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Meaning
• Performance appraisal is the process of assessing the
performance and progress of an employee or a group
of employees on a given job and his potential for
future development.
• According to Flippo, “ Performance appraisal is the
systematic, periodic and an impartial rating of an
employee’s excellence in matters pertaining to his
present job and his potential for a better job”
Characteristics of Performance appraisal
It is a process consisting of a series of steps.
Systematic examination of an employee’s strengths and
weaknesses in terms of the job
It is a scientific or objective study
It is an ongoing and continuous process
Uses or Importance of Performance
Appraisal
• Performance appraisal provides valuable information
for personnel decision such as pay increases,
promotions, demotions , transfers and terminations.
Thus performance appraisal serves as the basis of
suitable personnel policies.
• It helps to judge the effectiveness of recruitment,
selection, placement and orientation system of the
organization.
• It is useful in analyzing training and development
needs.
• Performance appraisal can be used to improve
performance through appropriate feedback and
counseling to employees
• Performance appraisal facilitates human
resource planning, career planning and
succession planning.
• It promotes a positive work environment
which contributes to productivity
• A competitive spirit is created and employees
are motivated to improve their performance.
• Systematic appraisal of performance helps to
develop confidence among employees
Performance Appraisal Process
1. Objectives of Appraisal:
Objectives of appraisal include effecting
promotions and transfers, assessing training
needs, awarding pay increases. The traditional
approach emphasized on correcting the
problem. But the modern or system approach
aims at improving the performance, instead of
merely assessing it.
2. Establish job Expectations:
This include informing the employee what is
expected of him or her on the job. Individuals
should not be expected to begin the job until
they understand what is expected of them.
3. Design Appraisal Programme:
This poses several questions which need answers
(i) Formal versus informal appraisal ?
(ii) Whose performance is to be assessed ?
(iii) Who are the raters?
(iv) What problems are encountered ?
(v) How to solve the problems?
(vi) What should be evaluated?
(vii) When to evaluate?
(viii) What methods of appraisal are to be used?
Performance Appraisal Methods
Methods of Appraisal
1. Confidential Report
A confidential report is a report prepared by the
employees immediate superior. It covers the strengths
and weaknesses, main achievements and failure,
personality and behavior of the employee. It is descriptive
appraisal used for promotions and transfers of employees.
Subordinate
4. Appraise the performance:
Performance is essentially what an employee does or does not do.
Employee performance common to most jobs include the following
elements:
• Quantity of output
• Quality of output
• Timeliness of output
• Presence at work
• Cooperativeness
5. Performance management:
Performance appraisal provides feedback about employee job
performance. Along with feedback 3 more activities need to carried
on :
6. Performance Interview
7. Archiving performance data
8. Use of Appraisal Data
Problems in Performance Appraisal
1. Errors in Rating: Performance appraisal may not
be valid indicator of performance and potential
of employees due to the following type of
errors:
(a) Halo Effect
(b) Stereo Typing
(c) Central Tendency
(d) Constant Error
(e) Personal Bias
(f) Spill over Effect or Recency effect
2.Lack of Reliability
3. Incompetence & Lack of knowledge
4. Negative Approach
5. Multiple Objectives
6. Resistance
Career Planning
Career planning is a systematic process by which one
selects career goals and the path to these goals.
From the organization viewpoint, it means helping the
employees to plan their career in terms of their
capacities within the context of organization's needs.
It involves designing the organizational system of
career movement and growth opportunities for
employees from the employment stage to the
retirement stage.
Individuals who can fill planned future positions are
identified and prepared to take up these positions.
Career planning is the process of matching career goals
and individual capabilities with opportunity for their
fulfillment.
Objectives of Career Planning
• To attract and retain the right type of persons in
the organization
• To map out careers of employees suitable to their
ability and their willingness to be trained and
developed for higher positions.
• To ensure better use of human resource through
more satisfied and productive employees
• To have a more stable workforce by reducing
labour turnover and absenteeism.
• To increasingly utilize the managerial talent
available at all levels within the organization
• To improve employee morale and motivation by
matching skills to job requirements and by
providing opportunities for promotions
• To ensure that promising persons get experiences
that will equip them to reach responsibility for
which they are able.
• To provide guidance and encourage employees to
fulfill their potentials
• To achieve higher productivity and organizational
development.
Steps or Process of Career Planning
1. Identifying Individual needs and Aspirations:
Human resource inventory will reveal the age,
qualifications, experience and aptitude of present
employees. Appraisal of employees is then carried out to
identify the employees having the necessary potential for
climbing up the ladder and are willing to be promoted and
to take up higher responsibilities. Such appraisal may
reveal three categories of employees:
(a) Employees who are already fit an willing to take up higher
responsibilities. These can be promoted to fill the higher
level vacancies;
(b) Employees who have the potential and willingness to take
up higher responsibilities but require more training and
experience and
(c) Employees who have the capacity to take higher
responsibility but lack the interest or desire
2. Analyzing career opportunity:
• The organizational set up, future plans and career
system of the employees are analyzed to identify
the career opportunities available within it.
• Career paths can be determined for each position
• It is also necessary to analyze career demands in
terms of knowledge , skills, experience, aptitude
etc.
• Long term and short term career goals can be
defined after relating specific jobs to different
career opportunities.
3. Identifying Match and Mismatch: A mechanism for identifying
congruence between individual current aspirations and
organizational career system is developed to identify and compare
specific areas of match and mismatch for different categories.
2. Establishment: This stage begins with search for work and includes the first
job, learning it and being accepted by peers. It is also marked by mistakes
and good performance. Employment sought in this stage is guided by what
was learnt during exploration.
3. Mid Career: At this Point in a career people may move up or reassess their
priorities.
4. Late Career: Those who continue to grow through the mid-career stage, this
stage is pleasant. One can enjoy success and respect from younger
employees. Those who have stagnated, they realize that they cannot change
the world. One starts looking forward to retirement, due to career
plateauing.
5. Decline: The final stage is difficult for everyone. After several decades of
continuous achievements, the time has come for retirement.
Career Development Initiatives
• Career Planning Workshop
Structured workshops are available to guide employees
individually through systematic self assessment of
values, interest, abilities, goals and personal
development plans. During workshops, employees are
made to define and match their specific career
objectives with the needs of the company
• Career Counseling
Career counseling helps employees discuss their career
goals in one-to-one counseling sessions. Along with
goals, other variables identified are capabilities,
interests and current job activities and performance.
• Mentoring:
Mentoring involves coaching, advising and encouraging employees
of usually lesser ranks.
• Sabbaticals:
These are temporary leaves of absence from an organization,
usually at a reduced amount of pay. These help employees in terms
of refreshing their learning and rejuvenating their energies.
• Career workbooks:
These consists of questions and exercise designed to guide
individuals to figure out their strengths and weakness, job and
career opportunities, and necessary steps for reaching their goals.
Many workbooks are tailor-made for a particular firm and can be
completed in several sessions.