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People differ in their abilities and their aptitudes. There is always some difference between thequality and quantity of the same work on the same job being done by two different people.

Performance appraisals of Employees are necessary to understand each employees abilities,competencies and relative merit and worth for the organization.Performance appraisalrates the

employees in terms of their performance.

Performance appraisals are widely used in the society. The history of performance appraisal canbe dated back to the 20th century and then to the second world war when the merit rating was

used for the first time. An employer evaluating their employees is a very old concept.Performance appraisals are an indispensable part of performance measurement.

Performance appraisal is necessary to measure the performance of the employees and the

organization to check the progress towards the desired goals and aims.

The latest mantra being followed by organizations across the world being "get paid according to what

you contribute" the focus of the organizations is turning to performance management and specifically

to individual performance. Performance appraisal helps to rate the performance of the employees andevaluate their contribution towards the organizational goals. If the process of performance appraisals is

formal and properly structured, it helps the employees to clearly understand their roles and

responsibilities and give direction to the individuals performance. It helps to align the individual

performances with the organizational goals and also review their performance.

Performance appraisal takes into account the past performance of the employees and focuses on the

improvement of the future performance of the employees. Here at naukrihub, we attempt to provide an

insight into the concept of performance appraisal, the methods and approaches of performance

appraisal, sample performance appraisal forms and the appraisal softwares available etc. An attempt

has been made to study the current global trends in performance appraisal.

Performance appraisal - Traditional approachTraditionally, performance appraisal has been used as just a method for determining andjustifying the salaries of the employees. Than it began to be used a tool for determining rewards

(a rise in the pay) and punishments (a cut in the pay) for the past performance of the employees.

This approach was a past oriented approach which focused only on the past performance of theemployees i.e. during a past specified period of time. This approach did not consider the

developmental aspects of the employee performance i.e. his training and development needs orcareer developmental possibilities. The primary concern of the traditional approach is to judge

the performance of the organization as a whole by the past performances of its employees

Therefore, this approach is also called as the overall approach. In 1950s the performance

appraisal was recognized as a complete system in itself and the Modern Approach to

performance appraisal was developed.

Performance appraisal - Modern approach

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The modern approach to performance development has made the performance appraisal processmore formal and structured. Now, the performance appraisal is taken as a tool to identify better

performing employees from others, employees training needs, career development paths,rewards and bonuses and their promotions to the next levels.

Appraisals have become a continuous and periodic activity in the organizations. The results of

performance appraisals are used to take various other HR decisions like promotions, demotions,

transfers, training and development, reward outcomes. The modern approach to performance

appraisals includes a feedback process that helps to strengthen the relationships between

superiors and subordinates and improve communication throughout the organization.

The modern approach to Performance appraisal is a future oriented approach and is

developmental in nature. This recognizes employees as individuals and focuses on their

development.

Performance appraisal

is the process of obtaining, analyzing and recording information about the relative worth of anemployee. The focus of the performance appraisal is measuring and improving the actualperformance of the employee and also the future potential of the employee. Its aim is to measure

what an employee does.

According to Flippo, a prominent personality in the field of Human resources, "performanceappraisal is the systematic, periodic and an impartial rating of an employees excellence in the

matters pertaining to his present job and his potential for a better job." Performance appraisal is asystematic way ofreviewing and assessing the performance of an employee during a given

period of time and planning for his future.

It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps toanalyze his achievements and evaluate his contribution towards the achievements of the overall

organizational goals.

By focusing the attention on performance, performance appraisal goes to the heart ofpersonnel

management and reflects the management's interest in the progress of the employees.

Objectives Of Performance appraisal:

y

To review the performance of the employees over a given period of time.

y To judge the gap between the actual and the desired performance.

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y To help the management in exercising organizational control.

y Helps to strengthen the relationship and communication between superior subordinates

and management employees.

y To diagnose the strengths and weaknesses of the individuals so as to identify the training

and development needs of the future.

y To provide feedback to the employees regarding their past performance.

y Provide information to assist in the other personal decisions in the organization.

y Provide clarity of the expectations and responsibilities of the functions to be performedby the employees.

y To judge the effectiveness of the other human resource functions of the organization such

as recruitment, selection, training and development.

y To reduce the grievances of the employees.

Performance appraisal systems began as simple methods of income justification. Thatis, appraisal was used to decide whether or not the salary or wage of an individualemployee was justified.

The process was firmly linked to material outcomes. If an employee's performance wasfound to be less than ideal, a cut in pay would follow. On the other hand, if theirperformance was better than the supervisor expected, a pay rise was in order.

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Little consideration, if any, was given to the developmental possibilities of appraisal. Ifwas felt that a cut in pay, or a rise, should provide the only required impetus for anemployee to either improve or continue to perform well.

Sometimes this basic system succeeded in getting the results that were intended; but

more often than not, it failed.

For example, early motivational researchers were aware that different people withroughly equal work abilities could be paid the same amount of money and yet havequite different levels of motivation and performance.

These observations were confirmed in empirical studies. Pay rates were important, yes;but they were not the only element that had an impact on employee performance. It wasfound that other issues, such as morale and self-esteem, could also have a majorinfluence.

As a result, the traditional emphasis on reward outcomes was progressively rejected. Inthe 1950s in the United States, the potential usefulness of appraisal as tool formotivation and development was gradually recognized. The general model ofperformance appraisal, as it is known today, began from that time.

Modern Appraisal

Performance appraisal may be defined as a structured formal interaction between asubordinate and supervisor, that usually takes the form of a periodic interview (annualor semi-annual), in which the work performance of the subordinate is examined anddiscussed, with a view to identifying weaknesses and strengths as well as opportunitiesfor improvement and skills development.

In many organizations - but not all - appraisal results are used, either directly orindirectly, to help determine reward outcomes. That is, the appraisal results are used toidentify the better performing employees who should get the majority of available meritpay increases, bonuses, and promotions.

By the same token, appraisal results are used to identify the poorer performers whomay require some form of counseling, or in extreme cases, demotion, dismissal ordecreases in pay. (Organizations need to be aware of laws in their country that mightrestrict their capacity to dismiss employees or decrease pay.)

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