Explain the meaning of performance appraisal and describe its methods.

 MEANING OF PERFORMANCE APPRAISAL

Performance appraisal refers to various procedures and methods that may be used in order to evaluate the performance of an employee in an organization. Aswathappa (2015, page 322) explained performance appraisal as “an objective assessment of an individual’s performance against well defined benchmark”. Denisi et al (2014) described performance appraisal as an evaluation of an employees performance that is specific and formal in nature and it is carried out in order to ascertain whether the job allotted to the employee is being carried out by him/ her effectively.

Performance appraisal refers to various procedures and methods that may be used in order to evaluate the performance of an employee in an organization. Aswathappa (2015, page 322) explained performance appraisal as “an objective assessment of an individual’s performance against well defined benchmark”. Denisi et al (2014) described performance appraisal as an evaluation of an employees performance that is specific and formal in nature and it is carried out in order to ascertain whether the job allotted to the employee is being carried out by him/ her effectively.

METHODS OF PERFORMANCE APPRAISALS

Varied method of performance appraisal can be utilized in an organizational setup depending on the nature, financial status and size of the organization. Mamoria, Gankar and Pareek (2004) various traditional and modern methods of performance appraisal. These can be discussed as follows:

1. Traditional Methods

Let us discuss some of the traditional methods of performance appraisal.

1) Straight ranking method: This is one of the oldest and simplest methods of performance appraisal. Under this method, all the employees are compared with each other and ranked. The performance of an employee is not considered, but the employee is perceived as a whole and is compared to other employees. Numerical ranks are assigned to each employee.

2) Paired comparison technique: Under this technique each employee is compared to another employee in pairs on each trait. Rank is then assigned to each employee. Though the judgement in this case is easier than that in the previous method. It is a tedious job when a large number of employees are involved.

3) Man to Man comparison method: Under this method, a scale of a man is created for various factors like leadership, communication, honesty, hardworking etc. and then each employee is compared with this scale. Thus the employees are not compared to each other but are compared to a key man with regard to one factor at a time. However designing of such a scale is a challenging job.

4) Grading: In this method, certain categories are first established and defined, like dependability, hardworking, cooperativeness etc. and then employees are graded on the basis of these categories as per his/ her performance. Grades in terms of A- Excellent, B- Good, C- Average, D-Poor, E- Very poor may be provided to the employees.

2. Modern Methods

Some of the modern methods of performance appraisal are discussed as follows:

1) Assessment centres: Assessment centres utilise multiple methods of appraisal and multiple appraisers. It may involve an interview, a written test, a group discussion or situational exercises. The appraisers may be the higher level managers in the organization. They evaluate each employee and then a summary report is submitted. Assessment centres may be a part of the organization or may be an external agency that is hired for the purpose. Besides performance appraisal the assessment centres can be used to conduct recruitment and selection, develop training programmes and plan human resource activities.

2) 360 Degree Performance Appraisal: In this method the appraisal of a single person is created by his/ her superiors, subordinates and peers and employee himself/ herself hence the name 360 degree. The data is then collected from all the parties and suitable feedback is provided to the employee. Self assessment also helps employee understand his/ her own strengths and weaknesses in a better manner. However personal bias and rivalry needs to be avoided during such an appraisal. The employees however may not easily accept implementation of suach a method in the organization as they might be worried about the negative feedback especially from their subordinates and peers. Suitable communication, clarification and training with regard to the process of this method may help its smooth and effective implementation.

3) Management By Objectives (MBO): The method was introduced by Peter Drucker and is one of the most effective methods of performance appraisal. In this method based on the organizational goal, goals are created for each department in the organization and based on the departmental goals and the potentiality of individual employee in the department; individual goals are created for each employee after a discussion between the employee and the superior. These employees are then supervised for their progress towards the goal and suitable help and support is provided in case any problem or obstacle is faced by the employee so as to help him/ her achieve the goal assigned to him/ her. Suitable feedback is also provided to the employee from time to time. A lot of interaction and discussion is promoted by this method between the employee and the superior that enhances the overall functioning of the department and in turn of the organization. The superior plays role of a coach, mentor and counsellor . The main focus of this method is goal setting besides participant and feedback. The method is termed effective because it motivates the employees to perform better, conflicts are reduced and participation increases, role and goal ambiguity is also reduced considerably. A lot of planning is encouraged. Problems are solved faster and in time that enhances achievement of goals. The performance deficiencies of the employee are identified and measures can be taken to rectify them during the process of goal achievement.

4) Behaviourally Anchored Rating Scales (BARS): This again is one of the most effective methods of performance appraisal that involves five stages.

· Firstly it is important to generate critical incidents. The employees working on a particular job are asked to describe specific critical incidents that can take place on the job and that call for effective performance on the part of the employee.

· These incidences are then categorised in to smaller sets of performance dimensions. Each category is then defined.

· Then a group of employees are given certain critical incidents and asked to locate them as per the categories.

· The group is then asked to rate the behavior described in the incident as to how effectively or ineffectively it represents performance on the performance dimension.

· The subsets of incidents are then used as behavior anchors

Though the method is time consuming and expensive it is more accurate as it is done by experts. Clear standards are utilised and suitable feedback is provided.

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