Curious About Performance Appraisals? Let's Explore How Leading Companies Do It

Understanding Performance Appraisal

Organizations are run and steered by people. It is through people that goals are set and objectives are realized. The performance of an organization is, thus, dependent upon the sum total of the performance of its members.

Definition of Performance Appraisal (PA)

PA is "a systematic evaluation of an individual with respect to performance on the job and the individual's potential for development." It is a developmental tool used for the all-round development of the employee and the organization. Performance appraisal (PA) refers to all those procedures that are used to evaluate the personality, performance, and potential of its group members. Evaluation is different from judgment.

The performance is measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, cooperation, judgment, versatility, and health. Assessment should be confined to past as well as potential performance. The second definition is more focused on behaviors as a part of assessment because behaviors do affect job results.

Types of Performance Appraisal

Performance appraisal could be informal or formal. Informal performance appraisal is a continuous process of feeding back information to the subordinates about how well they are doing their work in the organization. The informal appraisal is conducted on a day-to-day basis.

The formal performance appraisal occurs usually annually on a formal basis and involves the appraisee and appraiser in finding answers to the following questions:

- What performance level has to be achieved during the period?
- Has it been achieved?
- What has been the shortfall and constraints?
- What are we going to do now?
- How will we know that we have done it?
- What kind of feedback can be expected?
- What assistance can be expected to improve performance?
- What rewards and opportunities are likely to follow from the performance appraisal?

Informal appraisal should not be perceived merely as a casual occurrence but as an important activity and an integral part of the organization's culture.

Purposes of Performance Appraisal

Performance appraisal has been used for the following three purposes:
- Remedial, Maintenance, and Development

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Sriwidh

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