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Saturday, April 17, 2010

Why Performance Appraisals ?

Article Collected by AndhraColleges.com - Education is My Passion

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Author : B. Madhura

With Lessons learnt during the Economic revival, many firms are now very cautious and have begun to focus on key elements like time, cost, quality, quantity, supervision, efficiency and good inter-personal impact among employees. Many firms are aiming at Total Quality Management to gain the competitive advantage. Organisations have realised that they do not want to comprise on the quantity of the employees but emphasis on high performers, dedicated and committed employees for all positions at all levels in their organisations. Therefore to cream out the potential competencies of employees, firms began to focus on a mechanism called as “PERFORMANCE APPRAISALS” although its evolution is traditional but in the present scenario its use is more in corporate industries. Simultaneously firms are moving ahead to take advantage by recruiting volume of candidates for implementing their projects due to which firms are also outsourcing their recruitment process. A new buzz word has been coined RPO (recruitment process outsourcing).

What is performance appraisal and why is it required?

Performance: It means outcomes/ accomplishments achieved / output/ success / satisfaction / efficiency / potential / targets achieved/ meet expectations and overall it’s the actual contribution of an individual, group or team contributed towards the organisation of long-term business goals which brings utmost satisfaction to the customers, employees, investors, shareholders, management and builds the organisation’s image.

Performance Appraisal: Appraisal is the process of evaluating the worth of an individual. It involves the identification, measurement, and management of human / employee performance in an organisation. It is essential as such many corporate industries use the performance appraisal data for various Developmental as well as for the Personnel Management decision making process. The significance of performance appraisal is as follows:

Developmental Decisions

1) Identifying training/ individual
     and developing needs of employees.
2) Potential career development.
3) Job rotation and job assessment
4) Firing and new hiring
5) Selection and placement
6) Performance feedback
7) HR planning and evaluation of HR systems
Administration Decisions
1) Reward strategies
2) Promotions, transfers and demotions
3) Salary increments
4) Annual performance awards
5) Recognition of individual performance
6) Retention, termination and layoffs
7) Sponsorship to seminars, tours and conferences.
8) Advanced training and development opportunities.
9) Outstanding performance awards.
10) Announcement in newsletters.
11) Identifying poor performance.

Today almost the performance appraisal has become a very powerful mechanism for firing process of employees where most of the organisations are tapping on the toes of the employees to give out their best to the organisation. Employees have a pressure to focus on their performance as their compensation and rewards are linked with the performance which has direct impact on them. Along side there is more of challenging task to the existing employees where the organisations are going for large recruitments there arises fear in the minds of employees about their present jobs. And it’s well-known that the performance appraisal is continuous process and there has been a paradigm shift from system to process.

From System  To Process

Appraisal - Periodic review
Output -  Output / input
Reward oriented - Development oriented
Ratings common  - Less rating
Top down - 360 degree appraisal
Directive - Supportive
Monolithic  -  Flexible
Owned by HR  -   Owned by users
Profession/  - Service based
cadre based

Performance appraisals has a paradigm shift from system to process, that enables the company to remain competitive, to develop the methods, systems and process that connect the work efforts to get the desired result, to train the employees with the appropriate skills, knowledge and behaviours to perform as required and finally to bridge the gap between the current and desired performance.


Corporates do face the following challenges of performance appraisal:

1) Establishing reward and compensation link with overall performance of employees.
2) Making managers responsible for the turnover of their employees.
3) Providing career progression and skill development opportunities.
4) Providing effective feedback and performance counselling to the employees.
5) Creation of new organisation culture of excellence.
6) Clear career path for talented employees.
7) Communication and involvement of employees.
8) Align organisation objectives to individual aspirations.
9) Debureaucratise the organisation structure.
10) Fostering team work

“I work hard but get the same treatment as the ones who do the least amount of work. I also get the same salary increase and the lowest performer also gets the same”. So why should I exert my energies unnecessarily? Why should I not be like him and enjoy life?”

It’s a common human tendency that most of the employees express the same feeling, but most of the organisations those which are in the range of gaining competitive advantage have started using specific standards or parameters for comparison and measuring the performance of the employee depending upon the tasks associated with his / her job. If not there will be a silent deterioration of human / employee productivity in the organisation thereby the organisation fails to achieve their targets and goals which lead to its closure.

Therefore the individual employees need to

• Focus on priorities assigned to each employee.
• Should have clear targets and goals associated with priorities.
• Measure their actual performance against agreed targets and goals.
• Identify and solve performance problems.

Apart from the above “self appraisal” is a must for every employee that best outlines the areas where more / less improvement is required. It’s essential, because performance appraisal is a continuous process.
Source : The Career Guide
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