Performance Appraisal

Performance evaluation is a component of career development. The organizations' attention is shifting to performance management, incredibly individual performance. Performance assessment assists in rating employees' performance and evaluating their contribution to the organization's goals. Performance assessment as a career development tool leads to employee acknowledgement of their efforts, often via awards and gratitude. It serves as a bridge between the Organization and the employees' career aspirations.

Potential evaluation, as part of performance appraisal, assists in identifying people's latent qualities and potential. Identifying these prospective abilities can assist individuals in preparation for increased responsibilities and jobs in the future. The performance evaluation process is progressive in and of itself. Performance evaluation is also directly tied to other HR activities, such as identifying training and development requirements, promotions, demotions, salary modifications, etc. Positive feedback goes a long way in motivating employees and identifying specific career development objectives. Employees may use the evaluation to create professional objectives, acquire new competency levels, and trace their career growth. Employees are encouraged to strengthen their strengths and overcome their flaws through performance appraisal.

Performance Appraisal

Performance appraisal is the methodical review of employees' performance and understanding of a person's talents for future growth and development. Flippo defines performance assessment as "the systematic, periodic, and unbiased grading of an employee's excellence in topics relevant to the employee's current job and possibility for a better one." Thus, performance evaluation is a systematic method of analyzing and rating an employee's work during a specific period and preparing for his future.

Approaches of Performance Appraisal

Since ancient times, performance evaluation has been an important activity. Previously, performance assessment was primarily seen negatively as a means of disciplining employees and was limited to formal remarks used for promotions. Today, performance evaluation is regarded as a constructive management development tool to assist individuals in reaching their maximum potential. The tendency has shifted dramatically, nearly to the point of a paradigm shift.

According to modern interpretations of the concept, the primary goal of performance appraisal is to promote individual excellence for employees to function better as a collectivity and elevate the overall level of organizational performance while re-energizing them and manifesting and rediscovering their latent potential as partners in a collective endeavour. Establishing a suitable atmosphere of mutual trust between the two "opposing poles" of organizational endeavour, employees and employer, is critically necessary for the process's success.

In the sense that formal observations and mutual talks are engaged in generating parameters through the positive deployment of social capital and de-emphasis of hierarchy, the performance assessment process contains both formal and informal features. The fundamental goal is to create and enhance human capital, focusing on intent rather than method.

Need for Performance Appraisal

The need for performance assessment comes from subpar performance, particularly among government personnel. The Supreme Court has recently supported the government's power to reject a two-year extension in service to a civil judge in Orissa on the grounds of 'poor performance'. Masses are fed up with the administration's mentality and work culture, and "if things do not improve, the people could take the law into its own hands, or there might be a large movement of civil disobedience". Even the minister of state for labour, Government of India, openly asserted that forty to forty-five per cent of central government employees are virtual 'non-performers'. A dependable performance assessment system is urgently needed to screen out underperforming and erring officials or to enhance their job orientation, both work and trait related.

Motivating people to put their heart and soul into their job is critical for ensuring great production. Though the skeleton of a performance assessment system geared toward this goal is accessible in government, natural practice is far from it. There are established standards, but how they are used varies significantly between departments and superiors. Officials are frequently allowed to clarify target articulation and the process of obtaining success.

Performance Appraisals Methods

It can be understood under the following sub-headings

Traditional Approach

This strategy has only been utilized to establish and justify employee compensation. It has been used to assess employee awards and penalties based on prior performance. This past-oriented method focused solely on the employees' past performance, i.e. within a previously designated period. This strategy did not consider the developmental components of the employee's performance, such as his training and development requirements or career advancement opportunities. The conventional approach's principal objective is to analyze the Organization's overall performance based on the historical performance of its personnel. As a result, it is also known as the entire approach.

  • Essay Appraisal Method − This classic kind of assessment, often known as the "Free Form technique," entails a description of an employee's performance by his or her superior. The description is an assessment of an individual's performance based on facts, and it frequently includes examples and proof to back up the information. One significant disadvantage of the approach is that the evaluator's prejudice may influence it.

  • Straight Ranking Method − This is one of the most basic and oldest performance evaluation methods. The appraiser grades the employees from best to worst based on their performance in this technique. It is beneficial for comparing things.

  • Paired Comparison Method − In this strategy, each employee is compared to the rest of the group. The workers are given final ranks based on overall comparisons.

