Article 2- Importance and benefits of performance appraisal
Importance and benefits of performance Appraisal
Performance appraisal (PA) is a structured evaluation which is very important for both employer and employee. Further it plays a pivotal role in driving organizational success and fostering employee development.
The below chart illustrates the importance of performance appraisal for employer and employee.
Importance of PA To Employer / Organization
1.. Improved Performance:
2. Better decision making
Employers can use the performance data to make important work-related decisions such as
l Promotions, compensation, training, and development.
l Work force planning
l To select skilled employees for leadership roles and address performance gaps through targeted training.
3. Enhanced employee engagement and reduced turn over
Employer can build a great relationship with the employee through PA by regular feedback and recognition. This will help to keep employee morale and engagement. When employees feel valued and supported, their job satisfaction will go up and they will remain with the company. When employees can see a clear and transparent path for growth within the company, they are more likely to stay and turnover rate will be decreased.
4. Aligned goals
Appraisals help align individual employee goals with organizational objectives. This will help to the overall success of the company since every employee is working towards the common goal of the company.
5. Identify training needs
Appraisals help identify skill gaps and training needs. Employers can use the appraisal information to develop targeted training programs to develop employee capabilities and overall performance since they can identify employees’ skill gaps and training needs through PA. This can lead to a more skilled and adaptable workforce
Importance of PA to Employee
1. Feedback and guidance
PA helps employees to receive regular feedback of the work and performance with necessary guidance from the employer. This will help employee to to identify their weaknesses and strengths.
2. Goal setting and development
PA allows a clear picture of set goals of the employee for next review period of time. This process helps employees to identify the employer expectations of them and provides a clear framework for their work.
3. Career advancement
PA is an important tool for the employees to understand opportunities for training and development, allowing employees to acquire new skills and advance their careers. So it helps to set career goals and create a plan for achieving them.
4. Recognition and Motivation:
Recognizing and acknowledging employee achievements boosts morale and job satisfaction. Constructive feedback and goal-setting can motivate employees to improve their performance. This will lead to increase employee engagement.
5. Improved Communication
Performance appraisals act as communication tools between employee and employees.Then the employees can clearly identify the job expectations, objectives, and performance standards. Accordingly the employees can well understand how their work contributes to the organization's goals.
Benefits of Performance Appraisal
Benefits derived to the organization from performance appraisal practices.
l Increase in efficiency:
Improvement in the methods of performance review and appraisal helps the company to be more effective and helps to achieve the organizational goals faster.
l Helps to understand an employees’ concern:
Continuous performance reviews helps to have a frequent discussion with the employee and his manager. Then, needful can be done there by adhering to the requirements of the employee which leads to employee satisfaction.
l Helps to promote team work :
Team can work in a better manner without much of difference of opinions and trust issues. (6-reasons-fortune500-companies-replacing-traditional-performance-review, 2017)
l Helps maintain a transparent system:
This will make the performance managers take their work more seriously and will increase their accountability and responsibility.
Benefits derived to the employees from performance appraisal practices.
l Increase in Salary:
The performance appraisal process offers merit to the performance of employees and also an increase in salary.
l Enhancement in employee’s progress:
It helps to pore over effectiveness and flaws of employees so that new everyday jobs can be well planned and assigned to capable employees.
l A tool of Motivation:
It serves as an inspiration tool.
l Spot Strength and Weakness:
The HR manager of the organization can spot the strength and weakness of the employees thus helping the employees work on their weakness and make it their strength.
·l Providing Feedback to employees:
The main aim of HR person is that he or she should give regular feedback to the employees about how they can perform better and what are the major targets and how to achieve them.
Modern corporate organizations are increasingly taking the issue of performance appraisal seriously in view of its merit as a tool for increasing productivity in an organization. Performance appraisal enhances workers’ productivity in an organization. When an objective appraisal is carried out, the organization will be in a position to reward the performing employees. The exercise will also create an opportunity for determining deficiencies in the performance of the workforce. Consequently, appropriate training and development programs would be designed to correct such deficiencies. Performance appraisal also helps an organization to place employees in tasks they are best suited for in order to improve productivity. When productivity is improved it leads to increased earnings in the organization. Managers in charge of appraising the performance of the subordinates should resist the temptation to be biased or subjective in the assessment of employees’ performance no matter the odds in the relationship between that boss and the subordinates being appraised. Sound judgment and objectivity should be the watch- words of appraising managers in corporate organizations. (Obi, J, 2016)
References
Dangol, P. (2021). Role of performance appraisal system and its impact on employees motivation. Quantitative Economics and Management Studies, 2(1), 13-26.
Chahar, B. (2020). Performance appraisal systems and their impact on employee performance: The moderating role of employee motivation. Information Resources Management Journal (IRMJ), 33(4), 17-32.
Bayo-Moriones, A., Galdon-Sanchez, J. E., & Martinez-de-Morentin, S. (2020). Performance appraisal: dimensions and determinants. The International Journal of Human Resource Management, 31(15), 1984-2015.
A well designed and healthy performance appraisal process would contribute towards improved performance and help individuals align with organizational goals . Further ,it provides constructive feedback and valuable insights for career advancement . However, my understanding is that in practical scenario performance appraisals are not carried out in the proper mechanism in most instances due to lack of interest in both parties (Employer and Employee)
ReplyDeleteThanks for commenting.
ReplyDeleteIt's true that in many practical scenarios, performance appraisals often fall short of their intended purpose. There are many reasons for this, and "lack of interest in both parties (employer and employee)" is a significant one.
Reasons for Lack of Interest:
* Perceived Lack of Value:
* Fear and Anxiety:
* Time Constraints:
* Lack of Training and Skill:
* Poor Communication:
* Bias:
Consequences of Poor Appraisals:
* Employee demotivating.
* Increased employee turnover.
* Reduced productivity and performance.
* Damage to the employer-employee relationship.
* Legal ramifications if the process is not fair.
So, it is proved that a lack of interest from both employers and employees significantly contributes to the ineffective implementation of performance appraisals in many workplaces.
I agree that appraisals help with feedback and growth, but sometimes they can also be stressful for employees if not done properly. Maybe discussing how to make the process fair and effective would add more value.
ReplyDeleteYou've raised a crucial point. The reality is that PA can indeed be a source of significant stress for employees if not implemented thoughtfully and effectively. Focusing on how to ensure fairness and effectiveness is absolutely essential for maximizing the positive impact and mitigating potential negative consequences.
DeleteFollowing are the key points Discussing how to make the process fair and effective would indeed add significant value.
1.Clear and Transparent Criteria (Denisi & Murphy, 2017)
2.Objective Measures and Multiple Perspectives
3.Trained and Skilled Evaluators
4.Focus on Development over Judgment
5.Regular and Ongoing Feedback
6.Opportunity for Employee Input and Self-Reflection
7.Fair and Consistent Processes
8.Clear Grievance Mechanisms