals in better way but it is aimed at all round development of workers. Which is automatically translated in better achievement of goals.
Any organisation before undertaking any task is required to assess the potential of those who are to perform that task. Performance appraisal is a mechanism by which this can be assessed. If the capabilities of the employees are not to the domestic or of global standards it will be very difficult for the organisation to stand to the competition.
It, therefore, becomes obligatory for the organisation to locate the deficiencies, lacunae etc. in the workers so that remedial measures can be taken to remove them and further raise the capabilities and efficiency of the workers.
This can be done primarily by assessing the performance i.e., performance appraisal. This enables the management to know the comparative worth of the workers and as a motivation to development, competent and efficient employees are rewarded.
The term and process of performance appraisal is explained by various elites as follows:
“Performance appraisal includes all formal procedures used to evaluate the personalities, contributions and potential of group member in an organisation. It is a continuous process to secure information required for making correct and objective decisions on the employees.” – Dale Yoder.
“Performance appraisal is the process by which an employee’s contribution to the organisation during a specific period is assessed.” – C.D.Fisher, L.F. Schoenfeldt, L.B. Shaw
“Performance appraisal is the formal systematic assessment of how well the employees are performing their jobs in relation to established standards and communication of that assessment to employees.” -Wendell French
Performance appraisal is the process of evaluating the performance and qualifications of the employees in terms of requirement of job for which they are employed and for the purposes of management and administration i.e., placement, selection, promotion, financial rewards and other actions that require differential treatment among the member of the group as distinguished from actions affecting all other members. – Heyel
Meaning of Performance Appraisal
Performance appraisal is a term which was taken as synonym to merit rating. This is true to some extent, but in modern world total approach to this phenomenon is changed. Previously merit rating was practiced to locate employees deserving promotion, rewards, placement etc.
No doubt all these things are done today also. But apart from this, performance appraisal, now days, is aimed at finding out lacunae and deficiencies in employees so that corrective measures by way training, orientation, refreshers are taken by the organisation for overall development of all the employees.
Previously merit rating was restricted to hourly paid workers so as to select them for regular employment. Performance appraisal is, now-a-days, made applicable to all level employees including technical, professional as well as managerial. Thus, it is, now, accepted that any human being occupying whatsoever level post, is an important part of the organisation structure and assumes same importance and therefore development of all level employees is essential.
During yesteryears merit rating was aimed at determining the qualifications, increment in wages and promotion. But performance appraisal not only determines the above but more stress is given on development of employees and to provide emotional security.
In modern world performance appraisal evaluates results, achievements and performance as against personal characteristics. Techniques adopted for performance appraisal are moved on to critical incidents, group standards, mutual goal setting etc.
Meaning of Performance Appraisal – With Important Features
Performance refers to the degree of accomplishment of the tasks that make-up an individual’s job. It indicates how well an individual is fulfilling the job demands. Often the term is confused with effort, but performance is always measured in terms of results and not efforts.
Performance appraisal is an objective assessment of an individual’s performance against well-defined benchmarks. It is a method of evaluating the behaviour of employees in the work normally including both the quantitative and qualitative aspects of job performance.
In simple words, performance appraisal may be understood as the assessment of an individual’s performance in a systematic way, the performance being measured against factors such as — knowledge, quality and quantity of output, leadership abilities, dependability, cooperation, judgement, adaptability, etc.
Some of the important features of performance appraisal are as follows:
i. Performance appraisal is the systematic description of an employee’s job-related strengths and weaknesses.
ii. The basic purpose is to find out how well the employee is performing the job and establish a plan for improvement.
iii. Appraisals are arranged periodically according to a definite plan.
iv. Performance appraisal is a continuous process.
Performance appraisal is not job evaluation. Performance appraisal refers to how well someone is doing the assigned job. Job evaluation determines how much a job is worth to the organisation and, therefore, what range of pay should be assigned to the job. Job evaluation is a technique to rank jobs in an organization on the basis of the duties and responsibilities assigned to the job.
Definition of Performance Appraisal – With Detailed Process of Performance Appraisal System
Performance appraisal system is essential for effective management and evaluation of the workforce. It involves a periodic (annual or semi-annual) interview between the subordinate and the appraiser. The interview helps in measuring the strengths and weaknesses of the appraisee. It also provides an opportunity to the subordinate to work on his weaknesses and improve as well. Today, the performance of every individual matters for any organization to succeed. In short, performance management has become a very critical area of the HR.
