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ISSN: 2249-7196 IJMRR/Feb 2016/ Volume 6/Issue 2/Article No-2/109-119

Almas Sabir / International Journal of Management Research & Review

*Corresponding Author www.ijmrr.com 109

UNDERSTANDING THE VALUE AND FORMATS OF PERFORMANCE

APPRAISALS

Almas Sabir* 1

1 Lecturer, University of Hail, Hail, Kingdom of Saudi Arabia.

ABSTRACT

In this paper I would like to highlight certain aspects of performance appraisal in the

organization as performance appraisal is an essential part of the human resources

department's contribution to an organization. This paper will also focus on critical needs of

remunerative justice in organizations and also the practical flaws that is available to obtain

fair and consistent reward.

Keywords: Contributions, Evaluation, Rewards, Performance appraisal.

1. INTRODUCTION

An effective appraisal may not only eliminate behaviour and work-quality problems, it can

also be motivator to an employee to contribute more. Appraisals are also very important to

help staff members to improve their performance and as an avenue by which they can be

rewarded or recognized for a job well done. In addition, they can serve a variety of other

functions, providing a launching point from which companies can clarify and shape

responsibilities in accordance with business trends, clear lines of management-employee

communication, and spur re-examinations of potentially hoary business practices.

Development of performance appraisal

While the term performance appraisal has meaning for most small business owners, it might

be helpful to consider the goals of an appraisal system. They are as follows:

1. To improve the company's productivity.

2. To make informed personnel decisions regarding promotion, job changes, and termination.

3. To identify what is required to perform a job (goals and responsibilities of the job).

4. To assess an employee's performance against these goals.

Benefits of appraisal

Appraisal offers a valuable and highly dynamic opportunity to focus on work activities and

goals, to identify and correct existing problems, and to encourage better future performance.

Thus the performance of the whole organization is enhanced. Appraisal systems exist to

improve organizational efficiency by ensuring that individuals perform to the best of their

ability, develop their potential, and earn appropriate reward. This in turn leads to improved

organizational performance.

Almas Sabir / International Journal of Management Research & Review

1. Performance appraisals can target a specific area of weakness that needs evaluation and

remediation.

2. It can also serve as a valuable tool for establishing goals that will lead to promotions and

career advancement.

3. Performance appraisals can be used to chart progress.

4. In busy companies, where everyone is taking care of business, periodic meetings between

supervisor and employee allow them to form or strengthen a relationship. Developing this

rapport opens a line of communication for the employee to use in making future suggestions

for the company or applying for promotions.

5. Performance appraisals often serve as motivational tools for employees. The company

may offer a bonus or other perk to employees who are able to improve their performance

appraisals from one period to the next.

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: Performance 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 include 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 labor management relationship.

d. It develops the spirit of work and boosts the morale of employees.

Almas Sabir / International Journal of Management Research & Review

Performance appraisal: a review and discussion of employess

1. Performance Appraisal is a review and discussion of an employee's performance of

assigned duties and responsibilities based on results obtained by the employee in their job,

not on the employee's personality characteristics. Personality should be considered only when

it relates to performance of assigned duties and responsibilities.

2. It is a structured formal interaction between a subordinate and supervisor, that usually

takes the form of a periodic interview (annual or semi-annual), in which the work

performance of the subordinate is examined and discussed, with a view to identifying

weaknesses and strengths as well as opportunities for improvement and skills development.

3. In many organizations - but not all - appraisal results are used, either directly or indirectly,

to help determine reward outcomes. That is, the appraisal results are used to identify the

better performing employees who should get the majority of available merit pay increases,

bonuses, and promotions.

4. By the same token, appraisal results are used to identify poorer performers, who may

require some form of counseling, or in extreme cases, demotion, dismissal or decreases in

pay.

Performance appraisal is generally done in systematic ways - By ARMSTRONG

Five elements are identified by Armstrong of performance management as agreement (of

employee, unit, and organizational goals), measurement, feedback, positive reinforcement

and dialogue (3). These elements ensure that the performance management process is

positive, successful and a spur to employee improvement. Key to the performance

management process are continued feedback and assessment, depicted shown in the

performance management cycle (Figure 1).

Fig. 1: The performance management cycle (recreated from Armstrong)

There are four main elements of the planning portion of the performance management cycle:

role creation and development, objective planning, assessment and development planning.

1. The first step, role creation and development, is important because an employee must

understand his or her role in the organization before the performance of that role can be fairly

assessed.

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2. By first defining the employee’s goal, a supervisor can then align the employee’s

objectives with the organizational goals.

In contrast, the annual evaluation process, which is retrospective in nature, provides no

formal opportunity for employees to receive feedback about their performance, request

development to increase their efficiency or ask for new goals during the year.

