Performance appraisal system should be effective as a number of crucial decisions are made on the basis of score or rating given by the appraiser:
All organisations use performance appraisal for purposes such as salary increase, determining training needs, motivating employees or establishing a basis for future personnel decisions.
The ideal approach to performance evaluation is that in which the evaluator is free from personal biases and prejudices.
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This is because when an evaluator is objective, it minimises the potential disfunctional behaviour of the evaluator, which may be detrimental to the achievement of the organisational goals.
Given that all appraisals entail judgements and given that judgement may not always be fair, a variety of techniques to make appraisal more objective have been introduced. For an appraisal system to be effective it should possess the following essential characteristics:
Characteristics
1. Reliability and Validity:
Appraisal system should provide consistent, reliable and valid information and data, which can be used to defend the organisation – even in legal challenges.
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However, a single foolproof evaluation method is not available. Inequities in evaluation often destroy the usefulness of the performance system – resulting in inaccurate, invalid appraisals, which are unfair too.
If two appraisers are equally qualified and competent to appraise an employee with the help of same appraisal technique, their ratings should agree with each other. Then the technique satisfies the conditions of inter-rater reliability.
2. An Atmosphere of Confidence and Trust:
The existence of an atmosphere of confidence and trust is necessary to discuss matters frankly and offer suggestions for the improvement of the employee so that the organisation as well as employees stands to benefit.
3. Immediate Superior as Appraiser:
The immediate superior of the apraisee must make the ratings, but the personnel department can assume the responsibility of monitoring the system. The superior should try to analyse the strengths and weaknesses of an employee and advice him on correcting the weakness.
4. Less Time Consuming and Economical:
The appraisal programme should be less time-consuming and economical. Appraisal forms, procedures, administration of techniques, ratings etc., should be standardised. An appraisal programme should bring maximum benefit.
5. Open Communication:
The results of the appraisal, particularly when they are negative, should be immediately communicated to the employees, so that they may try to improve their performance.
A good appraisal system provides the needed feedback on a continuing basis. The appraisal interviews should permit both parties to learn about the gaps and prepare themselves for future.
6. Post Appraisal Interview:
A post-appraisal interview should be arranged so that employees may be supplied with feedback and the organisation may know the difficulties under which employees work, so that their training needs may be discovered.
Permitting employees to review the results of their appraisal allows them to detect any errors that may have been made. If they disagree with the evaluation, they can even challenge the same through normal channels.
7. Job Relatedness:
Suggestions for improvement should be directed towards the objective facts of the job. Plans for the future must be developed after consultation with subordinates. The individual as a person should never be criticised.