The process of measurement of the performance of employees at work is termed performance appraisal. It is a structured formal process of assessing an employee’s performance based on a pre-decided set of standards. Each employee is appraised by his or her immediate supervisor. Workers are appraised by their line supervisors, directors are appraised by the managing director, and the managing director is appraised by the chairman or company owners. This varies and depends on the size and structure of the organization.
Performance appraisal, if performed objectively, develops motivational impacts for individuals. It enables the management to monitor the standards, achieve agreed expectations and objectives, and delegate responsibilities and tasks to the concerned employee. Whatever the nature of the job, it must be appraised and measured, because unless it is measured, it cannot be monitored.
Performance appraisals are typically linked with the organizational annual pay and grading reviews. They commonly coincide with the business plans of the organization for the next trading year. Performance appraisals generally review each individual’s performance against the objectives and standards set for the next financial year. This is usually agreed upon in a previous appraisal meeting.
It is also essential for career and succession planning—for individuals, critical jobs, and for the organization as a whole. Performance appraisals are important for employee motivation, attitude building, behaviour modification and development, communicating and aligning individual and organizational aims, and fostering positive relationships between management and employees. In general, they help in taking the organization towards success.
Appraisals should not be considered daunting or time-consuming. For many, it is also considered as a difficult and an emotionally-challenging process. It is an essential requirement of every organization, and it is for the HR to take this function seriously.
A performance appraisal system, if properly structured, can achieve and contribute a lot of information to the organization. It should be objective and transparent for short-term, medium-term, and long-term.
Definition:
Performance appraisal is the systematic evaluation of employee’s behaviour in the work place which includes employee’s job performance and his potential for growth and development.
The essential characteristics of this system are:
1. Set the standards of the job;
2. Evaluate the actual performance of employee on the job;
3. Provide feedback to the employee.
Actually the performance appraisal is not the evaluation of performance of job but the evaluation of performance of employee on the job. Its focus is on employee’s development. The performance appraisal system may be formal or informal. The formal system is to be fair and objective while informal system is to be subjective and influenced by personal factors.
In this system there may be two type of persons involved:
1. Appraisee – The person whose performance is going to be appraised by other person.
2. Appraiser – The person who is going to evaluate the performance of appraise. The appraiser may be a superior, subordinate, peers, self-appraisal, and group.
What is Performance Appraisal?
According to Peter Drucker, “an organization is like a tune, it is not constituted by individual sounds but by their synthesis. The success of an organization will therefore depend on its ability to measure accurately the performance of its members and use its objectivity to optimize them as a vital resource.”
Organization are run and steered by people. It is through people that goals are set and objectives are realized. The performance of an organization is thus dependent upon the sum total of the performance of its members. Performance appraisal refers to all those procedure that are used to evaluate the personality, the performance and the potential of its group members.
Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually take the form of periodic interview – annual or semiannual, in which the work performance of the subordinate is examined and discussed, with a view of identifying weaknesses, strengths well as opportunities for improvement and skills development.
The outcome of behavior – Behaviour is individual activity where outcomes of behaviour are the way in which the behaving individual environment is somehow different as a result of his or her behaviour.
A process is a set of interrelated activities. As a process, performance appraisal encompasses activities such as steps taken to prepare, inform, fix the venue and layout, introduce, review and measure, formulate action plan, and extend managerial support from the point of view of the appraiser.
These are discussed here:
1. Prepare:
Prepare all materials, mutually agreed tasks, current job description, and records of performances, achievements, incidents, previous performance appraisal documents, etc., and all that is relevant to the performance and achievement. Remember that appraisals should focus on helping the ‘whole person’ to grow and attain fulfilment aimed at getting a ‘total quality person’. Appraisals are not just about job performance and job skills training; it can go beyond the organizational boundary. Get to know what your people are good at outside of their work.
Sometimes, people’s natural talents and passions often contain significant overlaps with the skills that are required for the job assigned to them.
2. Inform:
The appraisee must have prior information about the time and place of the appraisal. He should be given a chance to gather data related to his performance and achievement. The appraisee should also be informed if the appraisal form does not follow a natural order for the discussion.
