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Objectives of Performance Appraisal

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Everything you need to know about objectives of performance appraisal. Performance appraisal is a systematic evaluation of the individual with respect to his performance on the job and his potential for development.

It relates to the assessing the individuals performance and his abilities at work. In fact people differ in their abilities and aptitudes, so there are differences in the quality and quantity of work done by different employees on the same job.

According to Cummings, “The overall objective of performance appraisal is to improve the efficiency of enterprise by attempting to mobilise the best possible efforts from individuals employed in it. Such appraisals are objectives including the performance reviews, the development and training of individuals planning, job rotation and assistance promotions.”

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The objectives of performance appraisal are given here:-

1. To Provide Feedback 2. To Motivate Superior Performance 3. To Encourage Performance Improvement 4. Setting and Measuring Goals 5. Promotion Decisions 6. Counselling Poor Performers

7. To Determine Compensation Changes 8. To Support Manpower Planning 9. To Determine Individual Training and Development Needs 10. To Determine Organisational Training and Development Needs 11. To Determine Improving Overall Organisational Performance 12. To Encourage Coaching and Mentoring.

Additionally, learn about the four important categories for objectives of performance appraisal. They are:-

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1. Organisational Objectives 2. Work-Related Objectives 3. Communication Objectives and 4. Career Development Objectives.


Objectives of Performance Appraisal: Career Development, Training & Development, Merit Rating, Feedback and a Few Others

Objectives of Performance Appraisal – Appraisal of Employees Several Objectives Like: Compensation Decisions, Promotion Decisions, Feedback and a Few Others

Performance Appraisal are used for multiple purposes. Bernardin and Beatty (1984), highlighted several objectives of PA, like to improve the use of resources and serve as a basis for personnel actions. Cleveland, Mohammed, Skattebo and Sin (2003), described four purposes of performance appraisal – to make distinctions among people, distinguish a person’s strengths from his or her weaknesses, implement and evaluate human resource systems in organizations, and document personnel decisions.

Cleveland, et al. (2003) also described that appraisals are used to make between-person decisions, for instance for promotions or termination decisions or salary administration. PAs fairness is a hot issue. Researchers and practitioners are trying to devise means in order to increase employees’ productivity and reduce turnover, without adding a significant increase in costs.

Performance appraisal’s fairness has been cited as a way of achieving these goals. One of the pre-eminent purposes of appraisals is to positively affect future performance. As per Latham, et al. (1993), the basic purpose of conducting PAs is to improve the performance of the affected employees.

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“Performance appraisal is the process of systematically evaluating performance and providing feedback upon which performance adjustments can be made”. – Schermerhorn, Hunt and Osborn, 2004.

“Performance appraisal is a comparison of actual performance with the expected performance to assess an employee’s contributions to the organization”. – Nelson, 2004.

“Performance appraisal may be defined as evaluating individual job performance as a basis for making objective personnel decisions”. – Robert Kreitner, 2004.

According to some studies PA helps in improving performance and building both job satisfaction and organizational commitment. Alternately, this helps in lowering down the turnover levels.

From the above discussion it is clear that appraisal of employees serves several objectives such as:

1. Compensation Decisions:

On the basis of performance appraisal, managers identify employees performing at or above or below the expected levels. Employees are being compensated accordingly on the basis of merit.

2. Promotion Decisions:

Performance appraisal plays a vital role in judging the employees to be promoted to higher positions. Because performance appraisal considers merit as the basis of reward, the employees having adequate talent are considered for getting promotion.

3. Training and Development Programmes:

Performance appraisal serves as one of the important criteria for assessing the training needs of the employees. It determines which employee needs more training and evaluates the post- training effects. Through performance appraisal employees can know their progress and various skills they need to develop in order to get promotion and pay hike.

4. Feedback:

Performance appraisal helps the employees in knowing how well he/she is doing on the job. It can serve as a basis for an ongoing discussion between superior and subordinate about the job-related matters. Both the appraiser and appraise get to know each other with the help of effective interaction and feedback process.

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The appraiser gets a clear picture of what he/ she must do to enhance his/her performance and to move ahead in the career ladder of the organization.

5. Turnover Decisions:

Performance appraisal serves as a basis for job satisfaction of employees. If employees are not satisfied with PAs they will not seethe added value. Some other studies suggested that appraisal satisfaction is a key factor leading to job satisfaction. Being satisfied both quantitatively and qualitatively employees stay in the organization for a longer period of time, thereby reducing the turnover rate.

