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Definition of Performance Appraisal


Everything you need to know about the definitions of performance appraisal. After selection, training and development of employees and they being on job for some time, it is essential to appraise their performance which will give a fairly good idea about the effectiveness of the processes of selection, training and development undertaken by the organisation.

The outcome of performance appraisal also indicates whether the organisation is going in the right direction or not.

Performance appraisal is one of the important sub-functions of staffing in management. Human behaviour is a complex phenomenon because no one can anticipate accurately what exactly a man is going to do.


Edwin B. Flippo, “Performance appraisal is a systematic, periodic and so far as humanly possible, an impartial rating of an employee’s excellence in matters pertaining to his present job and to his potentialities for a better job.”

Definitions of Performance Appraisal by Eminent Management Thinkers, Authors and Experts

Definitions of Performance Appraisal  Provided by Eminent Management Thinkers like Gomej Meija, Slabbert and Swanepoel

Performance appraisal is one of the important sub-functions of staffing in management. Human behaviour is a complex phenomenon because no one can anticipate accurately what exactly a man is going to do. The individual joins an organization to satisfy his objectives.

But the organization also has its own goals, which need not to be in conformity with the individual goals. If the goals of the individual and organization are extremely contradictory, a conflict will arise which either result into suppression of human personality or a complete will set back to his work.

It is not desirable that individual’s personality be suppressed but at the same time organization goals should also be achieved. For monitoring this process of achieving organizational goals, the performance of an individual needs to be assessed after a regular interval so that the desired behaviour could be maintained. This will also help the organization to satisfy the needs and the aspiration of the individual by providing him more facilities, improved working condition and carrier advancement.


According to Gomej-Mejia – “Performance Appraisal involves the identification, measurement and management of human performance in organisation.”

According to Slabbert and Swanepoel – “Performance appraisal is a formal and systematic process by means of which the relevant strengths and weaknesses of the employees are identified, measured, recorded and developed.”

According to Beach – “Performance appraisal evaluates systematically performance of individual with regard to his or her performance on the job and his potential for development.”

Within the purview of HR practices, the performance appraisal provide some ways and means to examine and evaluate the required skill and capabilities of employees for, a particular job. It is an operating method to provide needful data and information in respect of different area of personnel department.


Performance appraisal may also be defined as a process that involves:

(i) Setting work standard;

(ii) Assessing the employees actual performance relative to these standards; and

(iii) Providing feedback to employee with the aim of motivating that person to eliminate performance deficiencies or to continue to perform above par.

How Performance Appraisal Differs from Counselling?

Counselling follows performance appraisal. It covers two aspects, i.e., ‘tell and sell’ where the boss tells his subordinates where they stand. He adopts the method of criticism and persuasion.

These two are the fundamental tools for counselling. In counselling, the boss discusses the future development by encouraging his subordinates to appraise themselves. Here, the give and take problem-solving approach may be used throughout the counselling meeting.

The aim of the counselling is not just to tell the subordinates what they have done wrong. Instead, the boss reveals the root cause of the problem and secures constructive solution. The boss generally avoids criticizing his subordinates and he tries to emphasize the organizational development.

In fact, the performance appraisal process if understood in its comprehension includes the counselling and coaching. Counselling and appraisal differ slightly because the counselling is done on day-to-day basis whereas the appraisal is done after a regular interval. Therefore, it can be said that the performance appraisal would yield dividend only when the proper counselling takes place in an organization.

Definitions of Performance Appraisal 

To appraise means to make a formal judgment about the value of a person’s work. So, performance measurement or appraisal is a systematic and objective way of judging the relative worth or ability of an employee in performing his\her work. It is the process by which an employee’s contribution to the organization during a specified period of time is assessed. In other words organizations evaluate the job performance of their employees.


According to Spriegel and others, “performance appraisal is the process of evaluating the employee’s performance on the job in terms of requirements of the job.”

In the words of Edwin. B. Flippo, “Performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in matters pertaining to his present job and his potential for a better job.”

