Objectives of Performance Appraisal
Performance appraisal is a method of evaluating the job performance of an employee. It is an ongoing process of obtaining, researching, analyzing and recording information about the worth of an employee. A major performance appraisal objective is establishing a set of well-defined goals to be achieved within a time frame.
15 Objectives of Performance Appraisal:
The main objective of performance
appraisals is to measure and improve the performance of employees and increase
their future potential and value to the company. Other objectives include
providing feedback, improving communication, understanding training needs,
clarifying roles and responsibilities and determining how to allocate rewards.
Provide Feedback. Providing feedback is the most
common justification for an organization to have a performance appraisal system.
Through its performance appraisal process the individual learns exactly how
well he/she did during the previous twelve months and can then use that
information to improve his/her performance in the future. In this regard,
performance appraisal serves another important purpose by making sure that the
boss’s expectations are clearly communicated.
Facilitate Promotion Decisions. Almost everyone in an organization
wants to get ahead. How should the company decide who gets the brass rings?
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.
Facilitate Layoff 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. (India's largest software services provider TCS axed 1,000 jobs
in the country due to non-performance by its employees. Jan 15, 2015, PTI)
Encourage 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.
Motivate Superior Performance. This is another classic reason for
having a performance appraisal system. 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’’).
Set and Measure Goals. Goal setting has consistently been
demonstrated as a management process that generates superior performance. The
performance appraisal process is commonly used to make sure that every member
of the organization sets and achieves effective goals.
Counseling 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.
Determine 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.
Encourage Coaching and Mentoring. Managers are expected to be good
coaches to their team members and mentors to their proteges. Performance
appraisal identifies the areas where coaching is necessary and encourages
managers to take an active coaching role.
Support Manpower Planning. Well-managed organizations regularly
assess their bench strength to make sure that they have the talent in their
ranks that they will need for the future. 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 horsepower required for the future.
Determine 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.
Determine Organizational Training and
Development Needs. Would the organization be better off sending all of its managers and
professionals through a customer service training program or one on effective
decision making? By reviewing the data from performance appraisals, training
and development professionals can make good decisions about where the
organization should concentrate company-wide training efforts.
Validate Hiring Decisions. Is the company hiring stars, or is
it filling itself with trolls? Only when the performance of newly hired
individuals is assessed can the company learn whether it is hiring the right
people.
Provide 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.
Improve Overall Organizational
Performance.
This is the most important reason for an organization to have a performance
appraisal system. A performance appraisal procedure allows the organization to
communicate performance expectations to every member of the team and assess
exactly how well each person is doing. When everyone is clear on the
expectations and knows exactly how he is performing against them, this will
result in an overall improvement in organizational success.
Conclusion :
So the major objective of Performance appraisal is to establishing a set of well-defined goals to be achieved within a time frame.