Performance appraisal: This is the process of analyzing an employee's performance while comparing it to the set performance standard. It makes employees to become aware of the organizations expectations after performance evaluation which helps them in improving their performance … Undoubtedly, there are disadvantages in the performance appraisal system as nothing is ideal, but it provides a lot of useful information for the company and employee itself that can’t be acquired from other sources. Want to improve your HR performance in the new year? The next step is to build a plan to improve the performance of the workforce. Performance appraisal system is a useful management tool which helps to gain feedback, review and estimate whether the performance is effective and discuss what needs to be done for it to become so. The performance appraisal process is also popularly referred to as performance evaluation, performance review, merit rating, and employee assessment. This, in turn, motivates employees to do quality and quantity work. 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. Download our step-by-step guide to devise an effective strategy to ensure a happier and productive workforce. These plans might include further training and development, additional mentoring or more efficient goal setting. To judge the gap between the actual and the desired performance. Executing a performance appraisal process helps to highlight the skills, competencies and advance employees' development. Holding a performance review makes it easier for managers to clearly communicate their expectations. The manager needs to work with the employee to understand the cause of the unsatisfactory quality and quantity of work. The performance appraisal system helps to identify the top performers of a team. From the beginning and through the career, you need to know how good you are in terms of particular fields of activity. Delivering an employee performance evaluation for a poor performer is a difficult task for any manager. Other objectives include providing feedback, improving communication, understanding training needs, clarifying roles and responsibilities and determining how to allocate rewards. The performance appraisal is one of the most important parts of HRM system. Employees should know exactly what is expected of them. Identifying the areas of strengths and weaknesses of your workforce is just the first step. PURPOSES OF PERFORMANCE APPRAISAL  Performance appraisal helps the management to take decision about the salary increase of an employee. Typically, Performance Appraisal is aimed at: To review the performance of the employees over a given period of time. Also, it is crucial to ascertain the contributions of an employee towards the organization. The major purpose of performance appraisal is to evaluate how well employees have conducted their duty. 10, Vasant Arcade, B-7 Market, Nelson Mandela Road Vasant Kunj, 5 Tips To Make Goal Setting For Employees More Impactful, E-learning: The New Way of Employee Training, 32 Rewards and Recognition Ideas to Boost Employee Recognition. Each of the following steps is vital to the overall success of both you as the supervisor/coach and your staff member(s)/team. Purpose of the appraisal process. Facilitating Promotion Decisions. support@kpi.com, It motivates employees if supported by a good, It provides a structured process for an employee to, Performance appraisal system also helps the management in deciding about the. The organisation’s expectations of an employee’s performance are discussed. A good appraisal process will bring this about by ensuring the following elements are included. That’s because you don’t need to reprimand your employees. PA and PC are both based on a sense of reciprocity and inextricably linked through their roots in social exchange and undeniable effects on the attitudes and behaviors of employees (Maley, 2009). Definition: Employee performance appraisal system is defined a process in which a predefined standard of factors such as work knowledge, work performance, work attitude, leadership quality, team player behavior, consistency, decision making abilities and skills is created and then actual performance as well as personality of employee is compared with these expected standard by the organization. This will make employees better equipped to contribute to their organization. Performance appraisal is the systematic evaluation of employees on the basis of the quality and quantity of their job performance. Let's take a quick look at how Alice can use it for this purpose with an employee named Ben. During goal setting, you need to make it clear on what basis will the job performance be evaluated. Whichever way you look at it, performanc… It helps in gaining the competitive edge, by improving the performance level of the employees working in the organization, making rational decisions regarding hike in salaries, promotions, transfers, discharge of the employees, reducing job dissatisfaction and employee turnover. The Purpose of Performance Appraisals. A performance appraisal is an evaluation of employees by supervisors. To them, the process of evaluation is demoralizing as it is dehumanizing as unfair judgment may be made. They also include compensation decisions and the like. Consequently, the objectives of performance appraisal will help you get an idea of how an effective performance appraisal process should actually be conducted. As ne… That’s why it’s of utmost importance that we understand the objectives of performance appraisal and what it entails. Performance Appraisal Process: The Steps. Your best employees, as well as the poor performing ones, need timely feedback to reach their full potential. 2021 All rights reserved. SHRM recommends that for goal setting to be more effective: Related Article: 5 Tips To Make Goal Setting For Employees More Impactful, "There's no way to get better at something you only hear about once a year." In simple terms, performance appraisal may be understood as the assessment of an individual’s performance in a systematic way, the performance being measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgement, versatility, health and the alike. Their purpose is to identify areas for growth and improvement and inform suitable development plans; or inform administrative decisions on contractual aspects of employment (such as pay, bonuses, promotions or redundancy). It is an analysis of a staff’s recent performance, advantages and disadvantages, and suitability for training or promotion in the future. A performance appraisal is a regular review of an employee's job performance and contribution to a company. 8 Essential Objectives Of Performance Appraisal, Gets a constant update on his/her work performances. Collaborate with us to provide your employees an engaging and rewarding experience. Here is a list of the benefits of the performance appraisal system: If you use the performance appraisal system correctly and smartly, the results won’t leave you indifferent. The developmental decisions include those related to improving and enhancing individual capabilities. Subsequently, allow employees to have a say on the goal-setting process. Low performance can be attributed to the following factors: However, discussing only the negatives of someone’s work performance may lead the employee to resent you. criteria. This, in turn, helps managers to decide the type and amount of training that is required on a company-wide basis. The main objective of performance appraisals is to measure and improve the performance of employees and increase their future potential and value to the company.  The continuous evaluation of an employee helps in improving the quality of an employee in job performance. 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