Several studies emphasized fairness of procedures used for PA. Some research findings indicate that dissatisfaction with performance appraisal influence employees’ intention to quit through reduced job satisfaction. Hence the evaluation system to be effective should be perceived as being fair.


Objectives of Performance Appraisal – Objectives of an Effective Performance Appraisal System

An effective performance appraisal system have the following objectives:

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(i) Helping the employees to overcome their weaknesses and improve upon their strengths.

(ii) Generating adequate feedback from the supervisors and improving upon in the required direction.

(iii) Contributing to the growth and development of employees through realizing required goals;

(iv) Helping the organization in identifying training and development needs in employees and moti­vating them; and

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(v) Generating relevant and required information about the employees.

The assumptions behind an appraisal system are that the employees can continuously grow and develop behaviourally, professionally, and technically. Organizations can provide opportunities and create condi­tions for development.

Currently, the top management perceives performance appraisal as an impor­tant HR activity which, in turn, reflects its commitment to it. The success or failure of a performance appraisal system depends on the philosophy underlying it, its connection with business goals, and the attitude and skills of those responsible for its administration, and that of top management.

The perfor­mance appraisal is a joint responsibility of the HR department and the line managers. The HR depart­ment is involved in designing the appraisal system, monitoring the appraisal process, review interviews, documentation, developing procedures for compensation decisions, and conducting periodic surveys on the quality of appraisal systems.

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The line manager is found to play a significant role in identifying key performance areas (KPAs), helping subordinates in identifying their skills and weaknesses through regular feedback, and creating a HR climate of mutuality, trust, and openness in the organization.


Objectives of Performance Appraisal – 8 Main Objectives

In simple terms, performance appraisal may be understood as the assessment of an individual’s performance in a systematic way, the performance being measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgement, versatility, health and the alike. Assessment should not be condensed to past performance alone. Potentials of the employee for future performance must also be assessed.

A formal definition of performance appraisal is – “It is the systematic evaluations of the individual with respect to his her performance on the job and his or her potential for development”.

A more comprehensive definition is – “Performance appraisal is a formal, structured system of measuring and evaluating an employee’s job related behaviours and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organisation, and society all benefit.”

The second definition includes employees’ behaviour as part of the assessment. Behaviour can be active or passive —do something or do nothing. Either way, behaviour affects job results. The other terms used for performance appraisal are- performance rating, employee assessment, employee performance review, personnel appraisal, performance evaluation, employee evaluation and merit rating.

In a formal sense, employee assessment is an old as the concept of management, and in an informal sense, it is probably as old as mankind. Nor performance appraisal is done in isolation.

Data relating to performance assessment of employees are recorded, stored, and used for several purposes.

The main objective of performance appraisal:

1. To effect promotions based on competence and performance.

2. To confirm the services of probationary employees upon their completing the probationary period satisfactorily.

3. To assess the training and development needs of employees.

4. To decide upon a pay raise where (as in the unorganised sector) regular pay scales have not been fixed.

5. To let the employees know where they stand insofar as their performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development.

6. To improve communication. Performance appraisal provides a format for dialogue between the superior and the subordinate, and improves understanding of personal goals and concerns. This can also have the effect of increasing the trust between the rater and the rate.

7. Finally, performance appraisal can be used to determine whether HR programmers such as selection, training, and transfers have been effective or not.

8. Broadly, performance appraisal serves four objectives – (a) development uses, (b) administrative uses / decisions, (c) Organisational maintenance / objectives, and (d) documentation purposes.

Growing body of literature emphasises the compensation and reward aspects of performance management. These are critical issues for organisations to address. Reward issues fall outside the bounds of coverage for a textbook on human resource development and thus we will stress the coaching, feedback, and goal setting aspects of perfor­mance management.

What is required is an organisation- wide approach to performance improvement, with coaching and employee development as critical aspects of this effort. Among other things, this also means that an organisation’s recognition and reward system must function in a way that managers and supervisors are in fact rewarded for effective coaching.


Objectives of Performance Appraisal – Top 12 Objectives

1. Performance appraisal is a tool for communicating the skills, knowledge and attitudes required for the different job roles. The appraisal criteria acts as a guide to the attitudes and behaviours that the organization would like their staff in their various capacities to have.

