Abstract: Performance appraisals are a critical part of identifying and managing employee and company performance. It's important for companies to manage their resources effectively. A big part of this involves performance appraisals. When the company understands how their employees are performing, the company can improve the use of resources. Performance appraisals can help employees understand how to improve their contributions to the company.
A well prepared and well-delivered performance appraisal consists of three main dimensions. These three dimensions include identifying performance problems, measuring worker performance, and managing worker performance (Gomez-Mejia, Balkin, & and Cardy, 2010, p. 212). In addition, performance appraisals can be used for administrative purposes and or developmental purposes. Performance appraisals can be used to make administrative decisions concerning work conditions, promotions, termination, and rewards. Furthermore, performance appraisals can be used in developing programs for the following: job skill improvement, performance analysis feedback, work behavior advising, job training, and learning opportunities.
There are several characteristics that go into making performance appraisals effectiveÂ (Gomez-Mejia, Balkin, & and Cardy, 2010, p. 213). First, managers need to be supportive of the appraisal process so employees will understand how important the process is. Second, managers need to be willing to put considerable time into the appraisal process. Even though a main performance appraisal may only occur one or two times a year, a day to day ongoing dialogue needs to take place between managers and workers for the appraisal process to be effective. Third, an effective performance appraisal will give the employees an active role. For example, employees may be asked to provide information as well as feedback concerning the effectiveness of the appraisal process. Fourth, the process needs to be consistent and objective. Fifth, the process needs to be continuous. For example, daily informal dialogue concerning appraisal issues can increase awareness so problems can be managed. In addition, regularly scheduled formal performance appraisal interviews provide the opportunity for the review of performance issues. Seventh, the benefits of an effective performance appraisal system need to outweigh the costs of implementing the program. A well-prepared and well-developed performance appraisal process will ensure optimal results aiding the company in administration decision making and employee development.
Preparation: Choosing the Right Performance Appraisal
In preparing for a formal performance appraisal, there are several things that can be done to ensure the process is beneficial to the employee and the company. First, the manager needs to determine what the purpose of the performance appraisal is. For example, is the purpose to evaluate the employee performance in order to make administrative decisions or to aid in employee development? Once the manager answers these questions, he can decide what appraisal system to use. For example, if the manager needs to appraise the employee in order to make an administrative decision, the relative or trait appraisal systems might be good to useÂ (Gomez-Mejia, Balkin, & and Cardy, 2010, p. 221). Further, sometimes managers need to differentiate among workers in order to determine the employee most deserving of a promotion. In this case, the manager can use the relative judgment performance appraisal. This type of appraisal can help the manager rate employees from best to worst in order to make an administrative decision concerning employee promotion. Similarly, the trait appraisal instrument can aid the manager is rating an employee on specifically defined traits relative to job performance. Rating traits can also be used to rate employee performance compared with other employees. On the other hand, if the purpose is for employee development, the manager might decide to use the absolute or behavior appraisal systemsÂ (Gomez-Mejia, Balkin, & and Cardy, 2010, p. 221). For example, if the manager has a set of performance standards she needs to evaluate employees on, she might choose the absolute judgment appraisal system. This appraisal system focuses on dimensions of performance for each employee rather than on rating employees in comparison to one another. The goal here is to make sure the employee meets the minimum performance standards of the company for their position. Managers rank employees by making judgments based on observations. Specific feedback is given to each employee regarding their success as well as any areas they need to work on. Along the same lines, the behavior performance appraisal system can be used to rate employeesâ€™ behavior at work. Again, the manager rates an employeesâ€™ individual behavior based on observations concerning specific behavioral standards relevant to the job. The employee is ranked based on the frequency of the exhibited behavior.
Preparation: Effective Communications
In preparing for a formal performance appraisal, managers need to make sure employees have a clear understanding of what they are being rated on. Clearly defining the performance expectations based on job analysis helps the employee understand what is being expected. This helps make sure everyone is on the same page with respect to the nature of the appraisal system. For example, for administrative decision purposes, the relative or traits tools might be used. In this case, the manager needs to make sure employees understand any quotas or specific characteristics the employee needs to meet or exhibit. On the other hand, for developmental purposes, the manager needs to be clear on what behaviors or performance standards they will be expected to individually exhibit. Once the manager understands the purpose of the appraisal, the type of appraisal system to use, and has clearly defined the appraisal standards to other managers and all employees, the manager can begin conducting the appraisals. When implementing the performance appraisal system, there needs to have been enough time for the manager to make observations and record frequency of performance. Managers might have a meeting to initially explain the appraisal system and what is expected of employees. Then periodically throughout the year the manager can record observations down so when itâ€™s time to conduct a formal appraisal, the manager and the employee can give and provide adequate feedback for the system to be productive and effective.Â
Gomez-Mejia, L., Balkin, D., & and Cardy, R. (2010). Managing Human Resources, Sixth Edition. Indianapolis: Prentice Hall.
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