A performance appraisal, employee appraisal, performance review, or (career)
development discussion is a method by which the job performance of an employee is
evaluated (generally in terms of quality, quantity, cost, and time) typically by the
corresponding manager or supervisor. A performance appraisal is a part of guiding and
managing career development. It is the process of obtaining, analyzing, and recording
information about the relative worth of an employee to the organization. Performance
appraisal is an analysis of an employee's recent successes and failures, personal strengths
and weaknesses, and suitability for promotion or further training. It is also the judgement
of an employee's performance in a job based on considerations other than productivity
[[Definition]] Performance appraisal is a method of evaluating the behaviour of
employees in the workspot,normally including both and quantitative and qualitative
aspects of job performance.it is a systematic and objective way of evaluating both work-
related behaviour and potential of employees.it is a process that involves determining and
communicating to an employee how the job and ideally,establishing a plant of
The history of performance appraisal is quite brief. Its roots in the early 20th
century can be traced to Taylor's pioneering Time and Motion studies. But this is
not very helpful, for the same may be said about almost everything in the field of
modern human resources management.
As a distinct and formal management procedure used in the evaluation of work
performance, appraisal really dates from the time of the Second World War - not
more than 60 years ago.
Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale
of things historical, it might well lay claim to being the world's second oldest
There is, says Dulewicz (1989), "... a basic human tendency to make judgements
about those one is working with, as well as about oneself." Appraisal, it seems, is
both inevitable and universal. In the absence of a carefully structured system of
appraisal, people will tend to judge the work performance of others, including
subordinates, naturally, informally and arbitrarily.
The human inclination to judge can create serious motivational, ethical and legal
problems in the workplace. Without a structured appraisal system, there is little
chance of ensuring that the judgements made will be lawful, fair, defensible and
Performance appraisal systems began as simple methods of income justification.
That is, appraisal was used to decide whether or not the salary or wage of an
individual employee was justified.
The process was firmly linked to material outcomes. If an employee's
performance was found to be less than ideal, a cut in pay would follow. On the
other hand, if their performance was better than the supervisor expected, a pay
rise was in order.
Little consideration, if any, was given to the developmental possibilities of
appraisal. If was felt that a cut in pay, or a rise, should provide the only required
impetus for an employee 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
with roughly equal work abilities could be paid the same amount of money and
yet have quite 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 was found that other issues, such as morale and self-
esteem, could also have a major influence.
As a result, the traditional emphasis on reward outcomes was progressively
rejected. In the 1950s in the United States, the potential usefulness of appraisal
as tool for motivation and development was gradually recognized. The general
model of performance appraisal, as it is known today, began from that time.
Performance appraisal may be defined as a structured formal interaction
between a subordinate and supervisor, that usually takes the form of a periodic
interview (annual or semi-annual), in which the work performance of the
subordinate is examined and discussed, with a view to identifying weaknesses
and strengths as well as opportunities for improvement and skills development.
In many organizations - but not all - appraisal results are used, either directly or
indirectly, to help determine reward outcomes. That is, the appraisal results are
used to identify the better performing employees who should get the majority of
available merit pay increases, bonuses, and promotions.
By the same token, appraisal results are used to identify the poorer performers
who may require some form of counseling, or in extreme cases, demotion,
dismissal or decreases in pay. (Organizations need to be aware of laws in their
country that might restrict their capacity to dismiss employees or decrease pay.)
Whether this is an appropriate use of performance appraisal - the assignment
and justification of rewards and penalties - is a very uncertain and contentious
Few issues in management stir up more controversy than performance appraisal.
There are many reputable sources - researchers, management commentators,
psychometricians - who have expressed doubts about the validity and reliability
of the performance appraisal process. Some have even suggested that the
process is so inherently flawed that it may be impossible to perfect it (see
Derven, 1990, for example).
At the other extreme, there are many strong advocates of performance appraisal.
Some view it as potentially "... the most crucial aspect of organizational life"
Between these two extremes lie various schools of belief. While all endorse the
use of performance appraisal, there are many different opinions on how and
when to apply it.
There are those, for instance, who believe that performance appraisal has many
important employee development uses, but scorn any attempt to link the process
to reward outcomes - such as pay rises and promotions.
This group believes that the linkage to reward outcomes reduces or eliminates
the developmental value of appraisals. Rather than an opportunity for
constructive review and encouragement, the reward-linked process is perceived
as judgmental, punitive and harrowing.
For example, how many people would gladly admit their work problems if, at the
same time, they knew that their next pay rise or a much-wanted promotion was
riding on an appraisal result? Very likely, in that situation, many people would
deny or downplay their weaknesses.
Nor is the desire to distort or deny the truth confined to the person being
appraised. Many appraisers feel uncomfortable with the combined role of judge
Such reluctance is not difficult to understand. Appraisers often know their
appraisees well, and are typically in a direct subordinate-supervisor relationship.
They work together on a daily basis and may, at times, mix socially. Suggesting
that a subordinate needs to brush up on certain work skills is one thing; giving an
appraisal result that has the direct effect of negating a promotion is another.
The result can be resentment and serious morale damage, leading to workplace
disruption, soured relationships and productivity declines.
On the other hand, there is a strong rival argument which claims that
performance appraisal must unequivocally be linked to reward outcomes.
The advocates of this approach say that organizations must have a process by
which rewards - which are not an unlimited resource - may be openly and fairly
distributed to those most deserving on the basis of merit, effort and results.
There is a critical need for remunerative justice in organizations. Performance
appraisal - whatever its practical flaws - is the only process available to help
achieve fair, decent and consistent reward outcomes.