2. To enhance an organization’s corporate value in the pursuit of innovative quality in the areas of Customers, Employees, Society, Products, Technology, Management and Fairness. These values are translated to performance measures that are used in the appraisal system. This enhances awareness of corporate values and promotes behaviours that are in line with the organization’s values.

3. To effect promotions based on competence and performance.

4. To confirm services of probationary employees upon their completing the probationary period satisfactorily.

5. To assess the training and development needs of employees.

6. To generate adequate feedback and guidance from the immediate superior to an employee working under him.

7. To decide upon a pay raise where regular pay scales have not been fixed.

8. To provide inputs to system of rewards (comprising salary increments, transfers, promotions, demotions or terminations) and salary administration.

9. To let the employees know where they stand in so far as their performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development.

10. To improve communication by providing a format for dialogue between the superior and the subordinate, and improves understanding of personal goals and concerns.

11. It can be used to determine whether HR programs such as selection, training and transfers have been effective or not.

12. To generate significant, relevant, free and valid information about the employees.


Objectives of the Performance Appraisal – 12 Specific Objectives for Appraising the Performance of an Employees

Performance appraisal is another significant HR activity which is used as the management’s most helpful tool in controlling the performance of employees, enhancing productivity, and facilitating progress towards strategic goals. The need for monitoring and measuring the performance of an employee arises to achieve the organizational objectives. Organizational effectiveness which is equated with managerial efficiency is ensured through fuller utilization of human resources.

According to Cummings, “The overall objective of performance appraisal is to improve the efficiency of enterprise by attempting to mobilise the best possible efforts from individuals employed in it. Such appraisals are objectives including the performance reviews, the development and training of individuals planning, job rotation and assistance promotions.”

When we consider the nature, it speaks about the inborn qualities of a thing. The process of evaluating merit of an employee is a systematic process carried out by his superior, starts at the time of recruitment and continues throughout the life of an employee in an organisation to evaluate his qualities.

Performance appraisal helps in analyzing the performance of the employees.

1. Controlling employees – Performance appraisal is an instrument of controlling the employees. The employees are rewarded if their performance exceeds standard and punished and cautioned if their performance do not meet standard.

2. Training and development programme – Performance appraisal is an instrument of analyzing the performance of the employees. If employee’s performance falls short of standard and if any weakness is noticed in any employee then that can be rectified through training programme. Performance of employees after providing training is also scanned to evaluate the success of training programme.

3. Promotion – Performance appraisal provides information regarding the strength, weaknesses and potentialities of employees’. It discloses the merits in individuals. This helps in promotion of employees on basis of merit.

4. Wage and salary administration – Performance appraisal system helps in decision making regarding wages and salaries. Often wages and salary are based on productivity of employees. The increment in salary is based on employee performance.

5. Identifying employee potential – Performance appraisal system aims at identifying the strengths and weaknesses of employees, and their potentials. The achievements of the employees at work are scanned.

The specific objectives of performance appraisal are:

1. To provide feedback to employees on their performance so that they can improve wherever there are inadequacies reported.

2. To provide a database for personnel decisions concerning placement, pay, promotion, transfer etc.

3. To facilitate communication between employees and managers and reduce grievances of employees.

4. To check the effectiveness of recruitment, selection, placement and induction programs.

5. To provide the opportunity for organizational diagnosis and development.

6. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.

7. To identify the strengths and weaknesses of employees to place right men on right job.

8. To maintain and assess the potential present in a person for further growth and development.

9. To provide a feedback to employees regarding their performance and related status.

10. To provide a feedback to employees regarding their performance and related status.

11. To serve as a basis for influencing working habits of the employees.

12. To review and retain the promotional and other training programmes.


Objectives of Performance Appraisal – Top 12 Objectives

Performance appraisal is a systematic evaluation of the individual with respect to his performance on the job and his potential for development. It relates to the assessing the individuals performance and his abilities at work. In fact people differ in their abilities and aptitudes, so there are differences in the quality and quantity of work done by different employees on the same job.

Therefore it is necessary for the management to know these differences so that the employees having better potentials may be rewarded by additional payments. Moreover employees will get an opportunity to improve themselves.

The following are objectives/purposes performance appraisal. Basically the objectives are classified into two categories, that is-

Objective # 1. To Ensure a Right Man is Placed on Right Job:

The data collected through merit rating facilitate that a right man is placed on a right job.