2. LITERATURE REVIEW

The amount of research regarding the topic “Performance Appraisal” is so vast. The topic is

literally not new; it is as old as the formation of the organizations. Before the early 1980’s,

majority of theoretical studies emphasized on revamping the rating system within the

organization. The actions were a great thing to reduce the chaotic of employee’s performance

appraisal (Feldman, 1981). With the passage of the time the methods and rating system

among the employees got enhanced and received an immense appreciation and attentions of

the managers.

According to a number of researchers, the enhanced and upgraded performance appraisal

procedure and method will enhance the satisfaction level of the employees and definitely will

improve the process of goal setting within the organization. After the year 1980 the biasness

among the performance appraisal system occurred outrageously and appraisal had been

granted on the favoritism or race and gender basis rather examined the knowledge, skills and

style of the work of the employee. The accuracy criteria among the performance appraisal

system clutched its grip in the start of the 1980s, where the researches were emphasized on

common psychometric biases which include the diversified rating errors like leniency, central

tendency and halo, which were termed as rating errors in the appraisal method. It has been

observed that the bias free appraisals were inevitably true or more precisely we can say more

accurate, but the concept was totally refused by the research of Hulin in 1982. According to

them the biasfree appraisals were not necessarily accurate (Murphy & Balzer,

1989). Researches which had been done in the year 1980 were found the most dominating

one which contributed the appraisal system in a great deal.

There are different views on what performance means.

According to Brumbrach (1988, cited in Armstrong, 2000):

'Performance can be actions as well as their consequences. Behaviors originate from a

performer and convert performance from a concept to an act. Not just the instruments for

results, behaviors are also outcomes in their own right - the product of mental and physical

effort applied to tasks - and can be judged apart from results.

Following this, Armstrong (2000) emphasizes the need for managers to deal with the

potential of employees and accomplishments while managing performance. Above all,

performance should be about the decision and action taken with available information at any

existing situation.

1. Performance Management System (PMS): The concept of performance management

has contributed a lot in the development Human Resource Management in recent years. The

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concept was first coined by Beer and Ruh in 1976. However, it is barely in the mid 1980's

that it had been accepted as a distinctive approach.

Fig. 2: Performance Management System

2. Performance Appraisal System (PAS): Performance appraisal also known as

performance review, formally documents the achievements of an individual with regards to

set targets. It is a component of PMS. The system has become an essential management tool

in today's organizations. Managing employees' performance can be said to be as important as

any other work that all managers execute during the year. According to Karol (1996)

performance appraisal includes a communication event planned between a manager and an

employee specifically for the purpose of assessing that employee's past job performance and

discussing areas for future improvement.

3. History of PAS: The history of performance appraisal is fairly concise. Appraisal really

began with the Second World War. It was used to assess results. Dulewicz (1989) says that

there is an indispensable human inclination to judge the work of other people as well as one's

own work. It can thus be said that appraisal is both unavoidable and universal. Even without

the existence of a planned appraisal system, one can have a tendency and find it natural to

evaluate the job performance of another easily and subjectively.

4. Basic Performance Appraisal Techniques: A performance appraisal can be an important

process for the employee and the manager. By understanding and using basic performance

appraisal techniques, a manager can create a useful evaluation that assists the employee's

development. The basic techniques of a performance appraisal can be used together or

separately as an evaluation tool.

a. Ongoing Data: According to the online business education resource Open Learning

World, keeping an ongoing record throughout the year of employee performance can help

managers highlight the positives and negatives during appraisal time. Maintaining detailed

notes throughout the year and referring to those notes at appraisal time will result in a well-

rounded and accurate account of performance.

b. Self-Evaluation: According to management consulting organization, employee self-

evaluation can be valuable to the overall review and easy for a manager to administer. A self-

evaluation commonly consists of a preprinted form requiring the employee to rate his

performance based on several questions. There may be an essay section as well. Self-

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evaluations help managers see if employees share the same views about productivity.

Discrepancies can be discussed at the appraisal meeting.

c. Interaction: According to the Free Management Library, the interaction between manager

and employee in regard to employee performance should be an ongoing process. Managers

should bring up performance issues as they arise, rather than wait until evaluation time to

point them out. At appraisal time, the manager and employee should review their notes and

discuss how the solutions for employee issues helped or hindered employee development.

d. Team Evaluations: Tool pack Consulting recommends using a form of team evaluation

known as a peer review. This consists of a small group of the employee's co-workers giving

their opinions on her performance in a panel setting. Not only do workers gain a better

perspective of the jobs performed by their peers, but they also get the opportunity to openly

air grievances. This does not need to be used as the only form of appraisal, but it is a basic

appraisal method that can have valuable insight for the employee in a nonthreatening and

constructive way.

