Performance Appraisal Notes & Concept08.04.2013

  Main features

Applications of results of appraisalPotential benefits/advantages

Potential complicationsWho conducts them

Human resource management & performance management

When are they conductedMethods of collecting data

Objective productionThe happy-productive worker hypothesis

PersonnelJudgmental evaluation

Organizational citizenship behaviorPerformance appraisal interviews

Employee reactionsAppraisal and legal implications

Cross-cultural implications

Definition of Performance Appraisal                                                                           A performance appraisal is a systematic and periodic process that assesses an individual 

employee’s  job  performance  and  productivity  in  relation  to  certain  pre-established  criteria  and  organizational  objectives. 

Other aspects of  individual employees are considered as well, such as organizational citizenship behavior, accomplishments, 

potential for future improvement, strengths and weaknesses, etc. To collect PA data, there are three main methods: objective 

production, personnel, and judgmental evaluation. Judgmental evaluations are the most commonly used with a large variety 

of evaluation methods.A PA is typically conducted annually. The interview could function as “providing feedback to employees, 

counseling and developing employees, and conveying and discussing compensation, job status, or disciplinary decisions”. PA is 

often  included  in performance management  systems. PA helps  the  subordinate answer  two key questions; first,  "What are 

your  expectations  of  me?"  second,  "How  am  I  doing  to meet  your  expectations?" Performance management  systems  are 

employed  “to manage and align" all  of  an organization's  resources  in order  to achieve highest possible performance.“How 

performance is managed in an organization determines to a large extent the success or failure of the organization. Therefore, 

improving PA for everyone should be among the highest priorities of contemporary” organizations.

Applications of Performance Appraisal are as follows -

• Performance  Improvement• Promotions• Terminations (also transfers)• Test  Validation• Better  Focus  in  Employees• Helps know Organizational Expectations better• Understanding of Training Needs for Employees• It is used for motivation of employees• Employee Reward Schemes (eg - Star Employee of The Month)• To manage quality of workforce in mission critical organizations.• To inform employees of any changes in their Reporting Mechanism , Job Profiles , Job 

Description etc.• Understanding of Employee Expectations from the organization to provide better HR 

solutions.• Gives rise to healthy competition in employees of the same department.• Helps management gauge quality and reliability of training given to an employee.• Enhances social worth of a person - as he/she gets a promotion• Used a s tool by Human Resource managers to better coordinate amongst various 

departments.

Advantages of Performance Appraisal

Facilitation of communication:                                             Communication in organizations is considered an essential function of worker motivation.It has been proposed that  feedback  from PAs aid  in minimizing employees’ perceptions of uncertainty.Fundamentally, feedback and management-employee communication can serve as a guide in job performance.Enhancement of employee focus through promoting trust: 

Behaviors, thoughts, and/or issues may distract employees from their work, and trust  issues  may  be  among  these  distracting  factors.Such  factors  that  consume psychological energy can  lower  job  performance  and  cause  workers  to  lose  sight  of  organizational  goals.Properly constructed and utilized PAs have the ability to lower distracting factors and encourage trust within the organization.Goal setting and desired performance reinforcement: 

Organizations  find  it  efficient  to  match  individual  worker’s  goals  and performance with organizational  goals.PAs provide  room  for  discussion  in  the  collaboration of  these individual  and  organizational  goals.Collaboration  can  also  be  advantageous  by  resulting  in  employee acceptance and satisfaction of appraisal results.Performance improvement: 

Well constructed PAs can be valuable tools for communication with employees as  pertaining  to  how  their  job  performance  stands  with  organizational  expectations.“At  the organizational  level, numerous studies have reported positive relationships between human resource management  (HRM)  practices" and  performance  improvement  at  both  the  individual  and organizational levels.Determination of training needs: 

“Employee  training  and  development  are  crucial  components  in  helping  an organization  achieve  strategic  initiatives”.It  has  been  argued  that  for  PAs  to  truly  be  effective,  post-appraisal opportunities for training and development in problem areas, as determined by the appraisal, must  be  offered.PAs  can  especially  be  instrumental  for  identifying  training  needs  of  new employees. Finally, PAs can help in the establishment and supervision of employees’ career goals.

Also referred to as contextual behavior, prosocial behavior, and

extra-role behavior, organizational citizenship behavior (OCB) consists of employee behavior

that contributes to the welfare of the organization but is beyond the scope of the

employee’s job duties. These extra-role behaviors may help or hinder the attainment of

organizational goals. Research supports five dimensions of OCB: altruism,

conscientiousness, courtesy, sportsmanship, and civic

virtue.Researchers have found that the OCB dimensions of altruism and civic virtue can

have just as much of an impact on manager’s subjective evaluations of employees’

performances as employees’ objective productivity levels.The degree to which OCB can

influence judgments of job performance is relatively high. Controversy exists as to whether

OCB should be formally considered as a part of performance appraisal .

Organizational Citizenship Behavior