Objective # 2. To Make an Employee Permanent on the Job:

After the selection and placement of the employee on a job and after completion of the probation period, merit rating facilitates to judge the ability and competence of the employee on the job, so the management may be in position to take the decision of confirmation of the employee on the job.

Objective # 3. To Give Promotion to the Employees:

A well developed and administered performance appraisal system consists in determining whether individuals should be considered for promotions, where they can most effectively utilize their abilities and can judge his potentialities for higher jobs.

Objective # 4. To Inform the Employee about his Capabilities:

Merit rating technique gives the full information to the employee about his abilities, capabilities on the present job and as well as for the higher level jobs. It is necessary to inform the employee about his performance on the present job and the deficiencies and lapses on his part, if any, while performing on the job so that he may improve himself in that direction.

Objective # 5. To Weeds out Training Needs:

Due to implementation of merit rating technique it is possible to measure. The employees performance on the job. The employees whose performance is very poor or not satisfactory will indicate that such employees should be trained. It means merit rating technique assists in finding out which employees require the training for their performance improvement on the present jobs.

Objective # 6. To Ensure Maximum Utilization Human Resources:

Merit rating technique aims at improving the abilities, capabilities, competence of the employees and overcoming their deficiencies, lapses, weaknesses therefore management may be in position to organize human resource development programme and thereby able to utilize their human resources at the optimum level.

Objective # 7. To Assist in Supervision:

The employees performance is good, requires less amount of supervision but the employees whose performance is not satisfactory will require more close supervision and supervisor can concentrate on such employees, this can be done only through the merit rating technique.

Objective # 8. To Determine Wage and Salary of the Employee:

On the basis of the information provided by merit rating the management will be in position to determine the wage or salary to be given to their employees based on their performance on the job.

Objective # 9. To Establish Good Industrial Relations:

On the basis of information revealed by the merit rating helps in knowing the problems of employees and employer and efforts can be initiated by the management to improve the industrial relations. It ensures cordial healthy relations between the employer and employees. Moreover industrial peace and stability, work culture, environment, can be achieved.

Objective # 10. To Assist in Personnel Research:

Performance appraisal helps in the research specially in the field of human resource management and human relations. The research activities in the human resource area helps in resolving personnel problems, issues such as recruitment, selection, promotion, demotion, transfer, training and development, safety measures, employee grievances, absenteeism, layoff, labour turnover, wage and salary administration so on. Moreover to improve the productivity and efficiency of the employees the existing systems, procedures and practices should be amended and redesigned.

Objective # 11. To Facilitate Performance Record of the Employees:

The merit rating technique aims at maintaining the update records of performance of the employees. The service books of the employees are kept updated. These records assists in determining the promotion, rewards, discipline, performance, behaviour, attitude, honesty loyalty of the employees towards their job and the organization as a whole.

Objective # 12. To Assist in Correcting the Employees:

The data revealed from merit rating technique helps in guiding and correcting employees whose performance is not to the satisfaction of the management. This technique will stimulate the employees for their better performance.


Objectives of Performance Appraisal – Career Development, Training and Development, Feedback about Performance, Basis to Merit Rating and a Few Other Objectives

Performance appraisal is more concerned with HR practices aims to evaluate the skills and qualities of employees.

The objectives of performance appraisal are given here:

1. Career Development:

By means of formal and informal means the performance appraisal have the objectives to raise the opportunities for career development. On the basis of the results of appraisal, it might be introduced different systems and programmes for career development like personality development, orientation task and training programme etc.

2. Training and Development:

Performance appraisal aims to identify the strength and weaknesses of employees on their present job and its performance. This feedback can be used for devising training and development programmes appropriate for overcoming weakness of employees.

3. Feedback about Performance:

Performance appraisal provides feedback to employees about their performance that how they are working; how their efforts are contributing to the achievement of organisational objectives. The person or employees gets feedback about their performance and they may try to overcome their deficiencies which will lead to better performance.

When the persons gets feedback about their performance, they can relate their work to the organisational objectives. This provides them a feeling of satisfaction on that their work is meaningful.

4. Basis to Merit Rating:

Performance appraisal is more or less based on merit rating systems. The performance appraisal is also described as merit rating in which one individual is ranked as better or worse in comparison to others. It also aims to evaluate personal attributes to cover all the individual qualities and skill.

5. To Raise the Salary and Allowances:

It aims for making decisions about salary and allowances increases. All these depends on how the employees are performing their jobs. It also aims to develop formal and informal set up for developing the upward movement of salary and allowances.

6. To Fair and Justified Appraisal:

It aims to establish fair, optimum and justified system for evaluating the performance of employees. The reliable and justified appraisal is the essential part of human resource development.

7. Promotion:

Performance appraisal plays a significant role where promotion is based on merit. Most of the organisations often use a combination of merit and seniority for promotion. Performance appraisal discloses how an employee is working in his present job and what are his strong and weak points.

In the light of these, it can be decided whether he can be promoted to the next higher position and what additional training will be necessary for him. Similarly, performance appraisal can be used for transfer, demotion and discharge of an employee.

8. Motivation to Employees:

Performance appraisal puts a sort of motivation to employees for better performance. If the employees are conscious that they are being appraised in respect of certain factors and their future largely depends on such appraisal. Thus, appraisal can work as motivational device to make an optimum performance.

9. Develop Behavioural Approaches:

Performance appraisal also have a signifying objectives to raise the level of positive and acceptable behaviour among employees.

10. Increased Self Understanding:

Performance appraisal identify the inner feeling, self-esteem and self-understanding and insight the potentialities of employees, towards making a future career orientation.


Objectives of Performance Appraisal 

Performance appraisal is one of the most important functions of personnel manager. This performance appraisal is necessary in the organization as the personnel management deals with the human element in the organization. The necessity of their performance appraisal arises due to different behaviours. In organization we have different personality, situational, social, psychological and physiological traits.

It is actually an assessment of the employee which helps the management in working whether the selection of a particular employee was justified or not or whether he has been given just promotion or not and so on. It is the basis of promotion and transfers. Thus, it is a systematic evaluation of the individual with respect to his performance on the job and his potential for development.

The objectives of performance appraisal are:

1. To create and maintain a satisfactory level of performance by reviewing the current performance of the subordinate, rectifying the deficiencies and setting new standards of work.

2. To take decisions regarding salary fixation, promotion, transfer and demotion based on competence and performance.

3. To assess training and development needs.

4. To contribute to the employee growth and development through management development programmes.

5. To assist in career planning decision.

6. To facilitate fair and equitable compensation based on performance.

7. To assess the future potential of the employee.

8. To interact closely with her/his superior and learn the job-related and behaviour-related aspects.

9. To confirm the services of probationary employees upon completing their probation period satisfactorily.

10. To let the employees know where they stand insofar as their performance is concerned and assist them by giving guidance and constructive criticism.


Objectives of Performance Appraisal – 4 Basic Objectives: Setting Targets & Goals, Evaluating Employee Performance, Training & Development Needs and a Few Others

A performance appraisal system facilitates optimisation of employee performance and also helps in identifying areas for development. It is also useful for taking administrative decisions relating to payment of incentives, promotions etc. The performance appraisal system should provide for recognition of employee performance in the face of adverse external influences, if any. For example, the performance appraisal of a sales person should take into account the effects of a slump in the market or high inflation rate.

The following basic objectives of a performance appraisal system are explained below:

1. Setting targets and goals as – Performance standards and specific goals are set at the beginning of the appraisal period. These targets motivate the employees to perform better.

2. Evaluating employee performance – The evaluation of employee performance helps to understand the strengths and weaknesses of the employee. This evaluation also helps to determine the achievement of pre-set goals and targets.

3. Identifying training and development needs – An employee’s areas of weakness are also the areas for improvement or development. These are the shortcomings in the individual’s performance, which need to be improved upon.

4. Rewarding performance – Rewarding a good performer and punishing a bad one encourages employees to perform better. As has been stated in the reinforcement theory, a behaviour is a junction of its consequences.

5. Improving performance – Once the strengths and weaknesses are identified, the employee can be encouraged to overcome his weaknesses and leverage his strengths to optimise his performance.


Objectives of Performance Appraisal – 12 Main Objectives: Provide Feedback, Motivate Superior Performance, Encourage Performance Improvement and a Few Others

The main objectives of performance appraisal are as under:

Objective # 1. To Provide Feedback:

For having a performance appraisal system providing feedback is the most common justification for an organisation. Through the performance appraisal process the individual learns exactly how well, he did dining the previous twelve months and can then utilise that information to improve his performance in the future.

