Objectives of Performance Appraisal

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Everything you need to know about the objectives of performance appraisal. Performance appraisal is a systematic evaluation of an individual’s performance with respect to actual performance of the job and standard performance expected by the organisation.

It is the assessment of an employee’s performance in a systematic and transparent way. It is regarded as a developmental technique used for the all-round development of employees.

Performance appraisal is undertaken for a variety of reasons. Review of organization practices shows that organizations undertake performance appraisal exercises to meet certain objectives which are in the form of salary increase, promotion, identifying training and development needs, providing feedback to employees and putting pressure on employees for better performance.

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Some of the objectives of performance appraisal are:-

1. Salary Increase 2. Promotions 3. Competency Building 4. To Increase Motivation and Productivity 5. Retain Top Talent

6. Enhance Transparency 7. Training and Development 8. Initiating Personnel Development 9. Pressure on Employees 10. Transfers.

11. Compensation Decisions 13. Personnel Research 14. Internal Communication  15. Maintaining Good Relations

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16. Maintaining an Inventory 17. Determine Rewards 19. Decision Making and 20. Feedback.

Objectives of Performance Appraisal: 20 Objectives


Objectives of Performance Appraisal – 5 Main Objectives

Performance appraisal is a systematic evaluation of an individual’s performance with respect to actual performance of the job and standard performance expected by the organisation. It is the assessment of an employee’s performance in a systematic and transparent way. It is regarded as a developmental technique used for the all-round development of employees. Performance assessment is based on past as well as potential performance of employees.

Performance appraisal is included in performance management or we can say that it is an important aspect of performance management. As we all know that the performance of the employees cannot be improved until and unless there is assessment and feedback sharing done by the management. Hence performance appraisal must be carried out with utmost care as the feedback shared under appraisal is going to be used as a stepping stone in deciding the performance management criteria for the individual.

Some of main objectives of performance appraisal:

Objective # 1. Promotions:

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Performance appraisal data is used for promoting an employee in the organisation. Whether an employee is able to take up the higher positions in the organisation or not can be identified only when the performance is assessed against the standards set for that position.

Once the performance of the employee matches the standard performance or if the organisation recognises the potential of the employees to perform at higher levels, they can be easily promoted to the next level. Hence performance appraisal helps the organisation to promote an employee in the most systematic and proper way.

Promotion is liked by everyone and each employee has a dream or we can say has a career path to walk on. He always decides a particular designation for himself during his tenure with a particular organisation. By doing this, he plans his performance and tries to achieve the goals set for him by the organisation and whatever goals he has set for himself.

This helps the management while promoting or demoting employees from a particular position. The actual performance of the employee is compared against the standard performance and if it satisfactory he is promoted to the next level in the hierarchy.

Objective # 2. Competency Building:

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As performance appraisal identifies the potentialities of the employees, it helps the management to plan competency mapping and competency management programmes for the employees, since the output given by the employees do not necessarily state the competencies that each employee possesses. This helps the organisation to enhance the performance of the employees in a better way. Competency building is nothing but making the employee rich skills wise and knowledge wise.

Once the employee obtains desired level of competencies for doing a specific task, the objective of performance management is completed. The performance appraisal helps the management know what level of competencies does the employee possess and hence this data is used to design individual performance plans for a year for a particular employee.

Objective # 3. To Increase Motivation and Productivity:

Performance appraisal helps the employees to identify the skills necessary for them to achieve the set goals. When employees discover what it takes to be a better performer at the job, they are more motivated and enthusiastic to come to work every day and perform beyond their limits for meeting organisational as well as personal goals.

This motivates the employees and also brings about a major change in their productivity levels. We all know that motivated employee tends to perform beyond his limits at the work. Organisations always want such employees working for it.

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Performance appraisal and performance management must do this task of motivating the employees towards better performance each day. Appraisal process should be as transparent as possible and also managers should take care that they are free from biases as far as possible.

The meaning of appraisal is assessing, recognizing the performance made by the employees and hence it must be done that way. Performance management later on must also focus on improving the morale and thereby productivity of the employee at work.

