How and When to appraiseAlthough in day-to-day work, supervisors continually appraise their subordinates, the daily appraisal lacks summation and objectivity. To overcome these deficiencies most organisations opt for periodic appraisals through the process of ‘Performance Appraisal’, either annually or semi annually. In addition ‘Special Appraisals’ may also be carried out at the end of an employee’s probation period or at the time of his promotion. Some important points to be kept in mind while carrying out appraisals are:-

  • Frequency of appraisal must satisfy the purpose for which they are being made.
  • Special appraisals must be made at the end of employee’s probationary period or at the time of his promotion.
  • More frequent appraisal may be required for new employees.
  • In the case of an unsatisfactory rating the subsequent appraisal is generally carried out earlier than usual to assess whether the employee has improved.

Who Should Appraise

Performance appraisal is essentially a command function; hence it should be carried out by line managers.  HR managers should only be involved only in coordination of the activity. Traditionally appraisal is carried out by one or more superiors in the line channel; however they may also be carried out by peers, subordinates or even by the employee himself. In certain cases clients/customers are also involved in the process of appraisal.

What Should be Appraised

Every organisation has to decide upon the aspects to be appraised. Generally, the aspects to be apprised are determined on the basis of job expectation and established a plan for improvement. The aspects to be appraised may be in the form of personal attributes/characteristics of the employee, his contribution to organisational objectives like production, savings in terms of cost, return on capital etc. The aspects to be covered in appraisal may vary with the purpose of appraisal and type and level of employees.

Purpose Served by Performance Appraisal

1.    Identifies personal attributes or characteristics of each employee. (elaborate)

2.    Helps to assess performance of each employee and their contribution to the organisation during the concerned period.

3.  Identifies strengths and weaknesses of employees and assists in formulation of appropriate programs for their training and development

4.    Serves as a feedback to the employees. It lets the employees know whether his performance meets the standard expected from them and what improvements are desired.

5.    Establishes an effective monitoring system in the organisation whereby the superiors and executives are required to be more observant of their subordinates because they will be required to periodically fill in the appraisal forms and would be called upon to justify appraisals made by them.

6.    Serves as a tool to identify potential in employees for promotion to higher position or for transfer to another more suitable job.

7.    Enables evaluation of policies adopted for recruitment, selection and placement as well as the policies adopted for training and development.

8.    Leads to maintenance of permanent records of attributes, characteristics and performance of all employees, thereby avoiding subjective judgment by based only on personal knowledge at the time of taking important decisions.

Essentials of a Good Appraisal System

1.    It should be simple i.e. easy to understand and should not be very long and time consuming. It should not be excessively verbose or use ambiguous terms and phrases.

2.    The system must be explained to and accepted by employees at all levels.  All employees must be convinced that the system essential for their own betterment and in overall organisational interest.

3. There are various methods of ‘Performance Appraisal’. A method that works well for one company may not work for another. An organisation must adopt the method which conforms to their requirements and is most suitable considering the organisation’s structure and operations.

4.    There can not be one common ‘Appraisal Form’ for all level of employees.  Separate forms should be used for different levels of employees.    Each form should be prepared keeping in mind specific requirements of that particular level.

5.    The appraisal method adopted should be both valid and reliable. Validity of appraisal method is the degree to which it is truly indicative of the intrinsic attributes and characteristics as well as the standard of performance of each employee. Reliability of the appraisal method is the consistency with which the appraisals are made, either by different appraisers or by the same appraiser. Performance of an employee may vary from time to time but his basic – intrinsic attributes and characteristics can not change.

6.    Appraisal should be based on performance of the employee only during the period of review, i.e. without any consideration of his past performance.

7.    The appraisal must clearly bring out whether the employee is fit for promotion, the jobs or positions in which he can be suitably employed and also recommendations for training that the employee is required to be provided.

8.    The system must be just and equitable.  It should duly protect rights and interests of the organisation as well as of the individual employees.

9.    To prevent subjective reporting and vindictiveness every employee must be appraised by at least two or more persons.

10.  All negative/adverse remarks must be conveyed to the employees and he should be provided an opportunity to represent against the same. A formal procedure must be established to process any such representations.

11.  The appraisal system must be periodically evaluated, reviewed and modified to retain it’s validity, reliability and effectiveness.

Reasons For Failure of Performance Appraisal.

1      Unclear Objective.  An appraisal does not serve its purpose when the appraiser is not clear about objective or aim of the appraisal leading to highlighting of irrelevant aspects of the employee’s performance and exclusion of crucial aspects.

2      Strictness or Leniency.  Based on individual perceptions many appraisers are either too strict or too lenient. This leads to imbalance in appraisal pattern in the organisation. In an organisation an appraiser who is very strict may give five points out of ten to an employee who deserving seven. In the same organisation if there is another appraiser who is very lenient, he may give seven points to another employee who is less efficient and deserves only five points.  In such a situation because of strictness/ leniency of appraisers less efficient employee may be promoted.

3      Central Tendency.  This is opposite of strictness and leniency.  An appraiser having central tendency tends to avoid giving high or low points and instead rates all employees as average.  This leads to failure of appraisal system as all the employees, good, bad and average, end up with same raring.

4      Biased Appraisal.   It occurs when appraisal is influenced by individual differences like age, sex, caste, race, personal likings/relations etc.

5      Halo Effect.  The problem occurs when rating of one trait of the ratee is influenced by the appraiser’s favourable opinion of some other trait. For example an employee who is very well behaved may be rated high for sincerity even if he is actually not very sincere.   Another example of halo effect is that influenced by good or bad performance of an employee in one aspect of the job, an appraiser may rate him high or low in other aspects of the job e.g. an employee who is good in machine operating may be reported as good in maintenance also.  Halo Effect also occurs when influenced by good performance of an employee in the past the appraiser rates him high even though his performance during the period of review was average or below average.

6      Pitch Fork Effect.  This is exactly opposite of Halo effect. It occurs when an employee who has performed well during the period of review is given low grading because of his substandard performance in the past.  Similarly because of poor performance in one aspect, an employee may receive overall low grading or low grading in other aspects as well.

7      Recency Error.  Appraiser is supposed to honestly appraise performance of the employee for the entire period of appraisal. However, at times, instead of giving equal weightage to performance over the entire period, appraisal is influenced by happenings/occurrences in the recent past.  Such an error is called recency error.

8      Length of Service Bias.  It occurs when the appraiser thinks that employees having more experience or longer service are better and irrespective of their performance tends to rate them higher.

9      Competitive Appraiser.  Some appraisers compete with other appraisers in the organisation in giving higher rating than others leading to excessively inflated appraisals. Such appraisers are called competitive appraisers.

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