Performance appraisal is a process with the help of which the performance of an employee is evaluated. It is also referred to performance evaluation.
- There can be several parties involved in the performance appraisal i.e. top management, immediate supervisor, peers, customers etc.
- Top management has access to documented record of their employee’s progress and uses it to evaluate them.
- Immediate supervisor has a direct access to the person who is to be appraised so this would be an accurate appraisal in many cases.
- Peers know each other’s performance and can evaluate each other as they work together.
- There are several performance appraisal methods e.g. ranking method, paired method, grading, and management by objectives, behavioral anchored rating scale, 360-degree appraisal and cost accounting method.
- Ranking method is when employees are ranked one against the other in an organization.
- Behaviorally anchored rating scales or BARS are used to make a comparison of a person’s performance against specific behavioral variables identified in terms of numerical ratings. BARS are beneficial in the employee appraisal.
- 360-degree appraisal uses the input from top management, immediate supervisor, peer, subordinates, self, and customers.
- Performance appraisal is an ongoing process that is used to collect and document the information related to an employee performance.
- It can be set to take place once or twice a year or other defined periods.
- It can also be done on daily basis mostly in smaller organizations.
- Performance appraisal can also be set to take place when rewards are going to be issued to employees based on performance.