Introduction
It is identified that the human resource is one of the most valuable asset of an organization (Kateřina et al, 2013). The overall performance of an organization is almost depending upon the performance by its members (Toppo & Prusty, 2012). Therefore, the performance of the individual employees plays a major role within the organization. The ‘Performance Evaluation’ or ‘Performance appraisal’ are used to determine the levels of the employee within employee’s scope. In addition to that it is identified that the reward decisions are depend on the performance evaluation results of the employees (Kamphorst & Swank,2012). The importance and the effectiveness of the performance appraisal will be discussed for the organization.
Performance appraisal
Performance appraisal is a tool which used by the organization to assess the performance of an employee against the standards and the objectives which defined by the organization. The process of performance appraisal will be helpful to improve the performance of the employees as well as the organization by increasing the productivity, quality and the attitudes of the employees towards the organization (Samuel, 2013). It is recommended to do a performance evaluation or a performance appraisal in every organization for the betterment of the employees as well as the organization (Mishra, 2013). The performance appraisal can be clearly identified as one of the tools that calculate the individual overall contribution to the organization through an assessment (Azeez, 2017). The performance appraisal methods can be different from one organization to another. Some organizations will use manual methods such as marking the performance on papers and get it approved, and some organizations will use ERP (Enterprise Resource Planning) systems to do the performance appraisal in a digital manner.
The performance appraisal can be categorized as two forms, formal and informal (Kateřina et al). Informal procedure is where the superior monitors the employee during the work process and formal procedure is where the organization follows a systematic method. According to Rao (1985) the important components of a performance appraisal are identified as key performance areas, self-appraisal, performance analysis, performance ratings and counseling (Kolawole et al, 2013). In addition for these components according to Ali and Opatha (2008) states that in an organization there are few dimensions considered in performance appraisal. Those are objectives, policies, criteria and standards, appraisal form and procedure, training of appraisers, feedback discussion interview, and procedure for ensure accurate implementation. The formal performance appraisal will be usually done in few different steps. The first step will be the self-appraisal where the employee himself is giving the ratings. Then the higher management will do a specific interview to measure the ratings of the employees, and the performance appraisal ratings will be reviewed.
As Hornqren (2002) express there should be a better relationship between the organizational goals and the employees’ goals. The performance appraisal process needs to be aligning with this relationship.
Figure 1 – Relationship between organizational goals and employees’ goals
Reference
Ali, MHM & Opatha, HHDNP 2008, 'Performance Appraisal System and Business Performance: An Empirical Study in Sri Lankan Apparel Industry', Sri Lankan Journal of Human Resource Management, vol. 2, no. 1, pp. 74-90.
Kamphorst, JJA & Swank, OH 2012, 'The Role of Performance Appraisals in Motivating Employees', Tinbergen Institute Discussion Paper, vol. 1, no. 1, pp. 1-25.
Kolawole. Olabode, T. Komalafe, IT, Adebayo, AA & Adegoroye, AA 2013, 'Appraisal system: A tool for performance in selected organizations in Nigeria', International Journal of Sociology and Anthropology, vol. 5, no. 7, pp. 249-261.
(Source: Ali et al, 2012)
As the above diagram displays the efforts by the individual employee, organizational outputs, organizational goals and the rewards are linked with the performance appraisal. As an example the performance appraisal process of a leading telecommunication organization can be taken. Most of the modern organizations are using ERP systems to do their performance appraisal process. Therefore, with just few clicks an employee can see the overall performance appraisal process and the results with the comments via the ERP system. According to the organization circular No 06/2018 by the acting CEO the major steps which this organization has mentioned for a performance appraisal can be listed as the following image.
Figure 2 – Acting CEO circular No 06/2018
The above plan is for a mid-year performance appraisal. According to the plan the first step is for the self-evaluation. Then there will be an interview where superior checks the performance levels of the subordinate in various categories. Finally, the performance ratings will be updated on the ERP and the employee can see all the comments and the results through the ERP system where the performance appraisal process makes more transparent.
Reference
Ali, MHM & Opatha, HHDNP 2008, 'Performance Appraisal System and Business Performance: An Empirical Study in Sri Lankan Apparel Industry', Sri Lankan Journal of Human Resource Management, vol. 2, no. 1, pp. 74-90.
Kamphorst, JJA & Swank, OH 2012, 'The Role of Performance Appraisals in Motivating Employees', Tinbergen Institute Discussion Paper, vol. 1, no. 1, pp. 1-25.
Kateřina, V. Andrea, S & Gabriela. K 2013, ‘Identification of Employee Performance Appraisal Methods in Agricultural Organizations’, Journal of Competitiveness, vol. 5, no. 2, pp. 20-36.
Kolawole. Olabode, T. Komalafe, IT, Adebayo, AA & Adegoroye, AA 2013, 'Appraisal system: A tool for performance in selected organizations in Nigeria', International Journal of Sociology and Anthropology, vol. 5, no. 7, pp. 249-261.
Samuel, B 2013, 'The origin, concept and value of performance appraisal, International Journal of Economics, Commerce and Management, vol. 1, no. 2, pp. 1-17.
