Is Performance appraisal effective tool to measure employee’s performance or only HR Formality?

Employees are assets of company. Companies annually held performance appraisal to measure employee’s performance to know who is performing well in the organization. Before going in details need to know what performance management & performance appraisal process is. Performance management & Performance appraisal, both are two things.

Performance Management is a series of activities to ensure that the organization gets the performance it needs from its employees.

Performance appraisal is the process of determining how well employees do their jobs relative to a standard and communicating that information to them.

Performance management starts with development & understanding organizational strategy. It is a series of steps that involves identify performance expectation, providing performance direction, encouraging employee’s participation, assessing job performance and conducting performance appraisal.

A Successful performance management system allow managers to better prepare employees to tackle their work responsibility by focusing on their activities and giving guidance how to achieve the targeted work or complete the work in given period or before. Interestingly even well- intentioned employees do not know what is expected or how to improve their performance.

Performance Appraisal process:

Performance appraisal is held annually in organizations, there are few company where it is held half yearly. Question are asked on below given scales in appraisal form. There are some common performance measure on basis of it performance appraisal are proceed.

Quantity of output

Quality of output

Timeline of output

Presence/ attendance on job

Efficiency of work completed

Effectiveness of work completed

There are some information related to trait based, behavior and result based are considered during performance appraisal.

Treat based information:

Attitude

Team work,

Initiative

Effective communication

Creativity.

Behavioral based Information

Ethics, 

Timeline of response

Verbal persuasion

Behavior with colleges and managers.

Result based information

Unit produced

Improved quality

Sales volume (for sales executive)

Through self-evaluation form all above information are measured. All organization do not follow same method for employee’s appraisal. There are many methods used for Performance appraisal.

Methods for Performance appraisal.

Self-rating.

Team /peer rating

Out sider rating

Multisource /360- degree feedback

Employees rating of managers.

Appraisal interview

Mostly companies follow the below methods for employees appraisal. There are two cases.

Case -1 Employees are given self-evaluation form to complete and rate themselves and return to reporting managers, Reporting manager will look over and call employee to discuss about, after all, he gives his comments and signed and send back HR  Manager.

Case-2 In some organization evaluation forms are directly given to reporting manager and he evaluates himself and send back to HR manager. Employees do not know what rating has been given to him.

Simple term for defining appraisal standard

Scale-5 outstanding (performance)

Scale-4 Exceed Expectation (performance)

Scale-3 Meet Expectation (performance)

Scale-2 below Expectation (performance)

Scale-2 Unsatisfactory (performance)

Performance feedback

There are few companies which give appraisal feedback to employees. Without appraisal feedback which area employee will focus to improve? A feedback gives a clear indication about employee’s strong and poor points to improve which mostly company never do. This process continue for years.

Outcome of Performance Appraisal.

On the basis of performance appraisal companies decides to pay increase, to promote or demote employee, provide training, Employee’s development, dismissal etc. when time came for salary increment or for promotion than mostly companies promote the employees who  are near and dear to him. For those companies which cannot proper follow the performance appraisal, it can be say that performance appraisal is only HR Formality for those organizations.