Purpose of Performance Appraisal and Arguments against Performance Appraisal, Importance of Performance Appraisal

Purpose of Performance Appraisal

Provide continuous feedback

It is essential for the employers to know what performance and achievements have been made by their employees. But, it is also equally important for an employee to know where they stand, where they are going and how they are going to get there. Thus, giving feedback to employees is also a major purpose of performance appraisal.

Measure performance accurately

Every company has to set mutually acceptable criteria or performance standards so that it could compare employee’s performance with it. This helps in accurate measurement of employee’s job performance which is necessary for the company to know where it is heading towards.

Provide clarity of expectation and actual result

Every employee wants them to be told about their duties; what the organization really wants them to do. However, this is not enough to get good output from them.

They should also be told how well they have done their duties and how can they improve their performance. They should be made clear about how near they are to do their expectation.

Determine training and developmental needs

Only determining weak points is not enough. A company should also make efforts to abolish them. A properly carried out performance appraisal is a tool to determine what necessary steps are to be taken in order to help the employees in improving their performance. The increment in skills and knowledge develop an overall personality, attitude and behavior of the employees.

Provide career path

Performance appraisal works as a mirror to employees and it clearly shows what they are professionally and where they stand.

On the other hand, it helps the company in recognizing employees with potential. Companies provide career development opportunities to such employees and pave their way to a successful and stable career.

Arguments against Performance Appraisal

Creates Negative Experience: If not done right, the performance appraisal can create a negative experience for both the employee as well as the manager. Proper training on processes and techniques can help with this.

Time Consuming: Performance appraisals are very time consuming and can be overwhelming to managers with many employees. I’ve known managers who were responsible for doing an annual PA on hundreds of employees.

Natural Biases: Human assessments are subject to natural biases that result in greater errors. Managers need to understand these biases to eliminate them from the process.

Waste of Time: The entire process can be a waste of time if not done appropriately. Think about the time investment when the end result is negative. It is time wasted on all fronts.

Stressful Workplace: Performance appraisals can create stressful work environments for both employees and managers. Proper training can help to reduce the stress involved in the process.

Importance of Performance Appraisal

• To identify the strengths and weaknesses of employees to place right men on right job.
• To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.
• To maintain and assess the potential in a person for growth and development.
• To provide a feedback to employees regarding their performance and related status.
• It serves as a basis for influencing working habits of the employees.
• To review and retain the promotional and other training programmes.

Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.

Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance. Compensation packages which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority.

Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programmes. It helps to analyse strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programmes.

Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard.