A performance appraisal is a systematic, general and periodic process that assesses an individual employee's job performance and productivity in relation to certain pre-established criteria and organizational objectives. Other aspects of individual employees are considered as well, such as
organizational citizenship behavior, accomplishments, potential for future improvement, strengths and weaknesses. There are three main methods of data collection: objective production, personnel, and judgmental evaluation. Judgmental evaluations are the most commonly used with a large variety of evaluation methods. Historically, appraisals have been conducted annually (long-cycle appraisals); however, many companies are moving towards shorter cycles, and some have been moving into short-cycle (weekly, bi-weekly) appraisals. The use of multi-source feedback – incorporating evaluations from peers, subordinates, and customers – over traditional supervisory ratings may assist to improve rating accuracy by reducing
leniency bias and
centrality bias. Transparent appraisal systems reduce the risk of surprise negative evaluations, a concern especially pertinent for
socially excluded groups that may already face
systemic bias in the workplace. Cognitive biases such as the
anchoring effect and
halo effect can impact the accuracy of appraisals used to identify training and professional development needs by relying too heavily on initial information when making judgments or a rater's overall positive impression of an individual, both of which can influence the assessment of performance, leading to biased judgments that influence evaluations. Researchers have found that the
organizational citizenship behavioral dimensions of altruism and civic virtue can have just as much of an impact on manager's subjective evaluations of employees' performances as employees' objective productivity levels. Performance appraisal systems serve the purpose of documenting appraisal processes and results. Proper documentation ensures performance is recorded transparently, safeguarding all parties in case of disputes around wrongful termination or discrimination.
Characteristics Performance appraisals can provide room for discussion in the collaboration of individual and organizational goals.
Process The performance management process begins with leadership within the organization creating a performance management policy. Activities to support the appraisal process include suitable models of assessment, appropriately credentialed staff, employee engagement training, and improvement actions.
Data collection • The objective production method consists of direct measures such as sales figures, production numbers, and the electronic performance monitoring of data entry workers. Although these measures deal with unambiguous criteria, they are usually incomplete and of reduced
validity because the variability in performance can be due to factors outside of the employee's control, and because the quantity of production does not necessarily indicate the quality of the products. • The personnel method is the recording of withdrawal behaviors (i.e. absenteeism, accidents). Most organizations consider unexcused absences to be indicators of poor job performance, with
all other factors being equal, although this might not actually be the case in practice. • Judgmental evaluation is the appraisal of performance by judgments of other employees, supervisors, or customers, commonly by way of rating. These tools typically take the form of a multi-format questionnaire that might include VAS, Likert scoring and the collection of both quantitative and qualitative data by a number of means. The most common types of error in collecting such data are
cognitive biases and
statistical errors such as
leniency errors,
central tendency errors, and errors resulting from the
halo effect.
Rating methods For judgmental evaluations, raters are often trained to improve the validity of the data and reduce errors. Although meaningful in theory, • A mixed-standard scale (MSS) is a behavior-based rating process used during
employee appraisals. The scale was originally developed in Finland.
Stakeholders So-called 360-degree feedback methods survey the customers, supervisors, and peers of employees being appraised so as to provide a more comprehensive evaluation of the employee and to potentially increase team performance and culture. Threats to both the quality and perception of feedback in peer assessment include peers being biased by pre-existing relationships and employees putting in less trust in the appraisal of a peer than a supervisor. Additionally in an organization where peer assessment is undertaken, employees may have concern for how the analysis of other is perceived, and how this may impact their own assessment in turn. Ratings may be influenced and inflated by many non-performance factors such as employee 'likeability', personal prejudices, ease of management, and previous mistakes or successes. Supervisors will sometimes rate employees more favorably than that of their true performance in order to please the employees and avoid conflict. Performance appraisals may also involve self assessment. Threats to successful implementation of self-assessment are scarcity of time, overemphasis on scoring tools, failure to follow-up improvement actions and lack of communication. The risk of flawed self-assessment is that self-perceptions of behaviours, knowledge and skill can fail to align with the reality of an individual's performance. This can either absorb excessive management time in addressing flawed self-perceptions of performance or, if the behaviour is not addressed, can detract from the achievement of organisational goals. Therefore, evolved reflective skills are essential to successful self-assessment. According to a meta-analysis of 27 field studies, general employee participation in their own appraisal process was positively correlated with employee reactions to the performance appraisals ystem.
Frequency Some propose that the purpose of performance appraisals and the frequency of their feedback are contingent upon the nature of the job and characteristics of the employee. For example, employees of routine jobs where performance maintenance is the goal would benefit sufficiently from annual performance appraisalfeedback. On the other hand, employees of more discretionary and non-routine jobs, where goal-setting is appropriate and there is room for development, would benefit from more frequent performance appraisal feedback. Informal performance appraisals may be done more often, to prevent the element of surprise from the formal appraisal. To improve the effectiveness and value of the performance appraisal process, many organizations have adopted a continuous performance management practice. This takes the form of regular – weekly or monthly – manager-employee check-ins and informal performance discussions.
Interview The performance appraisal interview is typically the final step of the appraisal process. The interview is held between the subordinate and supervisor. The performance appraisal interview can be considered of great significance to an organization's performance appraisal system. through electronic monitoring of performance, which affords the ability to record a huge amount of data on multiple dimensions of work performance, and the recording and aggregating performance ratings and written observations and making the information available on-line. However, political and institutional factors, such as, political ideologies, norms, and organizational culture can influence the effective implementation of performance appraisal outcomes. == Efficacy ==