Performance appraisal is an important tool for rewarding employees. It has become a common practice to consider the factors of performance of employees, maintain a fair relationship, develop employees and accept feedback from employees.
It helps understand employees’ merits and deficiencies as well as the present performance and formulation of future objectives.
Mutual goal setting is feasible with performance appraisal. It provides an opportunity to perform a worthwhile task.
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Employees are motivated to achieve mutually set goals. Employees accept appraisal results, as they are aware of the goals and performance.
Their productivity, capacities, attendance and initiatives, attitudes and behaviour are assessed by the supervisor.
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There are several techniques of appraisal of performance. The results of appraisal are informed to the employees for their improvements, rewards and motivation.
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The accumulated performance appraisal of each employee decides his performance standard. Similarly the average performance-standards of all the employees for the last five years is considered to be the performance standard of the company which is used for motivating employees who perform better than the performance standard.
This standard can be used to compare other organizational standards. Employees’ actions and reactions to the appraisal systems and appraisal outcomes are invited to provide them with adequate opportunities for motivation and development.
Self appraisal techniques are encouraged for employees’ motivation and the avoidance of distrust between the appraiser and the appraises.
Self-appraisal results in poor outcomes, because people attribute their deficiencies to situational factors.
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The strengths and weaknesses of employees are made known to them, so that they can improve themselves and promote organization development.
Performance appraisal is not free from defects. It has the deficiencies of being confrontational, emotional, judgemental, complex and inaccurate in some situations.
Employees generally do not agree with the performance appraisal of their supervisor. It creates confusion and conflict between them.
Emotional attitudes are attached to the performance appraisal, as managers are generally critical and employees are face- savers.
Nobody wants to accept his faults therefore; the judgemental aspect is not very effective. Non-performance is attributed to employees, while the real cause of deficiencies may be the non-availability of materials, methods and machines.
Biased attitudes of employees retard the real appraisal process. The supervisor or manager considers himself as the fortune-maker of the employees.
This attitude creates several problems in performance appraisal. Moreover, the appraisal system is not simple. It is full of complexities.
Many difficulties crop up while appraising performances. If both the persons, viz. superior and subordinates are rational and unbiased, the appraisal has a positive effect.
The success of performance appraisal depends on the employees’ abilities, interests and motivations.
Greater participation is feasible if the employees are educated and knowledgeable. A manager should exercise his power of appraisal with great care, so that mutual trust and confidence is not distorted.
The management has to disclose the purpose of performance appraisal, judgement-based rating techniques, procedure based job behaviour and assessment centers to the employees for the effective use of performance appraisal.