Importance of Performance Appraisal Essay


Performance appraisal involves systematic review of staff performance on a written basis, at regular time intervals; and holding of appraisal interviews at which employees have the opportunity to discuss performance issues past, present, and future, on a one-on-one basis, usually with their immediate line manager. Performance appraisal applies a systematic approach to supplement organizations on going processes of assessing their staff.Performance appraisal covers a whole spectrum of employees in organizations. Past practices of had confined performance appraisal to managers and supervisors. However, there is current evidence that most organizations are expanding performance appraisal schemes to include not only secretarial and clerical staff, but also manual employees. Organizations in both private and public sector also extent performance appraisal schemes to cover higher echelons of organizations, to include directors (Deb, 2006, p. 200).Performance appraisal schemes in organizations fulfill multiple objectives. This is important in that several objectives can be attained. It is important for everyone in the organization, particularly organization’s decision makers, to be fully aware of precise objectives of performance appraisal system expects to fulfill and specific priorities within these objectives (Towers, 1996, p. 199).Performance appraisal in organizations assists in identification of training and development requirements of workers. Without appraisal schemes in organizations, would not be accurately identified in organizations.In addition, appraisal of employee’s performance provides them with feedback on job performance, thus creating a basis for improvement and development. Performance appraisal in organizations is directly associated with motivation of employees. This is because it offers some of the vital components of effective strategies of motivation (Chandramohan, 2006, p. 138).

Methods of Performance Appraisal in Organizations

Organizations utilize a wide variety of techniques and criteria for appraising their staff performance. Organizations in both private sectors ensure that they adopt appropriate and effective appraisal methods for evaluating their staff. For instance, majority of organizations review performance against objectives that those organizations have preset. This stemmed from the Management by objectives philosophy.Organizations ensure that these objectives are specific and measurable, and challenging to employees, though achievable. This has encouraged organizations to set effective objectives which have ensured substantial employees’ participation in the process of setting organizational goals. Shared goal setting in organizations has led to enhanced feeling of commitment by employees to meet goals that have jointly been agreed upon (Schuter, 2007, p. 279).Since organizations have extended performance appraisal to all levels of organizations, a number of performance variants have been developed. For example, methods of setting objectives, definition of achievable results, are often considered in organizations to be appropriate for managerial than for subordinate employees. At subordinate organizational levels, performance appraisal mechanisms focus on behavior assessment as appropriate .Appraisal of employee competencies or job behaviors diligently derives employee characteristics from detailed job analysis. This has assisted organizations to determine important appraisal dimensions that are most effective. Organizations, for instance, are using competencies or behaviors, such as counseling, analytical skills, communication skills, willingness and others to introduce acceptable change (Edwards, 2003, p. 173).Towers (1996) describe a popular behavioral approach in the US, referred to as BARS (behaviorally anchored rating scales) (p. 201). This performance appraisal method provides a set of behavioral descriptions at every level in the rating scale.When organizational scales measure the quality of performance, they use a set of statements to describe the behavior associated with the worst quality, at one end, and the best quality at the other, with intermediate statements in between. The adoption of wide coverage of performance appraisal schemes has enabled organizations to develop two or more variants of their appraisal systems. This has effectively addressed differing needs of various categories of staff in organizations (Wilton, 2010, p. 9)..

Performance Appraisal Schemes Process is an Open Process

Majority of organizations in both private and public sector have moved towards enhanced openness in the appraisal process. This is done through free exposure of appraisal report and its contents to employees being apprised.The trend by organizations towards openness has been encouraged by a number of factors, such as: increased application performance appraisal methods that are result oriented that stem from the philosophy of management-by-objectives changing social climate, stressing participation and involvement and feedback as a basis for development; and the increasing influence white collar unions, encouraging nee for mutual trust (towers, 1996, p. 199).Organizations at all levels cannot operate a performance appraisal scheme that is result oriented without openness. This is because the approach needs superiors and subordinates to identify and set goals that are seen by both as realistic for subordinates. The agreed goals where possible translate into measurable objectives. This has become the basis for subsequent evaluation of subordinate’s performance in majority of organizations (Towers, 1999, p. 120).According to Towers (1996), aspects of performance appraisal practice have occurred between 1977 and 1986 in most organizations (p. 210). He cites a survey which highlights that only 8% of organizations used closed appraisal systems in 1986. In this system, the individual was not allowed access to completed performance appraisal report, compared with 26% in 1977 (Towers, 1996, p. 199).The evidence here shows that a rising number of organizations understand the need of open communication in performance appraisal process. Most organizations recognize the importance of openness to apply to those aspects concerned with current performance. Those parts that are undisclosed relate to evaluation of an employees future performance (Towers, 1996, p. 201).Performance appraisal has been given a legal dimension which varies from country to country. Data Protection act in the UK, for instance, provides individual employees the legal right to access personal data. This includes information about them contained in appraisal documents, if it is stored in the computer. The Act also defines personnel data and covers both factual and evaluative information. This implies that employees could access opinions about them expressed in appraisal documents (Chandramohan, 2006, p. 139).

