8. Process of Performance Appraisal

 

8.1 What is Performance Appraisal?

A performance appraisal is a recurring evaluation of an employee's work performance based on the organization's competency standards. The organization's basic competencies as well as job-specific competencies are frequently evaluated in the performance review. Based on the assessment, the appraiser—typically a manager or supervisor—will give the worker constructive, useful criticism. Consequently, this gives the worker the guidance they need to advance in their position. Depending on the kind of feedback, a performance review gives the company a chance to acknowledge the accomplishments and future potential of the individual. (Terra, 2022)Performance appraisal is the process of identification, measurement and management of human performance in organization.

8.1.1 Identification

Identifying the areas of work that the management ought to assess in order to evaluate performance. We investigated a measuring system based on work analysis that is necessary for logical and legally sound identification. Therefore, rather than performance-irrelevant traits like race, age, or sex, the appraisal system should concentrate on performance that impacts organizational success. (Early performance, actual performance)

 8.1.2 Measurement

The main function of the appraisal system is to allow managers to rate the overall performance of their employees as "good" or "bad." The organization as a whole has to use consistent performance measurement. In other words, the organization's management must all uphold the same grading criteria.(Use AP and EP metrics, such as Management by Objectives)

8.1.3 Management

The main objective of any appraisal system is management. An appraisal ought to be more than just a retrospective process that grades employees according to how well they performed the year before. Instead, evaluations ought to focus on how employees may reach their potential in the company by looking ahead. This implies that supervisors have to teach employees to achieve higher performance levels and give them feedback (Gap/variance between AP and EP).

8.2 Why we need of performance evaluation

Figure 01

Requirements and Goals of Performance Evaluation

8.3 Process of Performance Appraisal

Figure 02

                                                              Steps to Performance Appraisal

8.3.1. Setting performance appraisal Objectives

To ensure the success of departmental goals and objectives as well as the organization's overarching strategy and objectives, performance criteria are established. Positions are the basis for standards; people are not. Standards must follow the same guidelines that govern goal-setting in order to be easily understood and regarded as objective: they must be "SMART" (specific, measurable, attainable, relevant, and time-bound) and also diagnose the strengths and weaknesses of individuals. Other than that,

• ·         Provide feedback to employees
• ·         Determines the training and development needs of staff
• ·         Determines awards and promotions
• ·         Decides salary increments
• ·         To inspire individuals
• ·         Give subordinates information, career planning, coaching, and counseling.
• ·         Foster goodwill and decrease complaints
• ·         Encourages HR management research

8.3.2.1 Purpose of Performance Appraisal Policy

The performance review policy's goal is to inform employees about the organization's framework, participation procedure, and performance appraisal system.

8.3.2.2 The aim of the performance review policy is-

• To ensure that each employee's performance is evaluated in accordance with the company's established standards.

• To ensure that performance evaluations are conducted on a regular basis and that performance grading is done fairly.

• To foster employee trust in the organisation's performance review process. 

8.3.2.3 Objective of Performance Appraisal policy and procedure

The long-term objective serves as the foundation for the company's performance appraisal system. The purpose of the performance appraisal policy is to:

• Educate employees about their future prospects within the organization.

• Establish a welcoming environment at work where employees can talk about their developmental goals and career objectives.    

8.3.2.1 Scope of Performance Appraisal Policy 

The company's current employees' performance can be thoroughly discussed, planned for, and evaluated through the performance appraisal system. Performance reviews have a broader purview and are relevant to all employees. All employees are required by law to get performance reviews and performance-based pay increases from the corporation

8.3.3. Establishing performance appraisal criteria (KPI)

Figure 03

Key Performance Indicators

Source-(QuestionPro, 2018)

At the top level of a company, Key Performance Indicators (KPIs) represent the subset of performance indicators that are most important to business. KPIs are a useful tool for tracking your advancement toward your strategic objective. (Jackson, 2023) In practice most common performance appraisal criteria are,

• 1.      Discipline
• 2.      Attendance
• 3.      Leadership
• 4.      Organizing
• 5.      Problem Solving
• 6.      Planning
• 7.      Integrity
• 8.      Appearance

8.3.4. Selecting of Evaluation Method

There are 5 main evaluation methods to performance appraisal

• 1.      Graphic Rating Scale Method
• 2.      Essay Method
• 3.      Critical Incident Method
• 4.      MBO-Management by Objectives
• 5.      360 Degree Feedback Model