In this regard, performance appraisal serves another important purpose by making it sure that expectations of the boss are clearly communicated.

Objective # 2. To Motivate Superior Performance:

Performance appraisal helps motivate people to deliver superior performance in several ways. It is done mainly in three ways, First, the appraisal process helps them learn just what it is that the organisation considers being superior.

Second, since the most people want to be seen as superior performers, a performance, appraisal process provides them with a means to demonstrate that they actually are. Finally, on the basis of performance appraisal encourages employees to avoid being stigmatised as inferior performers (or often worse, as merely “average”).

Objective # 3. To Encourage Performance Improvement:

The problem is, how can anyone improve if he does not know how he is doing right now? A good performance appraisal points out the areas where individuals need to improve their performance.

Objective # 4. Setting and Measuring Goals:

Goal setting has consistently been demonstrated as a management process that generates superior performance. The performance appraisal process is commonly used to make sure that every member of the organisation sets and achieves effective goals.

Objective # 5. Promotion Decisions:

In an organisation everyone wants to move ahead. The question is how should the company decide who gets the brass rings? Performance appraisal makes it easier for the organisation to make good decisions about making sure that the most important positions are filled by the most capable individuals.

Objective # 6. Counselling Poor Performers:

Everyone does not meet the organisation’s standards. Performance appraisal forces managers to confront those whose performance is not meeting the company’s expectations.

Objective # 7. To Determine Compensation Changes:

Almost every organisation believes in pay for performance. But the problem is how can pay decisions be made if there is no measure of performance? Performance appraisal provides the mechanism to make sure that those who do better work receive more pay or amount.

Objective # 8. To Support Manpower Planning:

Well-managed organisations make regular assessment of their bench strength to make sure that they have the talent in their ranks that they will need for the future. Companies need to make the determination who and where their most talented members are.

They need to identify and spot the departments that are rich with talent and those ones that are suffering a talent drought. Performance appraisal gives companies the tool they need to make sure they have the intellectual horsepower required for the future.

Objective # 9. To Determine Individual Training and Development Needs:

It is emphasized upon that the performance appraisal procedure should include a requirement that individual development plans be determined and discussed. In such a case the individuals can make good decisions about the skills and competencies that they need to acquire to make a greater contribution to the company. Consequently, they increase their chances of promotion and lower their odds of lay-off.

Objective # 10. To Determine Organisational Training and Development Needs:

The question is if the organisation would be better-off sending all of its managers and professionals through a customer service training programme or one on effective decision-making. The answer is that by reviewing the data from performance appraisals, training and development professionals can make good decisions about where the organisation should concentrate company a wide training efforts.

Objective # 11. To Determine Improving Overall Organisational Performance:

A performance appraisal procedure allows the organisation to communicate performance expectations to every member of the team and assess exactly how well each person is doing. When everyone is clear on the expectations and knows exactly how he is performing against them, this will result in an overall improvement in organisational success or achievement.

Objective # 12. To Encourage Coaching and Mentoring:

Managers are expected to be good coaches to their team members and mentors to their protégés. Performance appraisal identifies the areas wherein coaching is necessary and encourages managers to take an active coaching role.


Objectives of Performance Appraisal – 8 Main Objectives of Employee Performance Appraisal

Performance appraisal plans are designed to meet the needs of the organisation and the individual. It is viewed as core to good human resource management. According to Cummings, “the overall objective of performance appraisal is to improve the efficiency of an enterprise by attempting to mobilize the best possible efforts from individuals employed in it. Such appraisals achieve four objectives including the salary reviews, the development and training of individuals, planning job rotation and assistance promotions.”

Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development.

The following main objectives of employee performance appraisal are:

1. To identify employee weaknesses and strengths;

2. To identify and meet training needs and aspirations;

3. To generate significant, relevant and valid information about employee;

4. To provide inputs to increments of rewards, transfers, promotion and salary administration.

5. To help in improving employee’s performance if he is not found to be suitable during the review period;

6. To create a desirable culture and tradition in the organisation;

7. To help in planning career development and human resources planning based on potentialities.

8. To provide ‘deadlock’ and research data for improving overall human resources information system.


Objectives of Performance Appraisal – 4 Important Objectives: Organisational, Work Related, Communication and Career Development

Performance appraisal refers to all those procedures that are used to evaluate the personality, the performance and the potential of the employees in the organisation. Performance appraisal can be informal or formal. Informal performance appraisal is a continuous process of giving feedback to the subordinates i.e., the information about how well they are doing their work in the organisation. The informal appraisal is conducted on a day-to-day basis.