Alford and Beatty have defined it as – “the evaluation or appraisal of the relative worth to the company of a man’s services on his job”.


According to Beach, “performance appraisal is the systematic evaluation of the individual with regard to his or her performance on the job and his potential for development.”

Thus, performance appraisal refers to the task of rating or assessing the individual’s performance and abilities at work.

Definitions of Performance Appraisal 

Performance appraisal has a history behind it. Formally it started in China. The Imperial Rates appraised the performance of members of the offi­cial family. Thereafter, we find the appraisal introduced in the U.S.A. shortly before World War I (1914-18). It is now widely used in American companies to measure employees’ performances.

In India, too, this is an accepted method of checking workers’ performance. The Indian companies use this tool of measurement of workers’ performance for training and development, providing feedback to employees and personnel research, and in determining wages, promotions and transfers.


Performance appraisal has been defined as a systematic evaluation of personnel by supervisors or others familiar with their performance. As a matter of fact, appraisals are judgements of the characteristics, traits and performance. This is an objective way of judging the relative worth or ability of a person in performing his task. This is essential for making many administrative decisions used in a company management.

Decisions such as relating to selection training, promotion, transfer, wages, salaries etc., may be well based on performance appraisal. Also, it helps in personnel research. The appraisal methods that are usually followed enable the management to judge the relative worth or ability of an employee in the performance of his task and identify the performers and non-performers of assigned tasks.

Broadly speaking, a performance appraisal is aimed at:

(1) Identifying employees for different purposes – wages, promotions, transfers, lay-off, terminations etc.,


(2) Determining training needs for further improvement in performance,

(3) Motiva­ting employees by indicating their performance levels, and

(4) Establishing a basis for research and reference for personnel decisions in future.

While appraising performance of an employee, a difficulty arises as to what aspects of perfor­mance have to be appraised. This can be called the problems of criterion determination. A very broad definition of criterion is “that which is to be pre­dicted”. This refers to evaluative standards which measure a person’s performance, attitudes etc.

When the job is clearly defined, it is not diffi­cult to identify performance measures but in case of a broad definition of job; the identification of per­formance measures becomes difficult. Determining criteria for appraisal at the lower levels of an or­ganisation does not pose so much problem as the jobs there, are specific, but higher up in the hierar­chy, when jobs are more complex and clear-cut, tan­gible standards of performance are difficult to specify.

Defining Performance Appraisal:

Appraisal is the evaluation of worth and quality of merit. Appraisal should measure both performance in accomplishing goals and plans and performance as a manager. It is the evaluation of present perfor­mance and future capabilities.

Alford and Beatty have defined it as the evaluation or appraisal of the relative worth to the company of a person’s services on his/her job.

As a matter of fact, performance appraisal is a systematic, a periodic and so far as humanly possible an impartial rating of an employee’s excellence in matters pertaining to his/her present job and to poten­tialities for a better job.

Performance appraisal is a continuous activity. The management should plan it in a systematic and orderly manner. It must be conducted by some trained and experienced experts. If organised and oper­ated carefully, it eliminates the chances of personal prejudices and subjectivity in the appraisal. Systematic appraisals are instrumental in boosting the morale of the employees and also enabling them to know where they stand.

Performance appraisal is the 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 as well as the organization can mutually benefit.

The first step is to clarify what is expected of the employee. This can be done by identifying significant job segments and developing standards of performance. The second step is to appraise performance and to discuss it in an appraisal interview. At the conclusion of the interview, a performance improvement plan can be developed. On-the-job coaching is necessary to help the employee improve his performance. The first step is repeated on whatever time schedule is established by the organization.

In the words of Dale Yoder, “Performance appraisal includes all formal procedures used to evaluate personalities and contributions and potentials of group members in a working organization. It is a continuous process to secure information necessary for making correct and objective decisions on employees.”

According to the Douglass, “Performance appraisal is a method of acquiring and processing the information needed to improve an individual employee’s performance and accomplishments.”

