Chapter Six- Human Resource Management
Chapter Six
Performance Appraisal
6.1. Meaning of Performance Appraisal
Performance appraisal system has been defined in many ways. The easiest way to understand the
meaning of performance appraisal is as follows:
It is the systematic assessment of an individual with respect to his or her performance on the job
and his or her potential for development in that job. Thus, performance appraisal is a systematic
and objective way of evaluating the relative worth or ability of an employee in performing his job.
The two aspects of performance appraisal considered to be important are: systematic and objective.
The appraisal is said to be systematic when it evaluates all performances in the same manner, by
applying the same approach, so that appraisal of different persons are comparable. Such an
and ratees know the system of performance appraisal and its timing. Appraisal has objectivity also.
Its important aspect is that it attempts at precise measurement by trying to remove human biases
and prejudices.
According to Flippo
appraisal is the systematic, p
In the words of Yoder,
organizations to eva
performance appraisal is a formal program in an organization which is concerned with not only
the contributions of the members who form part of the organization, but also aims at spotting the
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.
According to International Labor Organization,
quality, quantity and style of the performance along with the assessment of the factors influencing
In short, we can say that performance appraisal is expected to result in an assessment of:
development potential of the employees, training needs for the employees; capabilities of
employees being placed in higher posts, behavior and obedience of the employees; and the need
of the organization to evolve a control mechanism.
Page 1
, Chapter Six- Human Resource Management
6.2. Purpose of Performance Appraisal
Performance is always measured in terms of outcome and not efforts. Performance Appraisal is
needed in most of the organizations in order:
1. To give information about the performance of employees on the job and give ranks on the basis
of which decisions regarding salary fixation, demotion, promotion, transfer and confirmation
are taken.
2. To provide information about amount of achievement and behavior of subordinate in their job.
This kind of information helps to evaluate the performance of the subordinate, by correcting
loopholes in performances and to set new standards of work, if required.
3. To provide information about an employe -relevant strengths and weaknesses.
4. To provide information so as to identify shortage in employee regarding ability, awareness and
find out training and developmental needs.
5. To avoid grievances and in disciplinary activities in the organization.
Performance appraisals should be conducted on a frequent basis, and they need not be directly
attached to promotion opportunities only. It is important because of several reason s such as:
1. Personal Attention: Performance appraisal evaluation, gives employee to draw personal
concern from supervisor and talk about their own strengths and weaknesses.
2. Feedback: Employees on a regular basis get feedback of their performances and issues in
which they lack, which needs to be resolved on a regular basis.
3. Career Path: It allows employees and supervisors to converse goals that must be met to grow
within the company. This may encompass recognizing skills that must be acquired, areas in
which improvement is required, and additional qualification that must be acquired.
4. Employee Accountability: Employees are acquainted that their evaluation will take place on
a regular basis and therefore they are accountable for their job performance.
5. Communicate Divisional and Company Goals:
individual goals but provides an opportunity for managers to explain organizational goals and
in the manner in which employees can contribute in the achievement of those goals.
6.3. Performance Appraisal Steps
The performance appraisal system of one organization may vary from other organizations, though
some of the specific steps that an organization may follow are as follows:
1. Establish Performance Standards: It begins by establishing performance standards i.e. what
they expect from their employee in terms of outputs, accomplishments and skills that they will
Page 2
Chapter Six
Performance Appraisal
6.1. Meaning of Performance Appraisal
Performance appraisal system has been defined in many ways. The easiest way to understand the
meaning of performance appraisal is as follows:
It is the systematic assessment of an individual with respect to his or her performance on the job
and his or her potential for development in that job. Thus, performance appraisal is a systematic
and objective way of evaluating the relative worth or ability of an employee in performing his job.
The two aspects of performance appraisal considered to be important are: systematic and objective.
The appraisal is said to be systematic when it evaluates all performances in the same manner, by
applying the same approach, so that appraisal of different persons are comparable. Such an
and ratees know the system of performance appraisal and its timing. Appraisal has objectivity also.
Its important aspect is that it attempts at precise measurement by trying to remove human biases
and prejudices.
According to Flippo
appraisal is the systematic, p
In the words of Yoder,
organizations to eva
performance appraisal is a formal program in an organization which is concerned with not only
the contributions of the members who form part of the organization, but also aims at spotting the
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.
According to International Labor Organization,
quality, quantity and style of the performance along with the assessment of the factors influencing
In short, we can say that performance appraisal is expected to result in an assessment of:
development potential of the employees, training needs for the employees; capabilities of
employees being placed in higher posts, behavior and obedience of the employees; and the need
of the organization to evolve a control mechanism.
Page 1
, Chapter Six- Human Resource Management
6.2. Purpose of Performance Appraisal
Performance is always measured in terms of outcome and not efforts. Performance Appraisal is
needed in most of the organizations in order:
1. To give information about the performance of employees on the job and give ranks on the basis
of which decisions regarding salary fixation, demotion, promotion, transfer and confirmation
are taken.
2. To provide information about amount of achievement and behavior of subordinate in their job.
This kind of information helps to evaluate the performance of the subordinate, by correcting
loopholes in performances and to set new standards of work, if required.
3. To provide information about an employe -relevant strengths and weaknesses.
4. To provide information so as to identify shortage in employee regarding ability, awareness and
find out training and developmental needs.
5. To avoid grievances and in disciplinary activities in the organization.
Performance appraisals should be conducted on a frequent basis, and they need not be directly
attached to promotion opportunities only. It is important because of several reason s such as:
1. Personal Attention: Performance appraisal evaluation, gives employee to draw personal
concern from supervisor and talk about their own strengths and weaknesses.
2. Feedback: Employees on a regular basis get feedback of their performances and issues in
which they lack, which needs to be resolved on a regular basis.
3. Career Path: It allows employees and supervisors to converse goals that must be met to grow
within the company. This may encompass recognizing skills that must be acquired, areas in
which improvement is required, and additional qualification that must be acquired.
4. Employee Accountability: Employees are acquainted that their evaluation will take place on
a regular basis and therefore they are accountable for their job performance.
5. Communicate Divisional and Company Goals:
individual goals but provides an opportunity for managers to explain organizational goals and
in the manner in which employees can contribute in the achievement of those goals.
6.3. Performance Appraisal Steps
The performance appraisal system of one organization may vary from other organizations, though
some of the specific steps that an organization may follow are as follows:
1. Establish Performance Standards: It begins by establishing performance standards i.e. what
they expect from their employee in terms of outputs, accomplishments and skills that they will
Page 2