Objective # 4. To Retain Top Talent:

Retention has always been a critical issue for the organisation. Usually what happens is when an employee starts performing well he starts looking for suitable opportunities outside and ultimately leaves your organisation for an opportunity outside. To avoid this and reduce the rate of attrition, it is recommended that the performance of the employees is assessed closely, their hidden strengths are identified and they are provided with a conducive environment which will enable him to perform and remain committed to the organisation for the longer period of time.

Retention is the biggest issue that organisations are facing today. Once the employees achieve specific skills, they tend to leave their jobs and join some other organisation for better prospects. And here the role of performance management begins.

The process of managing and improving the performance must be such that it should increase the skills and knowledge of the employees and at the same time it should also focus on improving the commitment and belongingness of the employees towards the organisation.

Objective # 5. To Enhance Transparency:

Performance and development are very critical issues and must be handled with utmost care. Employees will not trust you and your process until each and every element in the process is crystal clear to them. Once they understand the process well and know that the process is true and fair, they tend to give their 100% for the overall achievement of the objectives set for the process, for the individual and organisation as a whole.

Maintaining transparency in the process always gives a sense of confidence and trust to the employees. When the employees trust the process, the chance of better performance increases. The employees become more independent and remain active in the performance development process.

The goals, vision, mission of the organisation must be shared with the employees during the performance improvement process. This helps the employees to understand the larger picture and their role in the overall performance improvement initiative.


Objectives of Performance Appraisal – Top 14 Objectives

The various objectives of performance appraisal are as follows:

1. To identify strengths and weaknesses of employees in their job knowledge, skills and capabilities.

2. To estimate the overall effectiveness of employees in performing their tasks, jobs.

3. To help the employees to overcome their weaknesses and to improve themselves so that they can perform their jobs more effectively and efficiently as per the expectation of their management.

4. To generate adequate feedback of the work performance of the employees from their intermediate superiors to the employers as well as to the management.

5. To make necessary information regarding the work performance of the employees in order to identify employees for the purposes of proper, suitable training and development programmes.

6. To provide necessary inputs to the systems of rewards, salary administration, t retirement, termination, retrenchment, etc.

7. To suggest the measures to improve the performance of employees when they are not found to be up to the mark during the review period.

8. To plan career development, human resources planning based on the work performance of employees.

9. To provide some controlling regulatory measures on the basis of performance appraisals.

10. To suggest measures to prevent grievances.

11. To help increase the analytical abilities of the supervisors.

12. To help the supervisors to have proper understanding about the employees working under them.

13. To generate significant and valid information about employees.

14. To help in creating the desirable culture and tradition in the organisation.

Thus, in general, the objectives of performance appraisal can broadly be classified as:

(1) The evaluation objectives,

(2) The development objectives, and

(3) Controlling objectives.

Whatever may be the objectives, the performance appraisal should provide answers to the important questions and guide to the employee as well as the management or the organisation.

(1) How well is an employee doing?

(2) What he is expected to do?

(3) What are the opportunities offered to an employee to fulfil the expectations?

(4) How well are the employees doing individually and collectively?

(5) What can the management or the organisation do in order to help its employees to do better for their organisation and themselves?

(6) What is the reward given in accordance with the performance?

(7) Is any training possible for effective job performance?

By making effective use of performance appraisal, an organisation can:

a. Improve productivity,

b. Get performance feedback,

c. Promote internal control through timely detection of the weaknesses of the employees,

d. Create a positive work environment,

e. Provide necessary training for employee development,

f. Stimulate, recognise and reward achievements,

g. Provide necessary objective measures for improvement of work/job performance,

h. Furnish information for other human resource sub-systems,

i. Provide necessary data for human resource planning,

j. Distinguish effective and ineffective performers,

k. Maintain good management-employee relations,

l. Ensure organisational effectiveness through correcting employees for standard and improved performance,

m. Bring about better operational, business results.