In the words of Newstrom, “Performance appraisal is the process of evaluating the performance of employees, sharing that information with them and searching for ways to secure information necessary for making correct and objective decisions on employees.”

Edwin B. Flippo, “Performance appraisal is a systematic, periodic and so far as humanly possible, an impartial rating of an employee’s excellence in matters pertaining to his present job and to his potentialities for a better job.”

Definitions of Performance Appraisal – Defined by C. Heyel and Dale S. Beach

Performance appraisal means evaluation of performance of the employees in terms of job requirement. It is a procedure by which the organisation evaluates the contribution of the personnel towards the organisation and the job assigned to them and identifying the quantitative and qualitative outcome of such contribution.

According to C. Heyel performance appraisal is a, “process of evaluating the performance and qualifications of the employees in terms of the requirements of job for which he is employed, for the purposes of administration including placement, selection for promotion, providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally.”

The organisation sets goals and objectives and performance standards required to be achieved by personnel. Performance of the employees is evaluated against the standards set to ascertain whether the standard is achieved or not. This is an important function of human resource management that aims at controlling the employees. It helps the organisation in determining salaries and wages and increments to employees, to award promotions and to develop training and development plans for employees.

According to Dale S. Beach, “Performance appraisal is systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development”. There are different methods of performance appraisal.

There are different basis of appraisal of employees like the result produced by different employees are appraised, their personal traits and attributes like dedication, loyalty, ability, intelligence is evaluated, the behaviour of the employees, their attitude and interest is assessed, their functional capability like planning, organising, directing, staffing and controlling ability is assessed, their ability of cooperation, supervision is evaluated.

The superior evaluates the performance of the subordinates and aims to improve their performance. Appraisal of employee performance helps to determine the strength and weaknesses of the employees. Performance appraisal helps to take decision regarding the training and development, promotion, pay hike. Performance appraisal works positively in motivating the workers to perform better than before.

However this sometimes creates psychological pressure on the employees to outperform the standard. Performance appraisal involves a continuous monitoring of employee’s performance and is followed by training and development program, to raise the potentials of the employees. This is a process of strengthening and appreciating the human resources.

Performance appraisal is a system used by organization to evaluate performance of an employee at his current job. Every employee is evaluated on basis of work quality, productivity, completion of tasks and targets and his contribution towards his team and organization. The evaluation is mostly conducted by superiors / managers.

Evaluation of job performance helps to assess strengths and weaknesses of employees. It also helps the organization for planning / designing training and development programmes. Further, promotions, incentives, pay hike etc. are also offered on the basis of evaluation result. The process enables the organization to not only understand the difficulties and needs of the employees but also take appropriate actions to overcome them. In short, the main objective of performance appraisal is overall development of employees as well as the organization.

Different Approaches:

The methods of appraising management performance are classified in two categories, the narrow inter­pretation and the broad interpretation. The narrow interpretation of performance appraisal includes a post-mortem of a subordinate’s performance by his superior for a predetermined period of time.

Broad interpretation, alternatively, is designated as accountability management, management by objectives, or management by end results, and embraces a continuing and ongoing process connecting the past, present, and future activities that purports to improve the entire management process.

A distinct shift has taken place in the performance appraisal system. The traditional performance rating system has completely changed to the result-oriented appraisal. The traditional performance rating procedurally stressed upon the individual personality traits by the superior, a procedure that is now almost abandoned. The present result-oriented appraisal is a new way of viewing performance. It involves setting of goals by superiors and subordinates together. This method had gained popularity.

The relatively new total quality management (TQM) approach is a unique approach to performance management, and advocates a system-oriented focus. The TQM approach advocates the evaluation of personal traits (for example, perfection, energetic, systematic, qualitative, risk-taking, cooperation, team player, tenacious, tolerant, etc.), which were difficult to relate to job performance, unless the company had been structured to work teams, in the early days.

