What is Performance Appraisal? Everything to know
Updated on Feb 21, 2023 | 8 min read | 5.7k views
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Updated on Feb 21, 2023 | 8 min read | 5.7k views
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Most companies employ performance appraisal as a standard practice to pave the path to business success. It is referred to as a quarterly or annual assessment of employee performance in the context of the company’s objectives. It aims to succeed both employees and the company. The outcomes of a performance appraisal method help the company determine promotions to be provided to employees and identify key areas where they need improvements.
In other words, it is an objective practice of evaluating the employee’s performance and encouraging them to improve it. It identifies their strengths and weaknesses and guides them accordingly. You can consider it the process of acquiring, investigating, and recording the details about the employee’s relative worth to the organisation.
The appraiser (usually a manager or a supervisor) will provide the employee with positive, actionable feedback depending on the assessment. Consequently, the employees gain enough guidance to hone their skills in their job.
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Let’s look at the key objectives of performance appraisal in HRM:
The common objectives of performance appraisal in HRM are discussed below.
This is one of the best methods of performance appraisal in HRM because it comprehensively analyses the employees’ performance, as implied by its name. It entails feedback from the employee, manager, other team members, and sources. It focuses on leadership and character capabilities.
It considers inputs from various sources before conversing face-to-face with the employee. Moreover, this method rates each employee as per their job done in the context of the assigned job description. The ability to provide an enlarged picture of an employee’s performance adds to the popularity of this method. One drawback of this method is that it risks allowing performance appraisal by outside sources who may not be acquainted with how to provide positive feedback.
This method provides a “Yes” or “No” checklist based on a set of characteristics. If a supervisor considers that the employee has a trait, a “Yes” is ticked. On the other hand, if they find that the employee has not demonstrated a trait, a “No” is ticked. The checklist is left blank if they are uncertain.
The two greatest benefits of this method are its simple format and focus on work-centric behaviours and tasks. Its drawbacks are that it doesn’t feature a detailed investigation of employees’ performance and how they fulfil the organisational goals.
This method assesses employees’ quantity and quality of work on a graphic scale. The scale depicts various units of a specific characteristic or behaviour related to an employee’s work performance.
It is based on a set of criteria that a manager uses to assess an employee’s performance. The criteria are subjective; hence, a measured score can be calculated after each review.
One of the benefits of this method is that it considers various criteria ranging from job duties to behavioural characteristics. Another benefit is that an employee appraisal’s outcome can be balanced due to the weighted system. The drawback is that it may be difficult to distinguish between a good and a poor result. The managers must clearly explain the rating system.
This method’s example is assessing a trait like job-specific knowledge on a range (like average, excellent, or unsatisfactory) or a number basis (1,2,3, and so on). The company’s requirements determine the list of criteria to be appraised.
This method states that the evaluator rates the employee based on critical incidents and the employee’s behaviour during such incidents.
This method’s advantage is that it weighs both positive and negative traits. Hence, it provides an unbiased review of the employee’s performance. This method’s drawback is that the supervisor needs to list the critical events and the employee behaviour whenever they happen.
An example of a positive trait includes working overtime to fix a device. An example of a negative trait includes damage to a device owing to noncompliance with safety practices.
It proves to be one of the best methods of performance appraisal in HRM when a company plans to assess employees’ performance considering the myriad of performance criteria. Its alternate name is the “Free Form Method”.
It describes the employee’s performance considering various traits of the employee. The superior judge these traits and includes them by supporting relevant evidence and examples. In this method, the evaluator may occasionally be unbiased when evaluating the employee’s performance.
In this method of appraisal in HRM, employees individually carry out their performance assessment based on a set of criteria.
One of the benefits is that it allows employees to stay organised for their performance appraisal. Another benefit is that it comprehensively discusses the employee’s performance. This method’s drawback is that it is subjective, so employees may rate themselves either too low or too high.
The following practices can help a company achieve the best performance appraisal in HRM:
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Performance appraisal is crucial to conduct, both for the organisation and the individual, irrespective of the company’s type and size. It helps the company determine the employees’ performance and potential. Moreover, it guides them to improve their performance by offering monetary benefits for their contribution and training sessions to further strengthen their skills. The choice of the appropriate performance appraisal method helps a company to effectively achieve its proposed objectives.
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