  • Critical Incidents Methods − The evaluator grades the employee based on significant events and how the person acted during such situations. It contains both bad and good aspects. The disadvantage of this system is that the supervisor must record key occurrences and employee behaviour as they occur.

  • Field Review Method − A senior member of the HR department or a training officer uses this strategy to discuss and interview supervisors to evaluate and grade their subordinates. One significant disadvantage of this procedure is that it is time-consuming. This strategy aids in reducing the personal bias of superiors.

  • Checklist Method − The rater is provided with a checklist containing descriptions of the workers' on-the-job behaviour. The checklist includes a collection of statements from which the rater describes the workers' job performance.

  • Graphical Rating Scale Method − This approach evaluates an employee's job quality and quantity using a visual scale representing varying degrees of a particular attribute. The parameters include personal qualities and attributes connected to employees' on-the-job performance.

  • Rating Scales Method − Rating scales are numerical scales that indicate job-related performance criteria such as dependability, initiative, output, attendance, attitude, and so on. Each scale has a rating ranging from good to bad. The overall numerical score is compared, and conclusions are drawn. Rating scales provide the following advantages: versatility, convenience of use, low cost, every sort of task may be reviewed, conclusions can be drawn, and no special training is necessary. However, rater bias is seen as the method's primary shortcoming.

Modern Approach

The current approach to performance development has formalized and structured the performance evaluation process. It incorporates a feedback mechanism that aids in the strengthening of relationships between superiors and subordinates as well as the improvement of communication across the Organization. It is a forward-thinking and developing strategy. This acknowledges employees as individuals and focuses on their growth.

  • Assessment Centres − An assessment centre often employs methods such as social/informal gatherings, exams and exercises, and projects given to employees to assess their readiness to take on more responsibilities in the future. Employees are typically given tasks comparable to the job they would be expected to complete if promoted. Employees are assessed on job-related qualities by professional evaluators who monitor and evaluate them while they execute their assigned tasks. Interpersonal skills, intellectual competence, planning and organizational abilities, motivation, career orientation, and other essential qualities are evaluated in assessment centres. Assessment centres are also an excellent technique to assess the targeted employees' training and development requirements.

  • Human Resource Accounting Method − Human resources are important assets for every organization. The human resource accounting approach attempts to determine the monetary value of these assets. Employee performance is evaluated using this technique based on the cost and contribution of the employees. Employee costs encompass all spending paid on them, such as their remuneration, recruiting and selection charges, induction and training costs, and so on. In contrast, their contribution includes the overall value contributed (in monetary terms). The performance of the personnel will determine the difference between the cost and the contribution. Employee contributions should be more than the costs expended on their behalf.

  • Management by Objectives (MBO) − MBO may be defined as a process in which employees and managers collaborate to identify shared goals. Employees choose the goals to be reached, the standards to be used as the criterion for measuring their performance and contribution, and the course of action to be pursued. The essence of MBO is participatory goal formulation, action planning, and decision-making. The measurement and comparison of the employee's performance with the criteria specified is an essential aspect of the MBO. Employees are more likely to perform their obligations when involved in goal formulation and selecting the course of action to follow.

  • Balance Score Card − The balanced scorecard - a concept proposed by Kaplan and Norton - gives a framework of several criteria to guarantee a complete and balanced assessment of employee performance. The balanced scorecard focuses on the metrics that influence performance. The balanced scorecard is a set of metrics that balances the organization's internal and procedural metrics with its outcomes, achievements, and financial metrics.

  • 360 Degree Feedback Appraisal − It is also known as multi-rater feedback,' and it is the most thorough evaluation in which feedback regarding an employee's performance is gathered from all sources that come into touch with the individual on the job. Peers, supervisors (i.e. superiors), subordinates, team members, clients, suppliers/vendors can all be 360-degree respondents for an employee. Anyone in touch with the employee may offer essential insights, information, or feedback about the employee's "on-the-job" performance. The 360-degree assessment has four components: self-evaluation, superior evaluation, subordinate evaluation, and peer evaluation.


Performance appraisal is the methodical review of employees' performance and understanding of a person's talents for future growth and development. It also evaluates individuals' prospects for advancement. The primary goal of performance evaluation is to recognize and reward people that operate effectively and honestly in the Organization. At the same time, it seeks to eliminate individuals who could be more efficient and competent in carrying out their duties. Organizations may use the performance assessment system not only to identify and grade people on performance levels but also to deploy human resources wisely and efficiently and to build the needed capabilities in them.