A traditional appraisal system used to be one person’s assessment of another, which could never be free from bias. Moreover, in the course of execution of duties and performing roles, an individual is required to interact with several people including his immediate superior, internal customers, external customers, suppliers, colleagues, seniors of cross-functional areas, and many subordinates.

All of them cannot be biased. Considering this to be of supreme necessity, the most-talked-of system of appraisal has come into use and is accepted as a principle system by many organizations.

Definitions of Performance Appraisal – Formal Definitions: With Its Changing Pattern

A systematic process of evaluating the behaviour of employees in the work spot is called performance appraisal. It includes both the quantitative and qualitative aspects of job performance. In this article performance refers to the degree of accomplishment of the tasks that make up an individual’s job. It indicates how well an individual is fulfilling the job demands.

Often the term Performance Appraisal is confused with effort, which means energy expended and used in a wrong sense. Performance is always measured in terms of results. A student, for example, may exert a great deal of effort while preparing for the examination but may manage to get a poor grade. In this case, the effort expended is high but performance is low.

This is called merit rating or performance evaluation. Common descriptions include merit rating, behavioural assessment, employee evaluation, personnel review and progress report, staff assessment, service rating and fitness report. But performance appraisal or evaluation is popularly used in the organizations. It is a continuous process; everyone in the organization who rates others is also rated by his superior. It is a systematic evaluation of an employee with respect to his performance.

Though this term performance appraisal is also called as merit rating but basically they are different. In merit rating, employees’ internal merits and qualities are studied like his nature, bodily and mental merits and so on while in performance appraisal, evaluation is made of quantitative factors based on production quality, quantity of accepted and unaccepted job and strata of work etc. Thus, in merit rating the stress is on what he is, while in performance appraisal, the emphasis is on what he does and what potentiality does he possess?

Performance appraisal is the key ingredient of performance management. In a work group, members, consciously or unconsciously, make opinion about others. The opinion may be about their quality, behaviour, way of working, etc. Such an opinion becomes basis for interpersonal interaction.

In the same way, superiors form some opinions about their subordinates for determining many things like salary increase, promotion, transfer, etc. In large organizations, this process is formalized and takes the form of performance appraisal.

Appraisal is the evaluation of worth, quality, or merit. In the organizational context, performance appraisal is a systematic evaluation of personnel by superiors or others familiar with their performance. Performance appraisal is also described as merit rating in which one individual is ranked as better or worse in comparison to others.

The basic purpose in this merit rating is to ascertain an employee’s eligibility for promotion. However, performance appraisal is more comprehensive term because its use extends beyond ascertaining eligibility for promotion such as training and development, salary increase, transfer, discharge, etc. besides promotion.

A formal definition of performance appraisal is as follows:

“It (performance appraisal) is the process of evaluating the performance and qualifications of the employees in terms of the requirements of the job for which he is employed, for the purposes of administration including placement, selection for promotion, providing financial rewards, and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally.”

We can define appraisal as follows:

Performance appraisal is a systematic evaluation performance and ability of an employee by his superior or others familiar with his performance.

Performance appraisal is a systematic and objective way of judging the relative worth or ability of an employee in performing his job. It emphasizes two aspects- systematic and objective. The appraisal is systematic when it evaluates all performances in the same manner, utilizing the same approaches so that appraisal of different persons is comparable.

Such an appraisal is taken periodically according to plan; it is not left to chance. Thus, both raters and ratees know the system of performance appraisal and its timing. Appraisal has objectivity also. Its essential feature is that it attempts at accurate measurement by trying to eliminate human biases and prejudices.

Changing Pattern of Performance Appraisal:

History of performance appraisal is quite old and it existed in some form in old days also. However, pattern of performance appraisal has undergone a sea change in terms of objectives and methods since it was introduced in a formal way in 1920s. Therefore, it has many facets, both in terms of conceptual and operational framework.

