Performance appraisal is a formal management system by which the job performance of an employee is examined and evaluated, with the intent of identifying their strengths and weaknesses, for improvement in the future. This procedure is conducted by the subsequent supervisor or manager. Performance appraisal procedures can be traced as far as in the early 20th century, where this system was used to evaluate employee’s work performance for income justification, this procedure was used to determine if the salary or wage of an employee was justified, according to his/her job performance in the year. For instance; if an employee’s performance during the year was more than ideal, then a pay increase was in order. On the other hand a cut in pay would follow if their performance was less than expected by the supervisor.

There are many methods, through which employee performance can be analyzed; a common assessing approach used is the numerical or scalar rating system, in this system managers are asked to score employees on the basis of attributes, job objectives etc. from numbers 1 and so on out of 5 or 10 marks. However, the 360 degree appraisal method is one where employees are not only assessed by managers, but also by subordinates, peers, customers and themselves. This method is a good way of communicating in a work team about each others strengths and weaknesses. Other such methods are “the management by objectives method, the behavioral observation scale method & the behaviorally anchored rating scales method.”

When talking about performance appraisal it is important to understand, that though it is a proved essential procedure for improvement in work performance, it tends to be a problem not only for employees that are being evaluated, but also for the managers that are doing it. Sometimes the human proclivity to judge may create severe ethical, legal and motivational problems, which leads to anarchy in the workplace. In order to avoid that, companies need structured appraisal systems, to ensure that the decisions made will be precise and lawful.

The process of appraising employee performance is basically done to help the employees to understand what skills they are lacking so that they can work on them for improvement. This procedure not only helps managers but employees as well, however if it is not done so properly, it may cause employees to have negative feelings towards these assessments and the outcome may result with employees not able to gain from the process, in the long term.

It is a usual practice in most places that, managers conduct appraisals just to justify pay increase or decrease, forgetting that the sole purpose of performance appraisal is not salary increase or decrease, but the development of employee skills and the improvement of work in the office. Besides that, it is also important to give employees feedback (whether it is a matter of money or not), on the work that they are doing. This helps build employee morale and motivates them to work even better, whereas it is also important to give critical feedback to employees, so they can get their act together.

The main point of performance appraisal is to evaluate work performance of employee’s so that there can be room for improvement. Pay cuts and pay increases are merely a motivational tool; however it should not be forgotten, that pay increase can not be used as a motivational tool for all employees. Just as each person is different so the tools that motivate them are also different, for some people it is money whereas as others are motivated by power or responsibility etc.

The focus of managers on performance appraisals at the end of the year, instead of working towards improving performance during the year is the main problem today. If managers focused their attention to helping employees improve their job performance it would make it easier for them to analyze it at the end of the year, instead of just rating employees based on numbers or personality traits, which is neither accurate nor fair to the employees. If managers and supervisors were to understand how much they themselves would benefit from doing this, it would make there job much easier.

In conclusion it can be said that, performance appraisal is generally a performance measuring tool, It is not only to identify employee’s job performance but it also helps managers gain information that help them make their employees work more prolific. Also vital information can be gained so that organizations may recognize the difficulties that workers face in everyday work. However it should not be forgotten that this system has a lot of flaws, and may not always be ideal for companies, but it cannot be ignored. It is an inevitable procedure which no matter how much employees or managers try to ignore it, needs to be carried out, because without it employee evaluation is not possible. One can soften it by calling it “development discussions” or have them on a usual basis to identify areas of improvement, but it cannot be overlooked.

Written By: Hannah Paul