Objectives of Performance Appraisal

Encouraging Performance Improvement.

How can anyone improve if he doesn’t know how he’s doing right now? A good performance appraisal points out areas where individuals need to improve their performance.

Motivating Superior Performance.

This is another classic reason for having a performance appraisal system. Performance appraisal helps motivate people to deliver superior performance in several ways. First, the appraisal process helps them learn just what it is that the organization considers to be ‘‘superior.’’ Second, since most people want to be seen as superior performers, a performance appraisal process provides them with a means to demonstrate that they actually are. Finally, performance appraisal encourages employees to avoid being stigmatized as inferior performers (or, often worse, as merely ‘‘average’’).

Setting and Measuring Goals.

Goal setting has consistently been demonstrated as a management process that generates superior performance. The performance appraisal process is commonly used to make sure that every member of the organization sets and achieves effective goals.

Counselling Poor Performers.

Not everyone meets the organization’s standards. Performance appraisal forces managers to confront those whose performance is not meeting the company’s expectations.

Determining Compensation Changes.

This is another classic use of performance appraisal. Almost every organization believes in pay for performance. But how can pay decisions be made if there is no measure of performance? Performance appraisal provides the mechanism to make sure that those who do better work receive more pay.

Encouraging Coaching and Mentoring.

Managers are expected to be good coaches to their team members and mentors to their proteges. Performance appraisal identifies the areas where coaching is necessary and encourages managers to take an active coaching role.

Supporting Manpower Planning.

Well-managed organizations regularly assess their bench strength to make sure that they have the talent in their ranks that they will need for the future. Companies need to determine who and where their most talented members are. They need to identify the departments that are rich with talent and the ones that are suffering a talent drought. Performance appraisal gives companies the tool they need to make sure they have the intellectual horsepower required for the future.

Determining Individual Training and Development Needs.

If the performance appraisal procedure includes a requirement that individual development plans be determined and discussed, individuals can then make good decisions about the skills and competencies they need to acquire to make a greater contribution to the company. As a result, they increase their chances of promotion and lower their odds of layoff.

Determining Organizational Training and Development Needs.

Would the organization be better off sending all of its managers and professionals through a customer service training program or one on effective decision making? By reviewing the data from performance appraisals, training and development professionals can make good decisions about where the organization should concentrate company-wide training efforts.

Validating Hiring Decisions.

Is the company hiring stars, or is it filling itself with trolls? Only when the performance of newly hired individuals is assessed can the company learn whether it is hiring the right people.

Providing Legal Defensibility for Personnel Decisions.

Almost any personnel decision—termination, denial of a promotion, transfer to another department—can be subjected to legal scrutiny. If one of these is challenged, the company must be able to demonstrate that the decision it made was not based on the individual’s race or handicap or any other protected aspect. A solid record of performance appraisals greatly facilitates legal defensibility when a complaint about discrimination is made.

Improving Overall Organizational Performance.

This is the most important reason for an organization to have a performance appraisal system. A performance appraisal procedure allows the organization to communicate performance expectations to every member of the team and assess exactly how well each person is doing. When everyone is clear on the expectations and knows exactly how he is performing against them, this will result in an overall improvement in organizational success.

Need for employee training

These appraisals also identify the necessary training and development needs to employees to close the gap between current performance and desired performance.

60% employees say performance appraisals are a waste of time, 70% say no idea how they are evaluated: Survey - Mar 17, 2017

Organisations need to make staff appraisals more transparent and useful as most employees are neither fully conversant with the process nor do they see them as a worthy task to perform.

Majority of the employees find performance reviews in their organisations opaque, cumbersome and a waste of time, reveals a TimesJobs survey, 'The Performance Review Puzzle', of more than 1,200 employees in various kinds of organisations.

Sixty per cent employees said the performance review was a waste of time.

Most employees are not even fully aware of the process of evaluation. Seventy per cent said they did not know how they were evaluated. Not surprisingly, 85 per cent were not aware of the end-to-end process of performance review.

Ninety per cent found performance review forms complex and cumbersome.

Outcome of appraisals never left 35 per cent satisfied while 25 per cent had been rarely satisfied. Only 10 per cent said they were always satisfied. Thirty per cent were sometimes satisfied.

A huge 95 per cent said they were not trained by the human resource department to fill in the review form.

https://economictimes.indiatimes.com/jobs/60-employees-say-performance-appraisals-are-a-waste-of-time-70-say-no-idea-how-they-are-evaluated-survey/articleshow/57687570.cms