Definitions of Performance Appraisal – By McGregor and Dale Beach

Many theorists, authors, research scholars, and practitioners have defined performance appraisal in a wide variety of ways. A comparative analysis of these definitions reveal that in defining performance appraisal they were saying the same thing, but in a slightly modified way. In recent years, performance assessment is treated not simply as a method or technique or a system but by itself as Performance Improvement Management (PIM).

After selecting and placing the individual on the job, the responsibility of human resource department is not over. Some feedback from the immediate supervisor of the individual may be necessary, to ascertain whether the individual is meeting up to the expectations. This is where performance assessment comes in after investing so much on human resources, it is indeed important to know what is the return on investment. Performance assessment provides an answer to this question.

Let us examine some of these definitions:

Performance appraisal is defined as a systematic, periodic evaluation of the worth of an individual to an organization, usually made by a superior or someone in a position to observe his or her performance.

McGregor contends that performance appraisal is often perceived simply as a technique of personnel administration, but where it is used for administrative purposes, it becomes a part of managerial strategy, the implicit logic of which is that in order to get people to direct their efforts towards organizational objectives, management must tell them what to do, judge how well they have done, and reward or punish them accordingly.

Dale Beach adds another dimension to these definitions by stating that performance appraisal is the systematic evaluation of the individual with respect to his performance on the job and his potential for development. This definition fits well into the modern approach to performance appraisal in industry. Under this approach, the results of performance appraisal are used for developmental purposes. In other words, the performance evaluation reveals the developmental needs of individuals.

Traditionally, appraising the individual’s performance has been known as merit-rating. In recent years, several newer terms have been coined to describe this method. Some of these terms are- performance appraisal, performance review, performance evaluation, employee appraisal, progress report, personnel review, performance improvement management and so on.

From these and other definitions, we can draw some conclusions on the steps involved in the process of performance appraisal.

They are:

1. Establishment of standards of performance.

2. Comparing the actual performance against the established standards of perfor­mance.

3. Determination of areas of weaknesses, if any.

4. Developing or identifying programs to overcome the identified weaknesses.

If performance appraisals are not handled well, their benefits to the organization will be minimized. The appropriateness with which appraisals are conducted is important, and some guidelines can help. Organizational objectives as well as performance in the current position must be stressed. It is an objective analysis of performance and not so much about the subjective evaluation of habits. The appraisal should be acceptable to both appraiser and the appraisee. Both should agree that it has benefits for the organization and the employee.

A performance appraisal programme is an important instrument of HRM.

Its main advantages are as follows:

1. Development of personnel – On the basis of performance evaluation, the employer or the organisation or the two together can plan for the career development or development pro­gramme for the individual concerned.

2. Mutual comparison – Performance appraisal provides a scientific basis for the evaluation of all people. On the basis of this information, their relative abilities can be compared.

3. High morale – Generally, every worker is eager to know the management’s opinion about his/ her work and ability. A properly planned appraisal programme gives chance to a person to know about himself/herself and motivates him/her for development. This increases his/her mental strength and provides self-satisfaction.

4. Advantage to supervisors – By appropriate appraisal, the supervisor comes to know the effi­ciency of the personnel working under him/her, and he/she also comes to know their strengths and weaknesses. He/she suggests remedies to the management, on the one hand, and tries to overcome the weaknesses of the workers, on the other hand.

5. Helpful in proper placement – Appraisal is helpful in the placement of the personnel. This means that the personnel should be placed on the right jobs. Besides, the abilities of the work­ers kept on probation can be found out, and they may be placed at proper positions after probation or discharged or the probation period can be extended so that necessary improve­ments be made.

6. Utility for management – The main advantage of the performance management goes to man­agement. They know the abilities of the people and on that basis, the management sets right the programme for their promotion, transfer, forced leave or discharge. It serves in determin­ing a sound and suitable wage structure. Appraisals can be used to evaluate the training pro­grammes also.

7. Other advantages – Appraisals prevent grievances and develop a sense of confidence among employees if they are convinced of impartial evaluations. Hence, it improves labour manage­ment relations.

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