Performance Appraisal

PERFORMANCE
APPRAISAL
Purnima Bhoi
KIIT School of Public Health
2020
PERFORMANCE APPRAISAL
Introduction
• Evaluation of individuals in terms of their job performance
• Employee performance appraisal is carried out within a
practical context, which is essentially the day to day business of
the enterprise. What is being assessed in the first instance is the
• Employee’s performance in carrying out the general duties of
his or her role, together with any specific targets that have
been set.
• Secondarily, appraisal may be used to assess a person’s
suitability for promotion, either generally or with a specific
job in mind
PERFORMANCE APPRAISAL
Definition
• According to Flippo, a prominent personality in the field of
Human resources, “performance appraisal is the systematic,
periodic and an impartial rating of an employee’s excellence in
the matters pertaining to his present job and his potential for a
better job.”
• In the words of Dale Yoder, “Performance appraisal refers to all
formal procedures used in working organizations to evaluate
personalities and contributions and potential of group
members.”
Contd…
• Thus Performance appraisal is a systematic process in which

employees job performance is evaluated in relation to the
projects on which employee has worked and his contribution to
the organisation. It is also known as an annual review or
performance review.
• It is a systematic way of judging the relative worth of an employee

while carrying out his work in an organization. It also helps
recognize those employees who are performing their tasks well
and also- who are not performing their tasks properly and the
reasons for such (poor) performance.
• The basic purpose of performance appraisal is to identify an
employees worth and contribution to the company. Important
factors include – attendance, efficiency, attitude, quality of work,
amount of work are just a few important factors.
• The physical or objective factors like attendance, amount of
work, efficiency can be easily measured by the records
maintained by the Human Resource Department Manager.
• However, it gets a bit icky, when it comes to measuring subjective
factors like attitude, behaviour, friendliness etc. But to properly
evaluate an individual’s performance, appraisal of both subjective
and objective factors needs to be done.
Objectives of Performance Appraisal
1. Salary Increase: Performance appraisal plays an important role in
making decision about increase in salary. Increase in salary of an
employee depends on how he is performing his job. It shows how well an
employee is performing and to what extent a hike in salary would take
place in comparison to his performance.
2. Promotion: Performance appraisal gives an idea about how an
employee is working in his present job and what his strong and weak
points are. Identification of employee strengths and weaknesses helps in
deciding whether he can be promoted to the next higher position or not.
If necessary what additional training is required. Similarly it could be used
for demotion, discharge of an employee and transfer.
Cont…
3. Training and Development: Performance appraisal gives an idea

about strengths and weaknesses of an employee on his present
job. It gives an idea about the training required by an employee
for overcoming the limitations that an employee is having for
better performance in future.
4. Feedback: Performance appraisal gives an idea to each employee
where they are, how they are working, and how are they
contributing towards achievement of organizational objectives.
5. To enable employees to improve their performance
6. To provide information for succession planning
7. Provides basis for rewarding employees
Advantages of Performance Appraisal
1) Providing Feedback-Through performance appraisal process
the individual learns exactly how well he/she did during past
period and can then use that information to improve his/her
performance in the future.
2) Facilitating Promotion Decisions - Performance
appraisal makes it easier for the organization to make good
decisions about making sure that the most important positions
are ﬁlled by the most capable individuals.
3) Encouraging Performance Improvement - How can
anyone improve if he doesn’t know how he’s doing right now? A good
performance appraisal points out areas where individuals need to
improve their performance.
4) Motivating Superior Performance - Performance appraisal
helps motivate people to deliver superior performance in several ways.
First, the appraisal process helps them learn just what it is that the
organization considers to be ‘‘superior.’’ Second, since most people want
to be seen as superior performers, a performance appraisal process
provides them with a means to demonstrate that they actually are.
Finally, performance appraisal encourages employees to avoid being
stigmatized as inferior performers (or, often worse, as merely ‘‘average’’).
5) Counselling Poor Performers - Not everyone meets the
organization’s standards. Performance appraisal forces
managers to confront those whose performance is not meeting
the company’s expectations.
6) Rightsizing or Downsizing Decisions - If promotions are

what everybody wants, layoffs are what everybody wishes to
avoid. But when economic realities force an organization to
downsize, performance appraisal helps make sure that the
most talented individuals are retained and to identify poor
performers who effects the productivity of the organisation.
7) Determining Compensation Changes - This is another classic
use of performance appraisal. Almost every organization believes in
pay for performance. But how can pay decisions be made if there is no
measure of performance? Performance appraisal provides the
mechanism to make sure that those who do better work receive more
pay.
8) Supporting Manpower Planning - Companies need to

determine who and where their most talented members are.
They need to identify the departments that are rich with talent
and the ones that are suffering a talent drought. Performance
appraisal gives companies the tool they need to make sure they
have the intellectual manpower required for the future.
9) Determining Individual Training and Development
Needs - If the performance appraisal procedure includes a
requirement that individual development plans be determined
and discussed, individuals can then make good decisions about
the skills and competencies they need to acquire to make a
greater contribution to the company. As a result, they increase
their chances of promotion and lower their odds of layoff.
10) Providing Legal Defensibility for Personnel Decisions -

Almost any personnel decision—termination, denial of a
promotion, transfer to another department—can be subjected to
legal scrutiny. If one of these is challenged, the company must be
able to demonstrate that the decision it made was not based on
the individual’s race or handicap or any other protected aspect. A
solid record of performance appraisals greatly facilitates legal
defensibility when a complaint about discrimination is made.

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PERFORMANCE

• Thus Performance appraisal is a systematic process in which

• It is a systematic way of judging the relative worth of an employee

3. Training and Development: Performance appraisal gives an idea

6) Rightsizing or Downsizing Decisions - If promotions are

8) Supporting Manpower Planning - Companies need to

10) Providing Legal Defensibility for Personnel Decisions -

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