3. Venue:
Plan a suitable venue that is private and free from interruptions, where you and the appraisee can interact.
4. Environment:
It is important to create a situation that is relaxing and comforting for the appraisee, preferably with a meeting table in between. It is believed that face to face sitting should be avoided. Avoid sitting on your (boss’s) chair. Ideally, the appraisee should be sitting humbly on the other side of the desk.
5. Introduction:
Start the formal introduction with a smile, be warm and friendly, and open with a positive statement. Enquire about his hobbies, areas of interest, and discuss them. For example, you may talk about one-day international matches, if the appraisee is interested in cricket. It is a good idea to forecast the approximate length of the session.
6. Review and Measure:
Review the activities, tasks, objectives, and achievements but do not review the person. As far as possible, be objective. The manager must concentrate only on hard facts and figures, and avoid any opinions.
7. Formulating an Action Plan:
An action plan should be formulated in consultation with the appraisee to fulfil his career aspirations, taking into account the job responsibilities, and the identified strengths and weaknesses. The plan should be realistic covering short, medium, and long-term aspects.
8. Extend Managerial Support:
An employee needs managerial supports such as aids to work, tools and techniques, suitable work environment, knowledge inputs, mentoring, counselling, etc.
Meaning of Performance Appraisal – Definitions given by Cascio and Wayne.F
‘Appraisal’ means estimating the worth of something.
Performance appraisal, involves:
i. The identification,
ii. Measurement, and
iii. Management of human performance in organizations.
i. Identification:
Identification refers to determining what areas of work a manager needs to examine when measuring performance of an employee. The appraisal system, should hence, focus on performance that affects organizational success rather than performance-irrelevant characteristics such as – race, age or sex.
ii. Measurement:
Measurement refers to making managerial judgments of how ‘good’ or ‘bad’ the employee performance was. Good performance management must be consistent throughout the organization. That is, all managers in the organization must maintain comparable rating standards.
iii. Management:
Management is the overriding goal of any appraisal system. Appraisal should be more than a future-oriented activity rather than a past-oriented one. This implies that the appraisal process should take a view of what workers can do to achieve their potential in the organization rather than criticize or praise them for their performance in the preceding year. Therefore, the managers must provide workers with feedback and coach them to higher levels of performance.
‘Performance appraisal’, also known as – ‘performance evaluation’ ,’merit rating,’ ‘efficiency audit’, ‘performance assessment’, and ‘annual confidential report’, is a process of recording assessment of employees’ performance, potential, and development needs. It is also defined as – “the systematic description of the job-related strengths and weaknesses of an individual or a group” (Cascio, Wayne.F, ibid).
Performance appraisal provides an opportunity to look back and find out how well employees have functioned during the reporting period and then look forward to their likely achievements in the future.
Performance appraisal refers to evaluating the performance (current and/or past) of an employee relative to his/her performance standards. The concept of performance appraisal is as old as that of organization itself. An organization is created when a group of people get together to work towards the achievement of common goals and satisfaction of their needs.
As members of the organization, they are required to achieve certain objectives through the use of organizational resources. How well they have been successful in this effort is found out through appraisal of their performance.
Performance appraisal can also be viewed as an exercise in observation and judgment which is used to encourage, motivate, and help employees to improve their performance. Appraisers observe employees’ performance, form judgment about the worth of their work and give them feedback.
Employees are also helped to overcome their shortcomings by suggesting to them alternative ways of behaving or recommending training programmes for them or providing them other development opportunities. Appraisers thus become both judge and counsellor to the individual employee.
Performance appraisal is a contentious and unpopular activity of human resource management. It is contentious because employees do not readily accept their manager’s assessment about their performance, and managers feel uncomfortable when they have to defend their judgment.
It is unpopular because managers do not want to play the role of a judge; besides, they have feelings of guilt if their evaluation is critical of their employees’ performance. Negative feedback is also likely to demotivate employees and managers have to bear its brunt.
In a general sense, however, performance appraisal can be viewed as a bridge between an organization and its employees. It requires a free flow of information between managers and employees about the results achieved by employees and their behaviour on the job.
This exchange of information can help in identifying aspirations and potential of employees, providing information for improving performance and determining grant of rewards and punishments.