There is no doubt that performance appraisal is an important tool and technique. Performance appraisal system can be put to a very wide range of utility covering the entire spectrum of human resource functions in an organisation. It facilitates in many ways the accomplishment of objectives of employees as well as of the organisation wherein they work.


Objectives of Performance Appraisal – 5 Important Objectives Undertaken by Organizations

When employees perform their jobs in an organization, it is essential to see whether their performance is satisfactory or not. This is done through performance appraisal which is a systematic evaluation of performance of employees by superiors or others familiar with their performance.

Performance appraisal practices show that organizations undertake performance appraisal to meet certain objectives which are as follows:

Objective # 1. Salary Increase:

Performance appraisal plays a key role in making decision about salary increase. Normally, salary increase of an employee depends on how he is performing his job. Performance appraisal discloses how well the employee is performing. In those organizations where salary increase is based on performance, role of performance appraisal in salary increase is much more than the organization where salary increase is based on period spent on the job. In the latter type of organization, annual salary increase is fixed in advance.

Objective # 2. Promotion:

Performance appraisal plays a significant role where promotion is based on merit. Most of the organizations often use a combination of merit and seniority for promotion. Performance appraisal discloses how an employee is working in his present job and what are his strong and weak points. In the light of these, it can be decided whether he can be promoted to the next higher position. Similarly, performance appraisal can be used for demotion and discharge of an employee.

Objective # 3. Training and Development:

Performance appraisal tries to identify the strengths and weaknesses of an employee on his present job. This information can be used for devising training and development programmes appropriate for overcoming weaknesses of the employees. In fact, many organizations use performance appraisal as means for identifying training needs of employees.

Objective # 4. Feedback:

Performance appraisal provides feedback to employees about their performance. It tells them where they stand. An employee works better when he knows how he is working; how his efforts are contributing to the achievement of organizational objectives. This works in two ways- First, the employee gets feedback about his performance and he may try to overcome his deficiencies which will lead to better performance.

Second, when the employee gets feedback about his performance, he can relate his work to the organizational objectives. This provides him satisfaction that his work is meaningful. Thus, given the proper organizational climate, he will try his best to contribute maximum to the organization.

Objective # 5. Pressure on Employees:

Performance appraisal puts a sort of pressure on employees for better performance. If the employees are conscious that they are being appraised in respect of certain factors and their future largely depends on such appraisal, they tend to have positive and acceptable behaviour in this respect. Thus, appraisal can work automatically as control device.


Objectives of Performance Appraisal – Within an Organisation

Performance appraisal can be used to meet different objectives within an organisation.  

a. Promotion – Performance appraisal gives management a means of identifying employees for promotion. Past appraisals together with other background information will enable management to select employees for promotion.

b. Transfers – In government service, employees are transferred due to administrative reasons. It is also used to improve performance of an employee and also provide carrier opportunities to deserving candidates.

c. Compensation decisions – Increase in pay and other benefits when based on merit, brings a message to employee regarding his value to the organisation as well as standard of comparison with peers.

d. Employee training needs – Performance appraisal indicates the strengths and weaknesses, i.e., areas for improvement of the employee. The management can assess training needs to improve current job performance as well as future.

e. Personnel research – Performance appraisal provides valuable information on strengths, and weaknesses of employee,’ traits of the employee, effectiveness of training programme, motivation level of employee, involvement of superior in performance feedback etc. which can be used in personnel research.

f. Effectiveness of HR activities such as selection, training, development can be judged through performance appraisal.

g. Internal communication – Performance appraisal is a dialogue between the manager and employee and can be used to improve communication between manager and the employee. Appraisal interviews and reports are effective means of communication to the employee and can result in improved performance.

h. Maintaining good relations – Performance appraisal creates a healthy atmosphere in the organisation. Good performers could be motivated to do better and poor performers are encouraged to do away with their weaknesses and limitations.


Objectives of Performance Appraisal – Top 15 Objectives

Performance appraisal is undertaken for a variety of reasons. Review of organization practices shows that organizations undertake performance appraisal exercises to meet certain objectives which are in the form of salary increase, promotion, identifying training and development needs, providing feedback to employees and putting pressure on employees for better performance.

