Meaning and Purpose of Performance Appraisal

PSYCH-105 Industrial Psychology

Chapter 17: Performance Appraisal

Unit 1

Unit 2

Unit 3

Unit 4


Meaning and Purpose of Performance Appraisal

PERFORMANCE – Performance is an employee’s accomplishment of assigned work measured against standards of the employee’s position. 

PERFORMANCE MANAGEMENT – Performance management is the process of planning and appraising performance, giving feedback and counselling to an employee to improve his performance. 

PERFORMANCE APPRAISAL – Performance appraisal is the process of obtaining, analyzing and recording information about the relative worth of an employee. It is a backward-looking process only measuring what happened in the past.

Scott, Clotheir and Spriegel have defined performance appraisal as the process of evaluating employee’s performance on the job in terms of requirements of job. 

Edwin Flippo – Performance appraisal is the systematic periodic and an impartial rating of an employee’s excellence in matters pertaining to his present job and in matters for a better job. 

Yoder: Performance appraisal refers to all formal procedures used in working organizations to evaluate personalities, contributions and potential of group members. 

Dale Beach – “Performance Appraisal is the systematic evaluation of the individual with regards to his or her performance on the job and his potential for development.”

To sum up we can say that performance appraisal is a systematic, periodic and an impartial rating of an employee’s excellence in matters pertaining to his present job and to his potential for a better job. Performance appraisal goes by various names such as performance evaluation, progress rating, merit rating, merit evaluation. 

Characteristics of Performance Appraisal

  1. A step-by-step process
  2. A scientific and objective study
  3. Examines the employee’s strength and weaknesses
  4. An ongoing and continuous process
  5. A secure process for making correct decisions on employees

Objective / Importance of Performance Appraisal

  1. It provides a scientific basis for judging the merits or worth of the employees. 
  2. It is sound basis for promotions, demotions, transfer or termination of employees.
  3. It helps in distinguishing between efficient and inefficient workers. 
  4. It helps the supervisor to evaluate the performance and to know the potential of their subordinates systematically.
  5. Performance rating helps in guiding the employees to include their performance.
  6. If appraisal is done scientifically and systematically it will prevent employees’ grievance.

Purpose of Performance Appraisal

  1. To review the performance of the employees over a given period of time.
  2. To judge the gap between the actual and desired performance. 
  3. To help the management in exercising organizational control. 
  4. To define the specific job criteria. 
  5. To strengthen relationship and communication between supervisor – subordinate and management – employee.
  6. To identify training and development needs of the future.
  7. To provide feedback to the employees regarding their fast performance.
  8. To judge the effectiveness of other human resource functions like recruitment and selection, training.
  9. To reduce the grievance of the employees.

Author – Dr. Niyati Garg

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