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INTRODUCTION People differ in their abilities and their aptitudes. There is always some difference between the quality and quantity on the same work on the same job being done by two different people. Performance appraisals of employees are necessary to understand each employees abilities, competencies and relative merit and worth for the organization. Performance appraisal rates the employees in terms of their performance. Performance appraisals are widely used in the society. The history can be dated back to the 20th century and then to the second world war when the merit rating was used for the first time. An employer evaluating their employees is a very old concept. It is an indispensable part of performance measurement. Performance appraisal is necessary to measure the performance of the employees and the organization to check the progress towards the desired goals and aims. The latest mantra being followed by organizations across the world being "get paid according to what you contribute" the focus of the organizations is turning to performance management and specifically to individual performance. Performance appraisal helps to rate the performance of the employees and evaluate their contribution towards the organizational goals. If the process of performance appraisals is formal and properly structured, it helps the employees to clearly understand their roles and responsibilities and give direction to the individuals performance. It helps to align the individual performances with the organizational goals and also review their performance. Performance appraisal takes into account the past performance of the employees and focuses on the improvement of the future performance of the employees. Here at naukrihub, we attempt to provide an insight into the concept of performance appraisal, the methods and approaches of performance appraisal, sample performance appraisal forms and the appraisal software available etc. An attempt has been made to study the current global trends in performance appraisal.

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OBJECTIVES 1. What is Performance Appraisal? 2. List the aims in appraising performance. 3. What should a performance system be? 4. What are the standards and indicators of performance appraisal? 5. How can the performance appraisal system help? 6. Why Appraise Performance? 7. What are the appraising performance techniques?

III.

DEFINITION OF TERMS a. b. c. d. Appraisal- A valuation by an authorized person; an appraisement. Equitable- Law relating to or valid in equity, as distinct from common law or statute law. Correlated- To put or bring into causal, complementary, parallel, or reciprocal relation.
Participatory- affording the opportunity for individual participation; "participatory democracy"

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SUMMARY 1. What is Performance Appraisal?

A performance appraisal is a review and discussion of an employee's performance of assigned duties and responsibilities. The appraisal is based on results obtained by the employee in his/her job, not on the employee's personality characteristics. The appraisal measures skills and accomplishments with reasonable accuracy and uniformity. It provides a way to help identify areas for performance enhancement and to help promote professional growth. It should not, however, be considered the supervisor's only communication tool. Open lines of communication throughout the year help to make effective working relationships. Each employee is entitled to a thoughtful and careful appraisal. The success of the process depends on the supervisor's willingness to complete a constructive and objective appraisal and on the employee's willingness to respond to constructive suggestions and to work with the supervisor to reach future goals.

2.

List the aims in appraising performance. Generally, the aims of a performance appraisal are to:

Give employees feedback on performance. Identify employee training needs. Document criteria used to allocate organizational rewards. Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, bonuses, etc. Provide the opportunity for organizational diagnosis and development. Facilitate communication between employee and employer. Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements. To improve performance through counseling, coaching and development.

3.

What should a performance system be? Correlated with the organization's philosophies and mission Cover assessment of performance as well as potential for development Look after the needs of both the individual and the organization Help create a clean environment Rewards linked to achievements Generate information for personnel development and career planning Suggesting appropriate person-task matching

4.

What are the standards and indicators of performance appraisal?

Mutual goal Reliable and consistent Accurate and equitable Practical and simple format Regular and routine Participatory and open Rewards Timely feedback Impersonal feedback Noticeable feedback Relevance and responsiveness Commitment

5.

How can the performance appraisal system help?

Promote better understanding of an employee's role and clarity about his or her functions give a better understanding of personal strengths and weaknesses in relation to expected roles and functions Identify development needs of an employee Establish common ground between the employee and the supervisor Increase communication Provide an employee with the opportunity for self-reflection and individual goal setting Help an employee internalize the culture, norms and values of the organization. This helps develop an identity with and commitment to the organization and prepares an employee for higher-level positions in the hierarchy Assist in a variety of personnel decisions

6.

Why Appraise Performance?

Periodic reviews help supervisors gain a better understanding of each employee's abilities. The goal of the review process is to recognize achievement, to evaluate job progress, and then to design training for the further development of skills and strengths. A careful review will stimulate employees interest and improve job performance. The review provides the employee, the supervisor, the Vice President, and Human Resources a critical, formal feedback mechanism on an annual basis, however these discussions should not be restricted solely to a formal annual review.

7.

What are the appraising performance techniques?

PERFORMANCE APPRAISAL TECHNIQUES In addition to separating them into the four general categories discussed above, different performance appraisal techniques can be classified as either past-oriented or

future-oriented. Past-oriented techniques assess behavior that has already occurred. They focus on providing feedback to employees about their actions, feedback that is used to achieve greater success in the future. In contrast, future-oriented appraisal techniques emphasize future performance by assessing employees' potential for achievement and by setting targets for both short- and long-term performance.

ASSESSMENT: A common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of objectives/attributes. In some companies, employees receive assessments from their manager, peers, subordinates, and customers, while also performing a self assessment. This is known as a 360-degree appraisal and forms good communication patterns. Trait-based systems, which rely on factors such as integrity and conscientiousness, are also used by businesses but have been replaced primarily by more objective and results-oriented methods. The scientific literature on the subject provides evidence that assessing employees on factors such as these should be avoided. The reasons for this are twofold: 1) Trait-based systems are by definition based on personality traits and as such may not be related directly to successful job performance. In addition, personality dimensions tend to be static, and while an employee can change a behavior they cannot change their personality. For example, a person who lacks integrity may stop lying to a manager because they have been caught, but they still have low integrity and are likely to lie again when the threat of being caught is gone. 2) Trait-based systems, because they are vague, are more easily influenced by office politics, causing them to be less reliable as a source of information on an employee's true performance. The vagueness of these instruments allows managers to assess the employee based upon subjective feelings instead of objective observations about how the employee has performed his or her specific duties. These systems are also more likely to leave a company open to discrimination claims because a manager can make biased decisions without having to back them up with specific behavioral information.

REFERENCE: [1] http://www.fao.org/docrep/w7505e/w7505e06.htm, [2] http://www.wpi.edu/Admin/HR/performance-appraisal.html [3] http://en.wikipedia.org/wiki/Performance_appraisal#Methods

http://www.scribd.com/doc/43384410/CHAPTER-12-Managing-the-Finance-Function-Jessa-Mae-B-Bautistaamp-John-Louie-B-Borja

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