Performance appraisal systems are perhaps the most important tool in ensuring organizational performance. Their benefits to organizations are numerous touching every facet of the organization. Although they are sometimes misused, performance appraisal remains among the most valuable management tools in determining if the organization is achieving its objectives in the short run.
It is estimated that in nearly 90% of organizations in the world, performance appraisals are done (Imran, 2008, p. 1). This essay explores the importance of performance appraisals to organizations and looks into the constituent elements of good performance appraisal systems.
As stated above, performance appraisals are very important in controlling organizational functions and ensuring that employees give their best to the organization. It gives a means of assessing employee performance with time. This is geared towards making employees improve on their work based on the evaluation results.
The management of the organization can also determine whether there is a need for training their employees depending on the results of the appraisal. It also helps the organization to establish whether the desired performance has been achieved. This helps the organization to minimize the difference between the desired and actual performance. Performance appraisal systems also help managers to exercise control over the functions of the organization.
This is done by ensuring that operations are carried out in conformance with the laid down policies of the organization. Human Resource managers in organizations can also use appraisal results to make critical decisions like promoting performing employees and transferring non-performing employees.
Similarly, managers are also appraised. For instance, organizational functions like recruitment and training can be reviewed to check the effectiveness of Human Resource Managers. Appraisals can also be used to gauge employee satisfaction in order to ensure co-operation (Albright, 2009, p. 1).
A good appraisal system must contain two basic elements. These are evaluation and feedback functions. The evaluation function is instrumental in determining the aforementioned gap between expected and actual performance. It is in this function that the organization develops proper checks and balances for ensuring that the organizational objectives are met. The main challenge in this function is the determination of actual performance.
This is a loophole used by many corrupt employees to jeopardize appraisal efforts since the determination of the actual performance may be variable depending on the methods that are used. For the appraisal system to achieve its intended objectives, the employees and managers need to know their standing with respect to the appraisal.
In order to ensure that no loopholes are left in the appraisal system and also ensure that employees and managers are informed about appraisal results, there is a need to incorporate a feedback function in the appraisal system (Imran, 2008, p. 1). This is aimed at ensuring that managers and employees perfect their services to the organizations and also that the appraisal team carries out its functions well.
Each of the stated functional parts of an appraisal system can be carried out using a variety of criteria. The evaluation function can be carried out using criteria known as the “critical incident file.” (Imran, 2008, p. 1)This is where a manager records the significant behavior portrayed by an employee in the course of employment. These could either be achievements or failures. The appraisal team then compares different employee files to determine the employees who have been performing and those who have not been performing.
The manager can also use scales based on dependability, quality, and quantity of work, attitude, initiative, and cooperation. This helps to develop balanced appraisal results and it is recommended for big organizations where comparison of performance levels of employees could be challenging. The evaluation can also be done using the BARS approach. These are rating scales used to describe the performance of employees.
The rating is done by managers and evaluated by the appraisal team to gauge the quality of the work done by a specific employee. Other methods used include ranking in which employees are compared and the narrative methods whereby the manager describes his employees in writing. The feedback function is multi-dimensional. The directors of the company or the owners of the organization should be given feedback concerning the performance of managers.
The managers should also be given feedback in order to ensure that they improve any weaknesses in their work. In addition to their feedback, the managers should be given feedback outlining the performance of employees. This enables them to make the aforementioned management decisions like transfers and promotions (Albright, 2009, p. 1). The employees also need to know how the appraisal team has rated their work in order for them to work towards improving their work.
As mentioned above, performance appraisals are very important in management. As individuals within the organization are reviewed, conformance with set objectives and targets is assured. The appraisals also motivate employees and lead to personal development. It also helps to build strong relationships between employees and managers and thus it ensures better co-operation between the two entities.
These strengths of performance appraisal enable the organization to plan for development since it will be able to know if the plans it lays down are met.
Albright, R. (2009). What Is The Purpose Of The Performance Appraisal. Web.
Imran, A. (2008). Purpose of Performance Appraisal- how and Why it is Important and Effective for Any Organization. Web.