1. Salary increase – Performance appraisal plays a role in making decision about salary increase. Normally salary increase of an employee depends on how he is performing his job. There is continuous evaluation of his performance either formally or informally. In a small organization, since there is a direct contact between the employee and the one who makes decisions about salary increase, performance appraisal can be informal process.

However in a large organization where such contact hardly exists, formal performance appraisal has to be undertaken. This may disclose how well an employee is performing and how much he should be compensated by the way of salary increase

2. Promotion – Performance appraisal plays a significant role where promotion is based on merit. Most of the organizations often use a combination of merit and seniority for promotion. Performance discloses how an employee is working in his present in his job and what his strong and weak points are. In the light of these, it can be decided whether he can be promoted to the next higher position and what additional training will be necessary for him. Similarity performance appraisal can be used for transfer, demotion and discharge of an employee.

3. Training and Development – Performance appraisal tries to identify the strengths and weaknesses of an employee on his present job. This information can be used for devising training and development programmes appropriate for overcoming weaknesses of the employees. In fact, many organizations use performance appraisal as means for identifying training needs of employees.

4. Feedback – Performance appraisal provides feedback to employees about their performance. It tells the about where they stand. Person works better when he knows how he is working; how his efforts are contributing to the achievement of organizational objectives.

This works in two ways:

(i) The persons gets feedback about his performance and he try to overcome his deficiencies, which lead to better performance.

(ii) When the person gets his feedback about his performance, he can relate his work to the organizational objectives.

This provide him satisfaction about his work is meaningful. Thus, given the proper organizational climate, he try his best to contribute maximum to the organization.

5. Pressure on employees, performance puts a sort of pressure on employees for better performance. If the employees are conscious that they are being appraisal in respect of certain factors and their future largely depends on such appraisal, they tend to have positive and acceptable behavior in this respect.

6. Mutual, realistic, goal setting.

7. Allocation of resources.

8. Motivating and rewarding employees. Give employees feedback and guidance.

9. Maintain fairness.

10. Coach and develop employees

11. Comply with equal opportunities regulations.

12. Helping the employees to overcome their weaknesses an improve their strengths.

13. Creating a desirable developmental and healthy culture and traditions in the organization.

14. Generate significant, relevant, free and valid information about employees.

15. Providing inputs to the system or rewards-increments, appreciation, additional responsibility, promotion etc.

Above roles of Performance Appraisal are quite important. However, these can be performed only when there is systematic performance appraisal and various relevant decisions are made objectively in the light of result of performance Appraisal to be systematic and objective in performance appraisal.

To be systematic and objective in performance appraisal managers require an understanding of various intricacies involved in performance appraisal like methods of performance appraisal, problems in performance appraisals and how these problems can be overcome. Thus, appraisal can work automatically as control device.


Objectives of Performance Appraisal 

i. Maintaining an Inventory – To enable an organisation to maintain inventory of the number and quality of all managers and to identify and meet their training needs and aspirations.

ii. Initiating Personnel Development – To initiate personnel development by having discussions with individual employees and line managers and identifying the reasons for faulty performance.

iii. Improving the Employee Performance – To suggest ways of improving the employee’s performance when he is not found to be up to the mark.

iv. Determine Rewards – To determine increment rewards and provide a reliable index for promotions and transfers to positions of greater responsibility.

v. Suitable Training and Development – To serve as a guide for formulating a suitable training and development programme. Performance appraisal can inform employees about their progress and tell them what skills they need to develop, to become eligible for pay raises or promotions or both.

vi. Decision Making – To help in taking decisions in respect of premature retirements or of giving extension in service to the employees.


Objectives of Performance Appraisal – 5 Broad Objectives

However, broadly speaking, the objectives of performance appraisal are as follows:

1. To measure and improve the job performance of an employee and to identify his/her potenti­alities for other work.

2. To identify the need and areas for further training and development of the employees.

3. To reduce the grievances among the employees.

4. To make the compensation plans more scientific and rational.

5. To help in the proper placement of the workers after the completion of their training and probation.


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