Performance Appraisal Is Essential For Effective Management Commerce Essay

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Performance appraisal is a universal phenomenon in which the organization is making judgment about one is working with and about oneself. It serves as a basic element of effective work performance. Performance appraisal is essential for the effective management and evaluation of staff. It aims to improve the organizational performance as well as individual development.

The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago. Performance appraisals have been increasingly implemented by most modern organization as a tool for employee assessment.

Performance is an employee's accomplishment of assigned work as specified in the critical elements and as measured against standards of the employee's position. The term "Performance Appraisal" is concerned with the process of valuing a person's worth to an organization with a view to increasing it.

Traditional Appraisal system; Performance appraisal is developed as a simple method of income justification. Appraisal used to decide whether the salary of an individual was justified or not. The decrease or increase in pay depends upon employee's performance.

Modern Appraisal System: Performance appraisal is defined as a structured formal interaction between a subordinate and a supervisor that usually takes the form of a periodic interview, in which the work performance of the subordinate is examined and discussed with a view to identify weakness, strength and opportunities for improvement and skills development.

Performance-Based Actions are the reduction in grade or removal of an employee based solely on performance at the unacceptable level.

Performance Plans are the documentation of performance expectations communicated to employees from supervisors. Plans define the critical elements and the performance standards by which an employee's performance will be evaluated.

Performance Standards are statements of the expectations or requirements established by management for a critical element at a particular rating level. A performance standard may include, but is not limited to, factors such as quality, quantity, timeliness, and manner of performance

Performance Award is a one-time cash payment to recognize the contributions of an employee and is based on the rating of record. A performance award does not increase basic pay.

Performance Improvement Plans (PIP) are developed for employees at any point in the appraisal cycle when performance becomes Level 1 (unacceptable) in one or more critical elements. This plan affords an employee the opportunity to demonstrate acceptable performance and it is developed with specific guidance provided by a servicing human resources office.

Performance Management is the integrated process by which an agency involves its employees in improving organizational effectiveness in the accomplishment of agency mission and strategic goals. Performance Management consists of: performance planning, monitoring employee performance, employee development, evaluating employee performance, and recognition.

Performance appraisal system describes how agency will identify performance standards and core competencies and communicate them to employees. Periodical appraisal helps the company to compare employee's performance and to take apt decisions for further improvement. A structured business planning depends on the performance of the employee and it will be successful only when the employees are analyzing their work performance individually. The formal performance appraisal in a company is conducted annually for all staff and each staff member is appraised by their line manager. Generally employees are appraised based on the structure of the company

Annual performance appraisals evaluate the role of the employee in the organizational development and also monitoring the standard, expectations, objectives, efficiency in handling task and responsibilities in a period of time. Appraisal also helps to analyze the individual training needs of the employee and planning of future job allocation. It also help to adopt appropriate strategy based on organizational training needs. Performance appraisal analyzes employee's performance and which utilize to review the grades and modify the annual pay. It generally reviews each individual performance against the objectives and standard of the organization. Performance management creating a work environment and it is enabling the employees to perform best of their abilities. Through performance management companies are hiring efficient people .Then the company building up their skills and talents through employee development programmes.The tools like performance appraisal, performance review, and appraisal forms create the process of nurturing employee developments.

Effective appraisal considering increase in staff productivity, knowledge and contribution. Formal management procedure used the evaluation of work performance. Effective appraisal helps the employer in providing increased productivity, knowledge and contribution from the staff. These resources increase the ability to do performance consulting, measure performance improvement, and provide resultant training using internal staff, which increases self-sufficiency in performance consulting and improvement. Providing feed back about employee's job performance and the contribution of reward for their work is very essential in the smooth functioning of an organization.

Performance appraisal tries to:

Give feedback to employees to improve subsequent performance.

Identify employee-training needs.

Document criteria used to allocate organizational rewards.

Form a basis for personnel decisions-salary (merit) increases, disciplinary actions, etc.

Provide the opportunity for organizational diagnosis and development.

Facilitate communication between employee and administrator.

Purpose of Performance Appraisal.

Feed back of Performance provide an opportunity to discuss strength and resolution of performance deficiencies of an employee. Which also encouraged preparing ratings of their supervisors. Performance appraisal allows a person to grow in what ever the direction he wants to move. Employers promote positive attitude, advancement, and motivation to make the employee to understand their own special potential, and find roles that really fit well. Developing the whole-person is also an important aspect of modern corporate responsibility, and separately whole-person development is a crucial advantage in the employment market; in which all employers compete to attract the best recruits, and to retain the best staff.

The UK Employment Equality (Age) Regulations 2006, (consistent with Europe), effective from 1st October 2006, make it particularly important to avoid any comments, judgments, suggestions, questions or decisions which might be perceived by the appraise to be based on age.

Usually performance appraisal used for developmental purpose which also helps to identify the eligible person for reward. It stimulates the performance and making promotions, transfer and discharge decisions.

Aspects of Job Analysis

Job Analysis is a process to identify and determine in detail the particular job duties and requirements and the relative importance of these duties for a given job. Job Analysis is a process where judgments are made about data collected on a job. Information regarding duties and tasks, Environment, tools and equipments, external and internal relationships and the minimum requirements to perform the job are considered under job analysis.

Rating in Performance Evaluation.

Rating can be performed by the committee of several superiors, employee's peers, employees' subordinates. Apart from these self evaluation also valid. These rating are based on observation, analysis of data and records, discussion with the employee.

Problems during performance Appraisal

There are chances of opposition for valuation due to fear. If the evaluation system is poor, it will not give adequate effect. Rater's problems like leniency or harshness error, central tendency error, personal bias error, contrast error are also affecting the performance appraisal of an employee.

Each employee should evaluate by his supervisor and to discuss each other to set objectives for upcoming evaluation. This discussion should cover the review of overall progress, problems encountered, performance improvement possibilities, long term career goals, specific action plan about job description and responsibilities, employee development interest and needs, to concentrate specific areas of development, to review performance objectives and performance standard, ongoing feed back and periodic discussions

Performance appraisals are important for staff motivation, attitude and behavior development, communicating organizational aims, and fostering positive relationships between management and staff. Performance appraisals provide a formal, recorded, regular review of an individual's performance, and a plan for future development. In short, performance and job appraisals are vital for managing the performance of people and organizations.

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