Performance Appraisal Systems take a variety of forms and are central to Performance Management Systems.
Appraisal takes place annually between the manager and the employee. However there are number of trends that are changing the style and relationship of the appraisal. One important trend is to hold periodic reviews on a more regular basis. This allows for a more dynamic process of discussion and adjustment to objectives to counter the criticism that objectives set and reviewed annually do not fulfill to important aspects of the process.
The objectives should remain relevant and achievable. The process of dialogue allows for relationship building and coaching that needs to take place.
The main purposes for Performance Appraisal include:
- Evaluating Performances to enable a ‘rewards’ formula to be put into operation.
- Auditing to discover work potential, both present and future, of individuals and teams.
- Construction succession plans for corporate replacement planning.
- Discovering training needs for identifying gaps to be filled by formal training.
- Motivating staff to clarify and offer feedback on standards and objectives.
- Developing individuals advising on, conducting and explaining work methods to enable individuals to take responsibility for their own performance, training and development and working relationships through feedback, dialogue and information sharing.
The Approaches or Orientations in Performance Appraisal:
- Control Orientation: In this scheme, an assumption that a superior is controlling authority. This is often perceived by employees negatively. The “them and us” attitudes are formalized through power to judge via paperwork, which seals a view of how well somebody is perceived to work. This approach works best where clear targets are available, which can be judged obviously. It improves a standardized appraisal that is ‘felt fair’.
- Development Orientation: The development appraisal does not start from the manager in control but the need to deal with the uncertainty in the minds of the employees who genuinely want to know how they are performing and what the organization thinks of their contribution. The employees need support to enhance contribution and match their skills with organizational needs. This is a bottom up approach. The demand to develop and a learning climate are likely to evolve from such an attitude.
Types of Appraisals:
- Top-down Schemes: is the most traditional form of appraisal. This emphasizes both subordinate feedback and the lead on objective setting coming from the top. The problems faced by this type of appraisal is that it stresses traditional organizational hierarchies, there may be lack of impartiality and favoritism. There can be lack of full knowledge of the employee in some areas where manager’s span of control may be wide. To counter the problems an independent reviewer is often asked to review the outcomes to avoid any potential bias.
- Self Appraisal: Rarely used, as independent forms of appraisal but, encourages greater ownership and participation in the appraisal scheme through self-reflection and helps ensure full preparation for the appraisal discussion. In an open environment it allows managers to shift from a directive, informing style to counseling style, thereby assisting staff to form objectives and plans, moving from ‘telling’ and ‘selling’ to facilitating which is seen as a creative and more effective level of satisfaction and ownership.
- Upward Appraisal: It is increasingly used to reflect the growing trend for organizations to recognize that they have a duty to provide effective working systems for employees. Employees are invited to provide managers with a rating on such dimensions as effective communication, involvement in decision-making, clarity of objectives and goals and so on.
- Peer Appraisal: Involves members of teams evaluating each other. One of the arguments for this type of system is the pressure to treat internal working relationships as internal feedback systems to external customer feedback techniques. There are sensitivities involved and careful development of staff is required in using such schemes.
- Multi-dimensional Appraisal: It is also called ‘360- Degree Appraisal’. It is used to collect data from outside the immediate team and often from external customer feedback. Its key advantage is to overcome the criticisms of impracticalities and lack of knowledge of a single appraiser. The term refers to the various sources of data: boss, peers, customers and reporting staff, in order to achieve a more comprehensive understanding of the performance relationships and retain positive employee relations.
Recent Trends in Performance Appraisal
- Reduction in paperwork
- Clarity of objective setting
- Emphasis on the quality of the review discussion
- Greater involvement of staff in the process
Disadvantages of Appraisals
- Overtime to complete the paperwork
- Vague objectives and inconsistent standards of objective setting.
- Emphasis on getting the review ‘over’ rather than on the quality of the interview process.
- Narrow individual orientation that ignores wider feedback and operating context.
- Failure to integrate appraisal issues within the wider organizational and operational reality.
Learn Approaches and Orientations of Appraisals Here
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This article is in continuation with our previous articles on Human Resource Management such as Compensation & Rewards, Recruitment & Selection, Career Management.