Importance Of Performance Appraisal

Performance appraisal is the evaluation of the individual performance of organizations’ employees so as to know more about the abilities in relation to growth and development. Performance appraisals are systematically done as below;

• Supervisors do analysis on factors that influence employee performances
• The employees’ pay is measured and compared with organizations targets and plans
• Employees are guided by employers to do the right thing in relation to the ethos of the organization for better performance

The main importance of performance appraisal is that it enables the employee to have a rare one-on-one session with his superior; these sessions address issues that might otherwise not be addressed. If conducted properly, it has almost universally been reported to be a very beneficial experience.

Most employees consider appraisal interviews as the only uninterrupted time they get with their supervisors to check on their development. These intense interactions between the supervisors and their subordinates should never be underestimated because of their positive effect on the organization. Unfortunately, they are greatly undervalued and not sufficiently utilized by both parties.

According to the recently conducted survey, up to 80 per cent of organizations exercise performance appraisal. In each of these companies, less than 5 per cent of employees had an A grade in relation to performance management.

Appraisal, therefore, provides an important opportunity to focus on goals and work activities. It helps in identifying and correcting any existing problems and encourages improved future performances.Employers should, therefore, recognize the fact that formal appraisals have a tremendous impact on the satisfaction, productivity and motivation of employees as explained below.

Evaluation and Employee Development for Importance of performance appraisal

It might be understated but the main objective of appraisal is to evaluate employees against the set objectives of the organization.

As good as it can be, some organizations do not hold it in high regard for a simple reason that it can cause distress and anxiety to employees thereby affecting their overall performance. To them, the process of evaluation is demoralizing as it is dehumanizing as unfair judgment may be made.

As negative as it may at times be portrayed, the appraisal has since inception helped the organizational management body in framing policies and programs that improve employee productivity. Each employee strengths and weaknesses are analysed and areas of specialization matched with individual strengths. It is also essential in designing future developments and career programs.

Employees’ Promotion 

The importance of performance appraisal to the human resources department as efficient employees are identified and promoted. On the other hand, the inefficient ones are demoted or encouraged on areas to improve on. Again, employees with inflated ideas of how well they can do within the organization are realistically assessed on their worth to the organization.

Motivation and Satisfaction for Importance of performance appraisal

In most cases, an appraisal is used as a motivational tool. An employee is considered to be efficient if he meets his or her targets. The deficit in meeting targets forms a basis of encouragement and motivation for better performance in future. With the ever changing market conditions, appraisal helps in realigning objectives thus making targets accurate and relevant thereby avoiding disappointments in the long run

It has been proved over time that recognition and motivation are very important incentives that lead to human satisfaction. In fact, once motivated, the most resourceful, successful and productive employees do not relent on their goals pursuit. Setting new feasible targets during appraisal should also act as motivation and make employees more confident when they attain them

The appraisal program acts as an indicator to the employee that the organization is fully interested in personal development and performance thereby providing a sense of worthiness and belonging.

Focus and Compensation

Most managers are busy in most days and hardly find the required time to be briefed on the ongoing projects. Appraisals, therefore, are a good opportunity for them to shift their focus from their daily hustles and focus on employees and the direction to which the team is headed.

It is also important to note that, when the appraisal is done, merit ratings are compiled and compensation packages including salary rates, extras, bonuses, prerequisites and allowances easily compiled. This criterion of compensation brings about recognition by merit and not by seniority.

Effective Communication for Importance of performance appraisal

Effective communication between employee and the employer is very important in any organization. Performance appraisal enhances effective communication since

• Employers understand better the skills of their employees
• Spirit and work morale of workers is boosted
• Employees trust their employers more and will have more confidence and trust in their superiors

With cohesion, trust, confidence and morale within workers, communicating the organization’s vision to team members becomes easy. This is essential for overall productivity.

At this time also, any concerns are addressed to by supervisors, feedback on performance was given and better approach to different matters suggested for improved output.

Induction and Recruitment policy

Data from appraisal is very important as it can be used to measure the recruitment and induction processes of the organization. I.e. it helps in knowing how well employees hired in a given time period are performing.

When recruitment strategies are amended, Performance appraisal data can be used in monitoring effectiveness. Performance data collected yearly in relation to new hires can be analysed and conclusion made on whether the workforce is steadily improving or declining.

Training and Development

Through appraisal, the supervisor and the subordinate are able to identify the relevant needs and organize for employee training.Supervisor-subordinate discussions openly bring forth the missing but required career skills.After training, therefore, appraisals can be linked to performance outcomes and organizations’ future career aspirations.

From the organization’s point of view, data from appraisal can be used to explain the need for training. When analysed against different variables, this data provides an important training audit report for the whole organization.

With all the above-listed positives, an appraisal can have a desired positive effect on team success. Constant communication with team members is also important as once a year appraisal is not sufficient to know how well the team is performing.