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What is Performance appraisal?

What is Performance appraisal?

According to Dick Grote (2002), "Performance is a formal management system that provides for the evaluation of an individual's performance in an organization.

The appraisal is usually prepared by the employee's immediate superior. The procedure typically requires the supervisor to fill out a standardized assessment form that evaluates the individual or several different dimensions and then discusses the result with the employee" (pg.1)

Performance appraisal is a great motivator and booster if conducted in a correct and accurate manner which gives a correct outcome of the employees.

When one thinks of performance appraisal the only thing that comes to our mind is increment. But performance appraisal is much more than that. It helps the person to realize how productive and creative the employee is, how much productive he/she can be, by what ways and through which means. (Fletcher, C. (1992). Appraisal, Feedback and Developement (4th ed.). Routledge)

Purpose of performance appraisal

There are several reasons of performance appraisal. It may be done for providing feedback to the employees as to how they are performing, what are the standards and what level of performance is expected from them. It also helps to determine who should me promoted, demoted, who will require more training and development. Its major importance lies in the fact that it encourages, motivates and helps the employees to work harder and better their performance. It gives a clear picture to the company about employee's increment, bonus, rewards and recognition and for the overall improvement in the organization. (Carol McCallum, 1993).

Performance planning

From the term performance planning we come to know that it signifies the standards which are to be set by the company for the employee who will be performing that job. It is a specification as to how the job is to be done, what way it is to be done, elements to be kept in mind and the timelines. It is an agreement between employer and employee for his responsibilities, duties, rules to be followed. It is ultimately the goal which is set by the company that the employee has to achieve. (Dick Grote, 2002)

Strategies of an organization


In organization work is planned i.e. what work is to be done, how the work is to be done and how well it is to be done. There are some of the attributes that the company wants his employee be used while performing it. As I have previously said that in the way that the a person is responsible for his job the same way is his manager responsible for the employee's work since his one of his major responsibilities is to constantly monitor how the employee is performing.

Performance elements tell employees what they have to do and the standards tell them how well they have to do it. This tells us that before an employee starts working he is aware of the standards set by the company and how well he has to achieve it. (Dick Grote, 2002)


The performance standard is a tool or an expression which helps an employee to know what he is required to do for that particular job and how well he has to do it. It is the expectation that must be met while by an individual while performing it.

(Lesley Myland 1992, pg.88

Employee participation

Employee participation is a very essential thing in performance appraisal without which it cannot work out. The managers and the supervisor should encourage the employee to participate in it by letting them know that it would be really beneficial for them as well as the company to get a clear picture of them. (Dendrise, Morrison, Shullman, Gerlach, 1981, pg.74)


  1. 360 degree feedback
  2. Management by objective or MBO
  3. Graphic rating scale
  4. Essay evaluation
  5. Performance ranking method

In human resource management 360 degree feedback is also known as 'Multi rate feedback'. It is one of the easiest forms of performance evaluation stage whereby the manager finds out his employees performance by asking question and getting feedback from employee's subordinate, peers and supervisor. Sometime the manager may also take the feedback from external sources like customer, supplier and any other person associated with the employee. It is traditional form of performance appraisal where the employees are most often reviewed only by their managers. These feedbacks are used by the managers to plan the training and development program which may be useful to increase the productivity of his employee. (Performance appraisal handbook, US Department of interior, retrieved August 12th 2009, from Delpo, amy. The performance appraisal handbook. 2nd ed. 2007.

  1. Management by objectives or MBO

Management by objective is a process of agreeing upon objectives within an organization so that management and employees agrees to the objectives and understand what they are in the organization.

The term "management by objectives" was first popularized by Peter Drucker in 1954 book "the practice of management"

The importance of this concept is to set goals, to choose a course which will help to achieve the goal which is set up and decision making. What actually happens in this process is that the employee's performance is measured and then it is compared with the performance standards which are set by the management. In this way performance is more accurately measured as compared to 360 degree feedback and also that the employee themselves have been involved in with the goal setting and the choosing the course of action to be followed by them, hence they are more to fulfill the responsibilities. ((Kevin Murphy, Jeannette N. Cleveland, 1995 pg.438)

  1. Graphic rating scale

In this form the manager simply checks the element in the rating scale and accordingly marks the employment level of performance. These scales may have 5 points or more on the rating scale and then the manager would rate him accordingly. The rating would be done by the manager by keeping in mind the employee's quantity of work, volume of work under different circumstances, quality of work, time management, accuracy, absenteeism, attitude etc.