Fig. 3: Six Steps of the Performance Appraisal Process

Step one: Preparation

The key to success in any endeavor is preparation. In this case, preparation means sitting

down and creating objectives for the performance period. We’ve got to ensure that people

know what's expected of them if we ever expect them to achieve it.

Step two: Assessment

A critical manager responsibility is assessing and giving timely feedback to your staff on

their performance. There are many benefits to doing this. Feedback on performance that is

given as soon as possible has proven to be the most effective. It’s not fair or effective to tell

someone how she messed up or (more rarely how well she did, weeks after the job is done.

Let people know quickly so they can either address the error or replicate the success.

Almas Sabir / International Journal of Management Research & Review

Step three: Reviewing documents

Before you actually do sit down with the employee, review all your documentation from the

year. Take a look again at the objectives that you and the employee agreed to and

documented at the beginning of the year. Look for any commendations or letters you may

have received about the employee during the year.

Step four: Appropriate setting

Make sure that you have an appropriate setting in which to deliver the appraisal. The most

commonly used location, a manager's office, is often the worst place. It’s not neutral territory

(remember that principal's office analogy), and no matter how much rapport-building you do

or how long you've worked with the employee, it’s still "your turf."

Step five: Deliver it clearly

Deliver the appraisal in simple language. Don't use code or jargon, and don’t mince words.

Don't dance around the issue at hand even if the appraisal is not as positive as the employee

might have hoped. She'll pick up on your discomfort like a shark sensing blood in the water.

If she feels that you're not confident in your appraisal, she may think that there is a last-

minute chance to improve it. This isn't a meeting to renegotiate the objectives or the

standards for performance that were set at the beginning of the year.

Step six: Encouragement

At the conclusion of the performance appraisal meeting, which also marks the end of one

performance appraisal cycle and the beginning of the next, your job is to encourage? You

want to motivate the employee to continue doing that which he does well and to improve in

the areas where there is room for growth. This is the best way to make these meetings

productive and positive. Even if the person’s appraisal has not been as high as he might have

hoped, remind the employee that he is still valued and that you'll support him in his

development.

Five ways to deal with a poor appraisal

Bad appraisals, like bad hair days (one of those days when nothing seems to be going right),

happen to the best of us. Quitting is not a solution. Rather, take a good look at performance

and concentrate on the course ahead.

Look Within: The first step in dealing with a bad appraisal is to keep an honest mindset and

introspect about your performance. "First ask yourself the question: 'What is wrong with

me?'. Once you attack that, other things usually fall into place," says Dabur India HR head A

Sudhakar.

Talk to the Boss: Speak to the boss about the performance review. "There is a good chance

your boss may not have remembered critical activities and initiatives you have undertaken

Roy, senior vice president, human resource, Reliance Broadcast Network.

Take it in your Stride: There is a good chance that your boss' critical evaluation is spot on.

"Try never to take these critiques personally and quit. That may be your biggest mistake.

Consider consulting another senior colleague or a mentor," says Roy.

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Plan Ahead: "Be actively involved in setting your targets for the year ahead based on your

strengths," says S Roy, a midlevel manager in an IT firm. Also, periodically review your

performance with your boss. That way, there will be fewer unpleasant surprises.

Move on Gracefully: At times, reasons not connected with your performance affect the

appraisal you deserve. "You can bring up the issue with your bosses. But if nothing comes of

it, it's time to move on," says Sudhakar. But don't make an ugly exit. "You never know when

it can come back to haunt you,"

LINKING APPRAISAL TO THE REWARD SCHEME

The appraisal process may be linked to a reward scheme whereby employees or managers

earn some incentives, such as promotion or financial incentives if targets are met.

OBJECTIVES OF A REWARD SCHEME

What do organizations hope to achieve from a reward scheme? The following are among the

most important objectives:

a. To support the goals of the organization by aligning the goals of employees with these.

b. To ensure that the organization is able to recruit and retain sufficient number of employees

with the right skills.

c. To motivate employees.

d. To align the risk preferences of managers and employees with those of the organization.

e. To comply with legal regulations.

f. To be ethical.

g. To be affordable and easy to administer.

3. METHODOLOGY

Research Methodology Used to Evaluate Employee Performance Appraisal Systems are

as follows:

The evaluation methodology collaborates the original employee evaluations and performance

appraisals through supporting multiple research reporting measures.

1. Correlating Data and Appraisals: Tracking the staff members with negative feedback

during evaluations and noting the types of reprimands and retraining necessary to improve

work skills or performance allows administrative officers a chance to correlate the negative

comments with the requests for improvement. Long-term correlations allow tracking of the

employees' improvement or the staff fired after failed attempts at remediation.