For example, the manager spontaneously mentions to his subordinates that a particular piece of job was well performed or poorly performed. As there is a close connection between the behaviour and the feedback, the informal appraisal encourages desirable performance and discourages undesirable performance before it becomes permanently engrained.

Therefore, informal appraisal must not be perceived merely as a casual occurrence but should be taken as an important activity and an integral part of the organisation’s culture.

On the other hand, the formal performance appraisal occurs annually on a formalised basis and involves both appraised and appraiser sitting down together and finding answers to the questions like –

1. What performance was set out for the period?

2. Has it been achieved?

3. What have been the shortfalls and constraints?

4. What are we going to do now?

5. How will we know that we have done it?

6. What kind of feedback is expected?

7. What assistance is expected to improve the performance?

8. What rewards and opportunities are likely to follow from the performance appraisal?

When the employees have this type of information, they become aware of what exactly the organisation expects from them, what assistance is available for them in the organisation and what can they expect after achieving the required level of performance. This will increase the employee’s acceptance of the appraisal process and result in the trust that the employee has in the organisation.

An environment that provides an opportunity to the employees for further growth and minimises stressful situations certainly enhances the appraisal acceptance in the organisation. Establishing this type of environment goes far beyond the performance appraisal process.

It can be seen that every aspect of managing people and their work is related to the improvement of the quality of work life. Therefore, performance appraisal becomes an integral part of a trustful, healthy, and happy work environment that goes a long way in promoting the same. Performance appraisal has been used for basically three purposes like taking remedial actions to correct the pitfalls, maintenance of good performance and the development of employees.

So performance appraisal in the organisation needs to cover all these three purposes with the same magnitude. If any purpose dominates the other, the system will become out of balance. For instance, if remedial purpose is foremost, then the performance appraisal will become a disciplinary tool, a form of a charge sheet, a tool of power instead of an instrument of evaluation.

If maintenance is taken as the main objective, then the process may become short, skimped and merely a perfunctory ritual. If there is too much emphasis on development, then the focus falls on the future assignments rather than on the current jobs.

The goals of the organisation can be achieved only when employees put in their best efforts, but the logical question that arises is how to ascertain whether an employee has shown his or her best performance on a given job. The technique of performance appraisal provides an appropriate solution. The employee assessment is one of the fundamental jobs of HRD but not an easy one though.

In simple terms, performance appraisal may be understood as the assessment of an individual’s performance in a systematic way and this performance is measured against the factors like job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, cooperation, judgement, versatility, health and the like.

So, this assessment is not confined to the past performance alone, but the potential of the employees for future performance is also assessed through performance appraisal.

Thus, performance appraisal is the systematic evaluation of the individual with respect to his or her performance on the job or his or her potential for the development. Performance appraisal is a formal structured system of measuring and evaluating an employee’s job related behaviour’s and outcomes, to discover how and why the employee is presently performing more effectively than before, so that in the future the employee, organisation and society benefit.

The objectives of performance appraisal are classified into four categories which are as follows:

1. Organisational Objectives:

(i) To serve as the basis for the transfers and terminations in case of the reduction in the requirements of manpower.

(ii) To provide the basis for the promotions and demotions.

(iii) To provide the basis for wage and salary administration and for the decisions in relation to the increase in pay and incentives.

(iv) To provide the basis for planning the training and development programmes.

2. Work-Related Objectives:

(i) To help the management in placing the employees according to their ability, competency and interest.

(ii) To increase the efficiency of the employees at work.

(iii) To perform job evaluation.

(iv) To assess the performance of the employees in comparison to the job requirements.

3. Communication Objectives:

(i) To provide career planning, motivation, counselling and coaching to the employees.

(ii) To establish clear goals, i.e., what is expected from the employees in terms of the performance and the future work assignments.

(iii) To give feedback to the employees so that they can know their job performance and where they stand.

(iv) To reduce grievances by developing positive superior-subordinate relations.

4. Career Development Objectives:

(i) To assess the career potential of the employees.

(ii) To determine the strengths and weaknesses in the working of the employees and also to find remedies for the weaknesses of the employees.

(iii) To plan for the promotions and transfers of the employees.

(iv) To plan the career goals.


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