Toppo, L & Prusty, T 2012, 'From Performance Appraisal to Performance Management', IOSR Journal of Business and Management (IOSRJBM), vol. 3, no. 5, pp. 1-6.
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ReplyDeleteVayanga, you have managed to critically analyse on Performance Appraisals and its influence on employees and organizations, which is a vital element in the Human Resource Management of any organization. Several articles have revealed that Performance Appraisal has also managed to develop teamwork and encouraged employee loyalty. However, Agyare et al., (2016) have stated that Performance appraisal is confronted with definite challenges and likewise it has also been criticized by various researchers and authors mainly on assessment criteria, assessment faults and other areas which in-cumber on effective performance appraisal. Therefore it is important that organization pay more attention on implementing an effective performance appraisal system.
ReplyDeleteThank you for commenting Bernadine. As you have mentioned too, employee motivation is one of the major outcomes which can be achieved through a better performance appraisal process. The performance appraisal creates a motivation within the employee to develop themselves and to improve their performance (Akinbowale et al, 2013). When the employees are motivated, the productivity will also get increased.
DeleteHi Vayanga, it’s an Interesting blog to read on Performance Appraisal system in an organization. As you have very well laid out in your blog, Performance Appraisal process evaluate an employees’ strength and weakness easily.
ReplyDelete(Lyster and Arthur, 2006) further mentions, if an effective performance job to happen an organization cannot simply handout forms and expect managers to create an outstanding analysis of employee performance. It is a process that requires planning, training and suitable implementation and execution. The performance review must also incorporate review and analysis of whether the system an organization adopts works effectively.
I agree with you Ruwini, yes the performance appraisal should be a systematic process. It should not be just a set of forms. According to Mishra (2013), performance appraisals are for the betterment of the employer as well as the employee. Therefore yes, what you have mentioned is correct. To achieve the betterment the process cannot be just describes in a set of forms. It should be more systematic.
DeleteIn any organization its employees should be graded from the best to the worst for the purpose of mainly, compensation, rewards, training needs, and disciplinary action. And "performance appraisal" is on of the main tools that successfully asses and evaluates an organizations employees' , provided the tool is applied in an ethical and a transparent justifiable manner. the blog discuses the topic in a comprehensive manner, relevant to its topic.
ReplyDeleteFurther,Nickols (2007,p-13) suggests that “the typical performance appraisal system devours staggering amounts of time and energy, depresses and demotivates people, destroys trust and teamwork and, adding insult to injury, it delivers little demonstrable value at great cost”. Therefore, it is vital to implement an appraisal system which does not challenge other working individuals to Couse de motivation due to non transparency, biasness and stereo typing. where the results will be devastating.
Hi Chaminda, thank you for your thought. The reward decisions are mainly depend with the performance appraisal (Kamphorst & Swank,2012). I accept that point. And further as you said it is important not to demotivate employees with the negative performance appraisal results.
DeleteHi Vayanga, you have sufficiently covered the topic of performance appraisal and its impact to the employees and the organization. As you have highlighted in your blog, performance appraisal is a major component of any performance management system and effective performance management includes not only performance appraisals but also activities such as reward for the performance, training, succession planning (Banks and May, 1999; Bulger, 1995).Hence, according to Abraham et al.(2001), it is evident that all the organizations are not appraising managerial competencies as part of their performance appraisal which is another important aspect for any organization to consider in their performance appraisal processes.
ReplyDeleteThank you for commenting Dinuka. Yes, if a performance appraisal is carried out, a reward system also should be there to motivate the employees. Performance evaluation should not be just another test. It should give a results for the organization and the employee. In here according to Toppo and Prusty (2012) the mangers should not give negative judgments or the negative rewards on employees as it could be a reason to de-motivate the employees. Therefore it is important to handle the performance appraisal results in a responsible manner.
DeleteHi Vayanga, as you stated in your blog, performance appraisal is critical for any organization. Further, performance appraisal is considered as a tool of evaluating performance level of employees against a set of requirements which links with the vision of the organization. According to Purcell and Hutchinson (2007) effectiveness of performance appraisal depends on the leadership behavior in the organization. Exchange relationship between managers (who perform the evaluation) and their employees strongly affects to the reaction of employees to performance appraisal.
ReplyDeleteThank you Samanthi, yes I agree with your point. The effectiveness is directly depends with the leadership behaviors. In here the leaders should not compare an employee with another employee (Samuel, 2013)
DeletePerformance appraisal is essential in development of employee and growth of the organization. Most multinational companies do quarterly evaluations to measure employee standards and where they should directed to. This is mainly based on their KPIs. Appraisals will show whether the employee in the right part or whether they need more training r development. As most multinational do all the employees are given a chance to do appraisals for whom they report to. This show the management which level have gaps to fulfill.
ReplyDeleteThank you for your comment Dharshika. Yes I agree with you. Performance appraisal is a process where the management get an idea about the areas where the employees need to be trained. According to Paul, Abeguki, Hezekiah and JoyIfiavor (2014) the performance appraisal will be helpful to identify the areas where the employees need to be trained.
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