Performance Appraisal and Management

Performance Appraisal

Performance appraisal is a formal process of evaluating an employee's job performance. It involves assessing strengths, weaknesses, and areas needing improvement.

Performance Management

Performance management is a continuous process of setting goals, monitoring progress, providing feedback, and developing employees to improve their performance.

Performance Appraisal Methods

1. Self-Assessment: Employees evaluate their own performance.
- Advantages: Employees gain self-awareness, ownership, provides insights into their perception of strengths and weaknesses
- Disadvantages: Potential for bias, may not be objective, employees might underestimate or overestimate their performance
2. 360-degree feedback: Multiple sources (managers, peers, subordinates, and sometimes even customers) provide feedback on an employee's performance.
- Advantages: Comprehensive view of performance, diverse perspectives, fosters development, identify blind spots.
- Disadvantages: Time-consuming, potential for bias or conflict, requires careful design and implementation, potential for "trolling" feedback
3. Forced Ranking/Ratings: Employees are ranked or rated relative to each other by performance.
- Advantages: Clear performance levels, easy to implement, helps comparison and benchmarking
- Disadvantages: Can potentially create negative impacts on employee morale and cooperation, can be quite subjective and stressful, potential for manipulation and bias, encourages competition over collaboration.
4. Narrative Essay: A detailed written description of employee performance, highlighting strengths, weaknesses, and goals.
- Advantages: Detailed feedback, deep insights, constructive criticism, individual growth
- Disadvantages: Time-consuming for supervisor, subjective if not standardized, relies on writing ability, requires skill in feedback giving and receiving
5. Behavioural Anchored Rating Scale (BARS): Ranks employees based on specific behaviours on a scale.
- Advantages: Objective assessment, clear expectations, performance based, focus on specific issues, good for consistent outcomes, improve performance accountability.
- Disadvantages: Time-consuming in development and implementation, may not be applicable for all job roles, requires clear behavioral examples, costly setup

Benefits of Performance Appraisal

To the Manager:*
Increased understanding of individual staff strengths and weaknesses.
Improved communication and feedback techniques.
Identification of training needs within the team.
To the Employee:*
Clarification of employee expectations and roles..
Provision of constructive feedback to encourage development and growth,.
Recognition of achievements and accomplishments.
To the Organization:*
Improved overall team performance through improved individual performance, enabling the organization to meet its goal.

Major Decisions from Performance Appraisal Information

Promotion Decisions: Identify high-performing employees for advancement based on their contributions.
Training and Development Plans: Identify specific skills gaps to address through training programs.
Compensation Adjustments: Adjust salaries or bonuses based on performance levels.
Termination Decisions: Establish the basis for assessing whether to move an employee to a different position or to terminate their employment.

Challenges in Performance Appraisal

Bias: Unconscious prejudice or preconceived notions impacting evaluations.
Lack of clarity in performance standards: Poorly defined expectations regarding performance.
Limited or inaccurate information from raters: Ineffective performance measurement tools, unreliable information from reviewers, inconsistent evaluation criteria, poorly designed evaluation forms.
Communication issues between manager and employee: Poor feedback techniques, inability to have a dialogue between the employee and the evaluator.

Performance Appraisal Process Steps

a. Plan:* Goal-setting for employees aligned with organizational goals. Define roles and responsibilities.
b. Develop:* Coaching, training, and mentoring to enhance skills and knowledge. Provide necessary tools and resources.
c. Perform:* Daily tasks, projects, and responsibilities performed according to the planned goals and objectives.
d. Assess:* Gathering and evaluating performance data, considering accomplishments and improvement.
e. Review:* Summarizing outcomes, discussing feedback, establishing goals for the future, and documenting results formally.