(Kevin Murphy, Jeannette N. Cleveland, 1995)

  1. Essay Evaluation

In the essay approach, the appraiser usually prepares his/her performance appraisal just like an essay. This essay will contain all the details of employee's performance throughout the year or depending upon the time or intervals they have their performance appraisal. It will describe all his strength, weakness in his performance report.

(Methods of performance appraisal. Human resource management. Retrieved August

2th, 2009, from

  1. Performance ranking method

From the term "performance" itself we can come to know that it is the method used to evaluate employee's performance from best to worst. In this rating scale the performance of all employees are compared with each other and assign value as follows:

Rating scale of ranking

Excellent - 5

Very good - 4

Good - 3

Satisfactory - 2

Unsatisfactory - 1

(Methods of performance appraisal. Human resource management. Retrieved August 12th , 2009, from

Monitoring Employees

Communication and timely feedback during the performance appraisal period play an important role for a successful performance management program and performance appraisal.

Timely monitoring and effective feedback can make the performance appraisal program successful. As we have seen earlier, the feedback may come from anywhere, may be through peers, superior, rating official etc. hence monitoring their performance regularly can be of real importance while conducting this program.

This report which is completed with the correct information and feedback should be signed by both rating official and the employee as well.

Though while conducting performance appraisal only one such review report is necessary and it is encouraged that the rating official frequently discuss performance with the employer so he could be given timely guidance and feedback specially if the employee is not performing at "fully successful" level.

( Performance appraisal handbook, US Department of interior, retrieved August 12th 2009, from

Delpo, Amy. The performance appraisal handbook. 2nd ed. 2007.

Developing employees

The process of performance management and performance appraisal gives a vast opportunity to the manager in developing the skill, overcoming his/her difficulties etc. Developing is an important part of an organization where an employee tries to learn things which it lacks behind or in things he/she is not so good at.

Such developing program helps in areas for improving good performance and action can be taken to help successful employees to improve further.

Developing an employee program when conducted the organization should be more focused on developing employee's capacity to perform rather than just training them. (( Performance appraisal handbook, US Department of interior, retrieved August 12th 2009, from Delpo, Amy. The performance appraisal handbook. 2nd ed. 2007.


Rating of employee's performance refers to rank them according to their

Performance as to where they stand when compared to the standard of the company. It may evaluate the performance against the performance appraisal

plan and assigning a rating of record. This rating should take place after an employee has performed for a good period of time for the company.

(Performance appraisal handbook, US Department of interior, retrieved August 12th 2009, from Delpo, Amy. The performance appraisal handbook. 2nd ed. 2007.

Feedback from the employee after discussion

The employee is then allowed to write or give feedback about what they thought about their performance appraisal. If the report and the method have gone terribly wrong then the employee might openly discuss things with their manager what they felt was incorrect, inaccurate or which might reflect their performance in a negative manner. This may occur when an employee wishes to provide specific information or noteworthy accomplishment that the rating official did not include or if any other comment they wish to Include in the report. This comment is sent in the written form to the rating Official who examines it and then finds out whether the comments to be included in the report are facts and then works out accordingly.(Terry Gillen, 1998)

Action based on performance

From the title itself we come to know that action is to be taken after all the procedures are accurately and correctly done i.e. If the performance of the individual is positive then he should be rewards and recognition, promotion, salary increment etc. this helps to motivate an employee which can boost his morale up. This may result in better performance from the employee form then period onwards. It also makes an employee get a sense of belongingness in the organization which makes them feel that they are important to the organization. It will make them feel proud among their peer, subordinate and superior. Award may be given in the form of cash, time off, non-monetary items, honors awards etc.

