Performance Appraisals As Primary Management Tools Business Essay

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All organization faces the problem of directing the energies of their staff to the task of achieving organization goals and objectives. In doing so, organization need to devise means to influences and channel the behavior of their contributions. Performance appraisals constitute one of the major management tools employed in this process. This is based on the perception of an individual's performance in a job is improved by having definite goals, feedback about their performance and complemented by an appropriate reward system.

According to business dictionary, Performance Appraisals define as a process by which a manager or consultant and evaluates an employee's work behavior by comparing it with present standards, documents the result of the comparison and uses the results to provide feedback to the employee to show where improvements are needed and why. Performance Appraisals are employed to determine who needs what training, and who will be promoted, demoted, retained or fired. Besides that, the employees merit like initiative, dependability, and personality to compare with others and ranked or rate base on their performances.

Although the performance appraisals serve several functions its primary purpose is to individual performance most often through (1) Clarifying job requirement and standards. (2) Providing feedback to the employee regarding his or her progress toward meeting these standards (3) guiding future performance by formulating an action plan and allocating rewards and opportunity.

Clarifying job requirement and standards (job requirement)

The purpose of providing feedback is to improve performance in the future for employees and team leaders. Managers able to get valuable information from their staff regarding about the employee and it will help the employee to make their jobs more productive. This process can go through by providing feedback in performance appraisals work units can identify problems that interfere with everyone's and take steps to rectify them. Besides that, it also provides an opportunity to discuss strength and resolution of performance deficiencies of an employee. By this, it will allow the employees to move in his/ her direction. The employers promote a positive attitude, advancement and motivation to make the employee to understand their own special potential and find the roles which they really fit well. This also helps the employee to develop as a whole-person which is an important aspect of modern corporate responsibility. The advantage of it is the employment market in which all employers compete to attract the best recruits and to retain the best staff.

Third purpose of performance appraisal is to guide future performance by formulating an action plan and allocating rewards and opportunity. This is where the action plan put into place. The employee should be given time frame for the implementation of the plan in the future. So that the employee can spelled out completely and know what actions should be taken and when it should implement. The organization should inform the employee regarding the plan. Therefore the employee know what is to be accomplished, once the implementation of the plan. Besides that the manager and employee should communicate on a regular basis to discuss the effectiveness of the plan.

Benefit of appraisal

Most significant benefit of performance appraisal is conducted properly by both supervisors and subordinates have reported the experiences as beneficial and positive. Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and correct existing problems and to encourage better future performance. Thus the performance of the whole organization is enhanced.


Form the employee point of view, there are several benefit that are derived. Firstly, the employee gets a very clear cut understanding of his job duties, authority and responsibility in the organization. Second, the employee is appraised of his highs and lows in performance. When the high are rewarded, the employee's morale is boosted tremendously and when the lows are reprimanded, he takes care not to repeat the same mistake in the future. For management, performance appraisals bring out the key and non-key performers. The management then takes steps to hone the key performers and develop the non-key into putting in their best. Performance appraisals identify the areas where training and development are needed.

Promotion: performance appraisal helps the supervisor to chalk out the promotion programmers for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.

Compensation: performance appraisal helps in chal

Importance of performance appraisal

A performance appraisal is very important process of human resources department for any organization are conducted to determine the net worth of all its employees. Appraisal method benefit the organization immensely because of the aim which improve the present performance of the employees and draw on the future potential.


Performance appraisal provides feedback on the employee's performance. On the basis of the obtained feedback, the organization can decide whether to promote, demote, transfer, and terminate the employee. Pay hikes and disciplinary actions can also be fixed by these. Resources for rewards are allocated by performance appraisals. These facilities communication flow, organization diagnosis and development. The superiors and subordinates both take each other as partners and work towards attainment of organizational goal and objectives.


The human resources department of the organization establishes performance criteria and standards that would eventually act as the benchmark. Then the superior who is conducting the appraisal communicates the job descriptions, targets and goal to be achieved at the end of the year to the subordinate who is being appraised. Thereafter the actual appraisal takes place and the result are tabulated by the HR department. The tabulated result are analyzed thoroughly and objectively to measure the tangible and actual performance. In the end, the organization takes corrective and remedial measures based on the result derived.


Performance appraisal methods are classified under two categories. The first category, is the individual person appraisal techniques. This studies the individual's performance in the past year. Examples of these types are annual confident report (ACRs), critical incident techniques, checklists and management by objectives (MBO).

The second category, multiple person appraisal techniques, compares the performance of all the persons working in a team. All such persons are pitted against one another. The ranking, paired comparison, forced distribution, 360 degree appraisal are all examples of this category.

Time frame

Appraisals are usually conducted once every year. Thought they may also be conducted in the event of an internal vacancy arising. A few candidates are appraised and the best one is promoted to fill in the vacancy.

Effectiveness of performance appraisal

Performance appraisal can be an effective tool if they are used in a constructive and motivating manner. The appraisal should target specific areas of weakness and strength. It is important for employees to know the areas where they are under-performing as well as the categories where they excel. A performance appraisal should be a well-thought out instrument designed to bring about a desired behavior. When you communicate with an employee using a performance appraisal, it provides an opportunity for clarification of any discrepancies.