Importance of Performance appraisal Interview

Most organizations view appraisal interviews as a key feature of determining the success or failure performance appraisal schemes. Appraisal schemes in organizations include provision for holding performance appraisal interviews which offer an opportunity for managers to inform employees about their performance. In addition, managers will also be able to develop plans for the future. Appraisal interview in organizations serve numerous objectives.They relate to overall objectives which organizations expect their performance appraisal schemes to achieve. They are likely to include let employees understand where they stand provide a chance for discussion about employees job performance over a period under review and recommending action to enhance performance of employee performance, including the setting of objectives (Chanramohan, 2006, p. 141).Effective performance interviews have enabled organizations to: enhance employee participation, thus, increasing greater feelings of satisfaction on the part of employees towards the interview and the interviewer; support interview by showing appreciation of employees point of view, and organizations adopting a constructive perspective to problems. This has increased a chance that employee’s behavior and performance will change in a positive way; identifies and solves problems affecting employees job performance.This increases the likelihood that the employee’s behavior and performance in the organization will change in a positive way, compared with circumstances where appraisers impose solutions; emphasizes performance rather than personality as a result enhancing satisfaction with the interview; involvement in goal-setting provides a powerful effect on employees’ subsequent performance than a general discussion about goals; and others (Towers, 1996, p. 204).Performance appraisal is a vital part of the management process. Therefore, it makes it necessary for managers and employees in organizations to feel ownership of performance appraisal schemes and recognize their involvement is central to its success. Successful performance appraisal, design and implementation is encouraged by the element of consultation.Consultation at the design stage with groups such as; directors, managers, supervisors, employees, trade unions, and others, assists to reduce or eliminate anxieties. This helps generate interest and commitment besides stimulating innovative ideas about appraisal techniques and procedures of implementation. Thus it ensures that the appraisal schemes adopted by organizations are effectively tailored to the requirements of the organization (Chandramohan, 2006, p. 139).Commitment on the part of top management is necessary as the benefits of performance appraisal relate to medium and long term. This support and interest encourages managers at other levels to put emphasis to the implementation of performance appraisal. This is made easier if they are clearly made aware on how objectively and effectively appraisal of their staff will impact on their own appraisals (Deb, 2006, p. 203).

Performance Appraisal and Pay Decisions in Organizations

Performance appraisal is directly linked to pay decisions in organizations. Organizations used different approaches to performance appraisal in the past. To date, most organizations have shifted towards generally held views on how performance appraisal and pay decisions are associated.This happens despite presence of substantial variations in organizational practices. Organizations in the US, for instance, consistently articulate merit of associating performance appraisal to pay. These organizations use performance appraisal for pay decisions. They ensure that employees who emerge from performance appraisal system as higher achievers get greater rewards than those considered as under performers (Towers, 1996, p. 199).Organizational practices in most countries appear to follow the US pattern of linking performance appraisal with pay decisions. In sum, there are several advantages of linking performance appraisal to pay decisions: performance appraisal is taken seriously by all parties, appraisers, appraisees and reviewers; many people feel that there must be a close relation between performance appraisal and pay, for reasons of fairness; and there is likelihood of organizations developing cultures that are performance oriented (Edwards, 2003, p. 173).Performance appraisal schemes enhance management accountability in organizations. Great majority of organizations in the UK overwhelmingly entrust the task of conducting appraisals to people in direct line management responsibility for employees being appraised. US organizations too emphasize performance appraisal as an integral part of managerial role to be undertaken by individuals with immediate management responsibility (Edwards, 2003, p. 172).Traditionally, the role of employee’s had been to offer whatever it takes to meet the expectations of the manager. The manager in this case was regarded as a customer. The manager is today considered as the provider of direction, resources and coaching advice to customers regarded as internal customers.Upward performance appraisal was, for instance, introduced in BP Exploration in 1990. This was a new example to be tried in the UK, introduced in reaction to flattening of organizational structure and need to introduce more open, participative style of management (Schuter, 2007, p. 279).This upward performance appraisal in organizations addressed effectiveness of managers in managing people. Subsequently, enables staff to meet with managers to discuss the aggregate results in order to develop ways to defeat challenges which have been identified. This approach implementation can be perceived as main symbol of transformation.In the US, upward performance appraisal is a practice that is widely practiced. They have been adopted to improve upward communication s, develop skills of supervisors and managers, and assist its competitiveness in market place effectively (Wilton, 2010, p. 10).


Performance appraisal is the most important tool for an organization. The information it provides is highly necessary in making decisions regarding various personal aspects such as promotion and merit increases. Performance appraisal also associates information gathering and decision making process which offers the basis for determining for HR functions such as recruitment, selection, training and development, and compensation (Chandramonhan, 2006, p. 138).Objective and accurate information is necessary in any organization. They assist in isolating weak areas in the initial systems. Performance appraisal is the most significant tool for organizations, since information it provides is highly useful in making decisions regarding personnel aspects. Overall, performance appraisal can be placed in the whole spectrum of human resource management function (Deb, 2006, p. 212).

Reference List

Deb, Tapaney., 2006. Strategic Approach to Human Resource Management. New York: Routledge.

Edwards, J. , scott, J., & Raju, N., 2003. The Human Resource Program Evaluation Handbook. New York: Routledge.

Chandramohan, A., 2006. Human Resource Management. New York: APH Publishing.

Schuter, R., Jackson, S., 2007. Strategic Human Resource Management. New York: Wiley & Sons.

Towers, B., 1996. The Handbook of Human Resource. New York: Wiley & Sons.

Wilton, Nick., 2006. Human Resource Management. New York: Routledge.

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