It has also been claimed that appraisees themselves are inclined to believe that
appraisal results should be linked directly to reward outcomes - and are
suspicious and disappointed when told this is not the case. Rather than feeling
relieved, appraisees may suspect that they are not being told the whole truth, or
that the appraisal process is a sham and waste of time.
The Link to Rewards
Research (Bannister & Balkin, 1990) has reported that appraisees seem to have
greater acceptance of the appraisal process, and feel more satisfied with it, when
the process is directly linked to rewards. Such findings are a serious challenge to
those who feel that appraisal results and reward outcomes must be strictly
isolated from each other.
There is also a group who argues that the evaluation of employees for reward
purposes, and frank communication with them about their performance, are part
of the basic responsibilities of management. The practice of not discussing
reward issues while appraising performance is, say critics, based on inconsistent
and muddled ideas of motivation.
In many organizations, this inconsistency is aggravated by the practice of having
separate wage and salary reviews, in which merit rises and bonuses are decided
arbitrarily, and often secretly, by supervisors and managers.
(Tools of ) Performance appraisal methods include 11 appraisal methods / types as
1. Critical incident method
The critical incidents for performance appraisal is a method in which the manager writes
down positive and negative performance behavior of employees throughout the
2. Weighted checklist method
This method describe a performance appraisal method where rater familiar with the jobs
being evaluated prepared a large list of descriptive statements about effective and
ineffective behavior on jobs
3. Paired comparison analysis
Paired comparison analysis is a good way of weighing up the relative importance of
A range of plausible options is listed. Each option is compared against each of the other
options. The results are tallied and the option with the highest score is the preferred
4. Graphic rating scales
The Rating Scale is a form on which the manager simply checks off the employee’s level
This is the oldest and most widely method used for performance appraisal.
5. Essay Evaluation method
This method asked managers / supervisors to describe strengths and weaknesses of an
employee’s behavior. Essay evaluation is a non-quantitative technique
This method usually use with the graphic rating scale method.
6. Behaviorally anchored rating scales
This method used to describe a performance rating that focused on specific behaviors or
sets as indicators of effective or ineffective performance.
It is a combination of the rating scale and critical incident techniques of employee
7. Performance ranking method
Ranking is a performance appraisal method that is used to evaluate employee
performance from best to worst.
Manager will compare an employee to another employee, rather than comparing each one
to a standard measurement.
8. Management By Objectives (MBO) method
MBO is a process in which managers / employees set objectives for the employee,
periodically evaluate the performance, and reward according to the result.
MBO focuses attention on what must be accomplished (goals) rather than how it is to be
9. 360 degree performance appraisal
360 Degree Feedback is a system or process in which employees receive confidential,
anonymous feedback from the people who work around them. This post also include
information related to appraisal methods such as 720, 540, 180…
10.Forced ranking (forced distribution)
Forced ranking is a method of performance appraisal to rank employee but in order of
For example, the distribution requested with 10 or 20 percent in the top category, 70 or
80 percent in the middle, and 10 percent in the bottom.
11. Behavioral Observation Scales
Behavioral Observation Scales is frequency rating of critical incidents that worker has
PROBLEMS IN PERFORMANCE APPRAISAL
1. Problems with leniency and strictness:
• The leniency bias crops when some raters have a tendency to be liberal in their rating by
assigning higher rates consistently.
• Equally damaging one is assigning consistently low rates.
2. Problems with central tendency:
• Some raters appraise all the employees around the middle point of the rating scale and
they avoid rating the people higher or lower level.
• They follow play safe policy because of answer ability to management or lack of
knowledge about the job and person he is rating or least interest in his job.
3. Problems with personal prejudice:
If the rater dislikes any employee, he may rate them at the lower end and this may distort
the rating purpose and affect the career of these employees.
4. Problems with halo effect:
• To minimizing the halo effect, you should appraise all the employees by one trait before
going to rate on the basis of another trait.
• A person outstanding in one area tends to receive outstanding or better than average
ratings in other areas as well, even when such a rating is undeserved
5. Problems with recent performance effect:
In general, raters remember the recent appraisal of the employee and they usually follow
appraisal results last time.
The performance appraisal process is a process that
evaluates employee performance. Normally it compares
quality, quantity, cost, and time. Some of the things that
performance appraisal are used to do would be.
Give something tangible to the employee regarding
their work performance.
Shows what training employees need.
Determines what the employees raise might be.
There are some other things that performance appraisals do,
these are just some of them.
There are some procedures that you should put in work at
your work place. This will help the employees know what
you are expecting of them, and also establish a standard
within your work that everyone will be able to understand
and follow. Some of these things would be listed here.
Establishing performance standards
Communicate standards and expectations
Set up a system that measures actual performance
Compare employee with the standards implemented
Discuss results with employee
Make a decision on what you are going to do, or take
Now as an employee, you should not get nervous when you
hear anything about a performance appraisal or review. As
long as you have tried as hard as you can and done
everything in your capability to do your job duties, you can
take what you hear from you employer and use it to help
yourself. You can take what your employer tells you about
the appraisal and use it to help you do your job better.
Now most Performance Appraisals are held annually, but it
can be held whenever your employer sees fit. Most
companies hold their evaluations once a year because they
feel that it is too time consuming. Some feel that having it
twice a year is better because you can let the employee
know if they are doing good, or if they are doing something
that they could do better you can tell them sooner then if it
was help once a year. One good idea is when you are doing
the evaluations with the employees it is really nerve
racking for both the employee and for you. One good idea
would be to make your it is a private room and you can
handle the evaluation without interruption and where the
employee can feel comfortable asking questions.
If you are an employer you can find many examples of
great strategies in creating a good performance appraisal
process all over the Internet. There are many companies
that just make and implement these appraisals in your work
place and train your managers on how to give them out and
will show you the best way to teach your employees about
what you are expecting from them.