Graphic Rating Scale Method	Essay Method	Critical Incident Method	MBO-Management by Objectives	360 Degree Feedback Model
The most straightforward and widely used method for evaluating performance. Traits and a range of performance levels for each trait are listed on a graphic rating scale.	When using the essay evaluation method for performance reviews, the manager writes an essay that addresses several employee-related topics.	Positive and negative instances (critical incidents) of a subordinate's work-related activities are recorded by the supervisor in a log.	This aims to improve the performance of an organization by clearly defining objectives that are agreed to by both management and employees. This was implemented by Peter Drucker in 1950’s	Employees that participate in the 360 Degree Feedback assessment method receive anonymous, private evaluations from their coworkers.
By circling or ticking the score that most accurately represents an employee's performance for each trait, the supervisor can assess each subordinate's attributes. The qualities' assigned values were then added together.	When evaluating an essay, the manager could respond to inquiries about the characteristics or actions of the worker.	Eg:          New Product  Best idea, awards	The objectives are established jointly by the supervisor and subordinate, self-audit to identify the skills needed to achieve the objectives.	The management obtains data on the employee's performance, usually through a questionnaire, from group members, coworkers, supervisors, and self-evaluation.
The appraiser writes a written assessment detailing the employee's strengths and weaknesses related to their work performance. It also offers a course of action to address the issues that have been identified.	The essay's assertions might speak to an employee's strengths or weaknesses.	A key work-related conduct of the employee is identified by the supervisor.	In general, do not depend on others to identify and describe your strengths, shortcomings, self-evaluation, or to determine whether your goals have been met at the conclusion of the given period.

8.3.4.1 Why is the graphic rating scale method more popular than other methods?

·         Simple to use and comprehend

The graphic grading scale approach is simple to use and comprehend. The majority of individuals have probably completed a questionnaire similar to this one before, so it doesn't really need any additional training to be implemented and is understandable by both managers and staff. It's a well-liked option for performance rating because of this.

·         Behavior quantification simplifies the appraisal process.

By quantifying behavioral attributes, this strategy makes it much simpler to identify trends, patterns, and developments in the feedback and to analyze it. It is simple to identify problem areas, take appropriate action, and monitor development. The entire appraisal process is streamlined as a result.

·         inexpensive to create

It is simple and easy to create a graphic rating scale, and many of the questions may be used to different functions within the company. This means that practically all firms can afford to use it as an employee performance method.

Figure 04

Graphic Rating Scale Method

(Jay, 2021)

8.3.5 Train evaluates

In a performance appraisal process there are few persons involve to the train elevators. Those are,

• ·         Supervisors/Managers
• ·         Self-appraisal
• ·         Team members
• ·         Subordinates
• ·         Customers

There are one way, two way and 360 degree we can divide that person decisions that impact for performance appraisal.

 For Example;

One Way - Only the supervisor wil decide the level of performance of the subordinate.

Two Way- Active participation of both supervisor and subordinate.

360 Degree-More parties are involved. Like Supervisor, subordinate, other superiors, peers and other staff

 

 8.3.6 Taking of Decisions

The discussion and/or execution of any further actions, such as a performance plan, termination, or a reward of some kind, such as a raise, promotion, or highly sought-after growth opportunity, constitutes the last phase of the assessment process. However, keep in mind that remedial measures that could assist a worker in meeting goals ought to wait until the following official evaluation. Supervisors and managers should take the time to find out why an employee's performance is falling short of expectations and assess whether more coaching or training will enable the worker to close the gap. It was previously noted that prompt action should be taken in the event that performance warrants termination. 

8.7 Reasons for fail the Performance Appraisal programs

Figure 05

Reason for fails the Appraisal Programme

Conclusion 

In summary, a performance review is a critical component of any organisation and an excellent means of documenting output. Every organisation must set goals and objectives, and all employees must participate in the process. Moreover, completing a performance review will boost staff morale and productivity. A manager can positively inform employee about their performance in carrying out their assigned responsibilities by conducting appraisals. 

References

courses.lumenlearning.com. (n.d.). Steps in the Appraisal Process | Human Resources Management. [online] Available at: https://courses.lumenlearning.com/wm-humanresourcesmgmt/chapter/steps-in-the-appraisal-process/#footnote-804-1  [Accessed 17 Dec. 2023].

@HRhelpboard. (n.d.). Sample Performance Appraisal Objective of Performance Appraisal policy and procedure l Policy template - Hrhelpboard. [online] Available at: https://www.hrhelpboard.com/hr-policies/performance-appraisal-policy.html.(Accessed date-17/12/2023)

Jay, S. (2021). Graphic Rating Scale: Pros, Cons, Examples, and Best Practices. [online] AIHR. Available at: https://www.aihr.com/blog/graphic-rating-scale/.(Accessed date-17/12/2023)

QuestionPro. (2018). Key Performance Indicators: Definition, Metrics, Report and Example. [online] Available at: https://www.questionpro.com/blog/key-performance-indicators/. [Accessed 17 Dec. 2023].

Terra, J. (2022). What is a Performance Appraisal? Methods, Process, and Everything You Should Know. [online] Simplilearn.com. Available at: https://www.simplilearn.com/what-is-performance-appraisal-methods-process-article. (Accessed date-17/12/2023)