(Lesley Mylan, 1992 pg.96)

Dealing with poor performance

In any case and any point of time during the performance appraisal, the organization comes to know that the particular individual is not performing well and not meeting the required standard, it is important that the management takes vital steps for assessing the necessary course of action. There is a vast difference between "failure" and "misconduct". Failure is generally the failure on the part of employee to perform well as per what is expected from him. "Misconduct" refers to failure to follow a work place rule e.g. absenteeism, unprofessional, destroying property etc. sometimes what happens is misconduct can lead to poor performance although the employee is capable of performing far better than what his report suggest. (Valerie Stewart and Andrew Stewart, 1982 pg 11, 17)

Counseling employees

After the stage of knowing how each individual has performed and where they stand according to the company's standard i.e. how and why the particular employee has performed poorly in his work it is necessary to communicate and counsel the employee regarding it. The counseling session should be private and uninterrupted. This will ensure the employee that no other employee in the organization becomes aware of his poor performance. In this stage the manager should note down the critical elements of unsatisfactory performance. They should then provide examples of poor performance so as to avoid direct attack on the employee for the poor performance and give suggestion in what way they could improve it. Counseling of an employee does not only imply that only the manager has to do the talking. The manager should invite the concerned employee to give feedback. Then based on suggestion and feedback the manager should make some specific plan in order to improve his performance. This plan may include action such as training, working closely to the concerned employee for a period of time, give and take of feedback. Also tell the employee about your expectation, standard of performance which are expected from him and try to keep a track from time to time.

In case the employee continues performing poorly then theye might have to be given demotion or can be removed permanently form the organization.

(Valerie Stewart and Andrew Stewart, 1982 pg 11, 17)

Benefit of performance appraisal

Employee can benefit a lot from performance appraisal. It can boost the morale of employer, motivate them, encourage them to perform better in future, give them a sense of belongingness in the company etc. in this way you can get regular and accurate feedback how your performance is going whether positive or negative. It would be wonderful to learn from your employee that you're doing a good job and also if your performance is plunging then you can immediately come to know about it so that you can start performing better in the future. The employee can also ask the manager as to how you can improve it.

While questioning and getting feedback from the manager, it can help you to build a cordial relationship with the employer. This may help you to know the employer better and vice versa. The more you know one another the greater the chances that you will be able to communicate well on ongoing bases, especially if the problem crops up. You can also discuss your future with the supervisor. This can be done by discussing how well you are working or if you are in need of more training.

(Dick Grote, 2002


It is said that everything has a positive and negative side in the management. In this case although performance appraisal is a very useful tool from the organization point of view it is surrounded by lot of controversy in it. Some have even suggested that the process is so inherently flawed that it may be impossible to perfect it (see Derven, 1990, for example). At the other extreme, there are many strong advocates of performance appraisal. Some view it as potentially "... the most crucial aspect of organizational life" (Lawrie, 1990).

Research (Bannister & Balkin, 1990)has reported that appraisee seem to have greater acceptance of the appraisal process, and feel more satisfied with it, when the process is directly linked to rewards. "Bias" is a huge factor which may make "performance appraisal" look like not a good idea for the employee. This is because the rater might submit a good or a bad report depending upon the relationship he shares with the rater..

( Performance appraisal handbook, US Department of interior, retrieved August 12th 2009, from

Delpo, Amy. The performance appraisal handbook. 2nd ed. 2007.


Is performance appraisal really important?

From both professional and personal point of view I think it is very much important and it is like the need of the day for every organization because it is the most powerful tool to ensure that the goals are achieved at the end and to keep vision, value and goals of the organization alive.

There may be a lot of individual employee whose qualification, age and other variable could be the same but their performance could be totally different from each other. This is because of the dedication they give to work, how well they give importance to quality, quantity and timeline to submit their work etc. when an employee is praised by the manager for his good conduct, the employee feels proud of them self and gives them a sense of belongingness and gets really motivated to strive harder in future.

Hence I would like to conclude by saying that "performance appraisal" is the most important tool to keep your employee on toes and working harder to strive for goals. If possible even the smallest to biggest organization should conduct it in a proper and with correct measure.

(Dick Grote, 2002 pg 226) and (Green, M. E. (2006). Painless Performance Evaluation (). Prentice Hall.)


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