2. Supervisor Evaluations and Self-Assessments: The supervisors offer the viewpoint of a

middle- to upper-level management evaluator. Both have a unique stake in the appraisal

process and also experience in dealing with a variety of appraisal system users. Grouping

both workers and supervisors into separate and anonymous feedback groups provides candid

opinions on the perceived validity of the appraisal system. While some viewpoints offer only

Almas Sabir / International Journal of Management Research & Review

biased information, common threads and repeated comments do provide validity for some of

the assessment areas.

3. Direct Observation: Meeting with the outside assessment team prior to the visit focuses

the evaluation on key issues noted on the in-house assessment. Direct observation methods by

outside teams using video of the workplace also offer an independent research method for

correlating the employee performance with the appraisals.

4. The 360 Approach: The “360 Approach” appraisal system is not just for employers, but is

used by and for all employees and managers of a firm. Most appraisal methods are designed

using variables that employers find significant, such as total revenue generated. The 360

approach uses standards that other employees might find important.

Fig. 4: 360 degree performance appraisal

RESEARCH CONDUCTED IN THE IMPLEMENTATION OF THE EPMDS IN

OTHER PROVINCES

The Research that was conducted in the implementation of the Employee Performance

Management Development Systems Policy in other Provinces revealed the following:

1. Performance Agreements are signed after the period whereas they are supposed to be

signed by the 1st of April that is beginning of the new financial year.

2. Performance Agreements failed to differentiate between the key results areas.

3. Performance agreements were not used as a reference point in managing performance even

after being signed by the incumbent.

4. The link between lack of compliance with the PMDS and lack of training was also an issue

of concern.

5. Recommendation was done on the clusters and all relevant parties especially the Heads of

Departments should meet to address the issues of induction and orientation and the

importance of service delivery in government departments.

6. Another critical issue that was raised was that, Departments should be summoned to

explain why the annual reports are completed before signing performance assessments and

they should account for that.

Almas Sabir / International Journal of Management Research & Review

4. CONCLUSION

Organizations need some means of ensuring performance standards are being achieved and

objectives are being met. They also need to plan for the future by setting organizational

objectives. These should be achieved through personal objectives agreed at the appraisal.

This is vital for all employees in order to maintain a competitive position, and it is important

that the method for doing this is successful.

This training resource is intended for use by trainers to emphasis the essential management

elements of a successful performance review appraisal scheme. Although the specific types

of performance appraisals conducted and forms used vary among organizations, these one-

on-one meetings help employees understand exactly how they’re doing and set goals for

development or improvement. As you conclude the meeting, confirm that the employee

understands what is expected of him. Ask if he has any questions regarding the action plan or

any other part of the review, and provide answers that continue to focus on the positive. Then

have him sign the action plan and any other appraisal-related forms. Express that you are

committed to helping him succeeds, and encourage him to ask for guidance whenever

needed.

The entire review has been stressed the importance of viewing performance appraisal and

merit pay as embedded in broader pay, personnel, management, and organizational contexts.

For example, while by no means the only relevant Bottom of Form contextual factor, the

issue of comparability of base salaries with pay for equivalent private-sector jobs may pose

severe problems for the acceptance of merit pay or any other pay for performance system if

the promise of recently enacted legislation proves illusory. We realize that the broader

changes suggested by an analysis of context can be costly, but we suggest that making

programmatic changes to the Performance Management and Recognition System in isolation

is unlikely to enhance employee acceptance of the system or improve individual and

organizational effectiveness significantly and, in the long run, may prove no less costly.

REFERENCES

[1] Introduction to performance appraisal, http://www.managementparadise.com

[2] Performance appraisal, http://www.managementstudyguide.com

[3] A brief introduction to performance management, june 2008 issue. by julia huprich

[4] Research methodology used to evaluate employee performance appraisal

systems,http://smallbusiness.chron.com/

[5] 5 methods for employee performance appraisals,cbpowerandindustrial.wordpress.com

[6] Performance appraisal literature review, tuesday, march 1, 2011,

http://topacademicpapers.blogspot.com/

[7] Featured in the skills of appraisal and performance review training manual,by val rowland

& ken birkett, http://www.fenman.co.uk/

[8] Suggestions on how to end a performance appraisal by dee covelli, demand media.

Almas Sabir / International Journal of Management Research & Review

[9] Evaluation of employee performance management development systems policy as

implemented amongst social service professionals within department of social development

[10] Literature Review of Research related to Performance Appraisal,

http://www.ukessays.com

[11] Six Steps of the Performance Appraisal Process,http://smallbusiness.chron.com/

[12] Reward schemes for employees and management, http://www.accaglobal.com/

[13] Performance Appraisal Process, http://www.whatishumanresource.com

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.