Performance Appraisal

Performance appraisal is the process of obtaining, analyzing and recording information about the
relative worth of an employee. The focus of the performance appraisal is measuring and
improving the actual performance of a employee and also the future potential of the
employee. Its aim is to measure what an employee does.
According to Flippo, a prominent personality in the field of Human resources, “performance
appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the
matters pertaining to his present job and his potential for a better job.” Performance appraisal is a
systematic way of reviewing and assessing the performance of an employee during a given
period of time and planning for his future.
It is a powerful tool to calibrate, refine and reward the performance of the employee. It helps to
analyze his achievements and evaluate his contribution towards the achievements of the overall
organizational goals.

Know Challenges in Performance Appraisal

By focusing the attention on performance, performance appraisal goes to the heart of personnel
management and reflects the management’s interest in the progress of the employees.

Objectives Of Performance appraisal:

 To review the performance of the employees over a given period of time.
 To judge the gap between the actual and the desired performance.
 To help the management in exercising organizational control.
 Helps to strengthen the relationship and communication between superior – subordinates
and management – employees.
 To diagnose the strengths and weaknesses of the individuals so as to identify the training
and development needs of the future.
 To provide feedback to the employees regarding their past performance.
 Provide information to assist in the other personal decisions in the organization.
 Provide clarity of the expectations and responsibilities of the functions to be performed
by the employees.

To judge the effectiveness of the other human resource functions of the organization such as
recruitment, selection, training and development.
To reduce the grievances of the employees.

Training And Development

Human Resource Management (HRM), a relatively new term, that emerged during the 1930s.
Many people used to refer it before by its traditional titles, such as Personnel Administration or
Personnel Management. But now, the trend has changed. It is now termed as Human Resource
Management (HRM). Human Resource Management is a management function that helps an
organization select, recruit, train and develops.

HUMAN RESOURCE MANAGEMENT

Human Resource Management is a management function that helps an organization select,

recruit, train and develops.HUMAN RESOURCE MANAGEMENT

Human Resource Management is defined as the people who staff and manage organization. It
comprises of the functions and principles that are applied to retaining, training, developing, and
compensating the employees in organization. It is also applicable to non-business organizations,
such as education, healthcare etc. Human Resource Management is defined as the set of
activities, programs, and functions that are designed to maximize both organizational as well as
employee effectiveness

Scope of HRM without a doubt is vast. All the activities of employee, from the time of his entry
into an organization until he leaves, come under the horizon of HRM.
The divisions included in HRM are Recruitment, Payroll, Performance Management, Training
and Development, Retention, Industrial Relation, etc. Out of all these divisions, one such
important division is training and development.

TRAINING AND DEVELOPMENT

is a subsystem of an organization. It ensures that randomness is reduced and learning or
behavioral change takes place in structured format.

TRADITIONAL AND MODERN APPROACH OF

TRAINING AND DEVELOPMENT
Traditional Approach

Most of the organizations before never used to believe in training. They were holding the
traditional view that managers are born and not made. There were also some views that training
is a very costly affair and not worth. Organizations used to believe more in executive pinching.
But now the scenario seems to be changing.
The modern approach of training and development is that Indian Organizations have realized
the importance of corporate training. Training is now considered as more of retention tool than a
cost. The training system in Indian Industry has been changed to create a smarter workforce and
yield the best results.
TRAINING AND DEVELOPMENT OBJECTIVES

The principal objective of training and development division is to make sure the availability of a
skilled and willing workforce to an organization. In addition to that, there are four other
objectives: Individual, Organizational, Functional, and Societal.

Individual Objectives

help employees in achieving their personal goals, which in turn, enhances the individual
contribution to an organization

Organizational Objectives

assist the organization with its primary objective by bringing individual effectiveness.

Functional Objectives

maintain the department’s contribution at a level suitable to the organization’s needs.

Societal Objectives

ensure that an organization is ethically and socially responsible to the needs and challenges of
the society.

Performance Appraisal
Performance Appraisal is the systematic evaluation of the performance of employees and to
understand the abilities of a person for further growth and development. Performance appraisal is
generally done in systematic ways which are as follows:

1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.
Objectives of Performance Appraisal

Performance Appraisal can be done with following objectives in mind:

1. To maintain records in order to determine compensation packages, wage structure,

salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right job.
3. To maintain and assess the potential present in a person for further growth and
development.
4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.

Advantages of Performance Appraisal

It is said that performance appraisal is an investment for the company which can be justified by
following advantages:

1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion
programmes for efficient employees. In this regards, inefficient workers can be dismissed
or demoted in case.
2. Compensation: Per-formance Appraisal helps in chalking out compensation packages
for employees. Merit rating is possible through performance appraisal. Performance
Appraisal tries to give worth to a performance. Compensation packages which includes
bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on
performance appraisal. The criteria should be merit rather than seniority.
3. Employees Development: The systematic procedure of performance appraisal helps the
supervisors to frame training policies and programmes. It helps to analyse strengths and
weaknesses of employees so that new jobs can be designed for efficient employees. It
also helps in framing future development programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the
validity and importance of the selection procedure. The supervisors come to know the
validity and thereby the strengths and weaknesses of selection procedure. Future changes
in selection methods can be made in this regard.
5. Communication: For an organization, effective communication between employees and
employers is very important. Through performance appraisal, communication can be
sought for in the following ways:
a. Through performance appraisal, the employers can understand and accept skills of
subordinates.
b. The subordinates can also understand and create a trust and confidence in
superiors. ---
c. It also helps in maintaining cordial and congenial labour management
relationship.
d. It develops the spirit of work and boosts the morale of employees.
 All the above factors ensure effective communication.

6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating

performance of employees, a person’s efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him to improve his
performance in the future.