Significance Of Performance Appraisal 2d6e2i

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I. Contents of getting significance of performance appraisal ================== During the hiring process, recruiters and hiring managers tell employees when and how they will receive performance appraisals. Employees trust employers to follow through on all promises -from paying employees on time to giving employees holidays off to evaluating their performance. Therefore, conducting performance appraisals is an important consideration when it comes to placing value on the company’s human capital. Compensation Salary and wage increases often are based on performance appraisal results. Untimely appraisals can throw off compensation practices and cause more work for payroll processing. In addition, employees mark their calendars for annual increases and potential bonuses. Preventable delays in delivering employee performance appraisals cause frustration among employees and additional work for payroll processing clerks responsible for calculating retroactive and pro rata increases. Satisfaction Employees look for opportunities elsewhere whenever they feel unappreciated or when they have reason to believe their employer doesn’t think highly of the work they perform. When supervisors procrastinate on performance appraisals, it conveys the message that employees aren’t important enough to set aside sufficient time to conduct evaluations. An untimely performance appraisal essentially says the work employees perform isn’t critical to the business model and that other matters take priority over employees. Human capital is your largest investment and an on-time performance appraisal is the best way to demonstrate your appreciation for an employee’s effort.

Improvement Most employees perform at an average level. If you use Jack Welch’s practice of differentiation, roughly 10 percent of your workforce is operating at a marginal level. This suggests that better than half of your workforce will need to make performance improvements at some time during the working relationship. Untimely performance appraisals further delay performance improvement. The sooner you let employees know how to improve their performance, the sooner you can see the results from improvements. Productivity Factors such as compensation, satisfaction and performance, when combined, seriously impact your organization’s productivity. Employees who exhibit signs of low job satisfaction and low employee morale are less productive. In turn, low productivity affects your company’s business cycles because it becomes difficult to meet customer demands. Like dominoes, untimely performance appraisals disrupt employee productivity, which ultimately presents obstacles in achieving organizational goals. Liability The failure to conduct a performance appraisal or to conduct a timely performance appraisal can increase your organization’s exposure to claims regarding unfair employment practices. If your supervisors and managers put off the performance appraisals, employees begin to wonder why they haven’t received an appraisal. When employees file formal complaints about discriminatory employment practices, courts may take into consideration the manner and timeliness with which supervisors evaluate employee performance.

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III. Performance appraisal methods

1. Essay Method

In this method the rater writes down the employee description in detail within a number of broad categories like, overall impression of performance, promoteability of employee, existing capabilities and qualifications of performing jobs, strengths and weaknesses and training needs of the employee. Advantage – It is extremely useful in filing information gaps about the employees that often occur in a better-structured checklist. Disadvantages – It its highly dependent upon the writing skills of rater and most of them are not good writers. They may get confused success depends on the memory power of raters.

2. Behaviorally Anchored Rating Scales statements of effective and ineffective behaviors determine the points. They are said to be behaviorally anchored. The rater is supposed to say, which behavior describes the employee performance. Advantages – helps overcome rating errors. Disadvantages – Suffers from distortions inherent in most rating techniques.

3. Rating Scale Rating scales consists of several numerical scales representing job related performance criterions such as dependability, initiative, output, attendance, attitude etc. Each scales ranges from excellent to poor. The total numerical scores are computed and final conclusions are derived. Advantages – Adaptability, easy to use, low cost, every type of job can be evaluated, large number of employees covered, no formal training required. Disadvantages – Rater’s biases

4. Checklist method

Under this method, checklist of statements of traits of employee in the form of Yes or No based questions is prepared. Here the rater only does the reporting or checking and HR department does the actual evaluation. Advantages – economy, ease of istration, limited training required, standardization. Disadvantages – Raters biases, use of improper weighs by HR, does not allow rater to give relative ratings

5.Ranking Method The ranking system requires the rater to rank his subordinates on overall performance. This consists in simply putting a man in a rank order. Under this method, the ranking of an employee in a work group is done against that of another employee. The relative position of each employee is tested in of his numerical rank. It may also be done by ranking a person on his job performance against another member of the competitive group. Advantages of Ranking Method Employees are ranked according to their performance levels. It is easier to rank the best and the worst employee. Limitations of Ranking Method The “whole man” is compared with another “whole man” in this method. In practice, it is very difficult to compare individuals possessing various individual traits. This method speaks only of the position where an

employee stands in his group. It does not test anything about how much better or how much worse an employee is when compared to another employee. When a large number of employees are working, ranking of individuals become a difficult issue. There is no systematic procedure for ranking individuals in the organization. The ranking system does not eliminate the possibility of snap judgements.

6. Critical Incidents Method The approach is focused on certain critical behaviors of employee that makes all the difference in the performance. Supervisors as and when they occur record such incidents. Advantages – Evaluations are based on actual job behaviors, ratings are ed by descriptions, is easy, reduces recency biases, chances of subordinate improvement are high. Disadvantages – Negative incidents can be prioritized, forgetting incidents, overly close supervision; may be too much and may appear to be punishment.

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