Performance forms the backbone for all organizations, be it for profit or even for not for profit causes, although the criteria might vary from one company to another. Management ought to know good performers as well as the ones struggling and one or rather the best way to do it is through a fool-proof, error-free, fair and discrimination free performance appraisal process. It is an organization wide practice and therefore, performance appraisal cannot be a standalone activity for one department or a set of employees whereas it is non-existent or completely different for another department within the same organization. The main reason for the same is to align individual performance with that of the department, that in turn should be in line with the departmental as well as organizational goals and objectives. Importantly, performance appraisal should not be a tool to spread fear factor within the rank and file of the organization, nor it should be a tool for the superiors to flaunt so as to settle personal scores with their subordinates, whenever there are difference of opinion in the interest of the welfare of the organization, or for favouring an individual employee or group of employees close to the superior. Performance is a tool for motivating people that should culminate in enhancing performance and productivity. The managerial practice ensures that people are managed truly, honestly as performance appraisal provides opportunity to communicate business strategy to individual employees, it enables in establishing shared understanding between the appraiser and appraise, provides a tool to motivate employees, improve working culture and environment, provide constructive feedback with opportunities to grow and align individual goals with that of the organization. Performance Management has been seen as an Human Resource Development function as it provides avenues to improve the human asset or the intellectual capital of the organization through continuous monitoring of the performance, sans any discrimination. Aligning or bringing together of the individual goals with that of the organization cannot be done in a better way than that of performance appraisal as its qualitative as well as quantitative in nature. Performance appraisal can have different names like performance review, performance evaluation, career development discussion, employee appraisal, although the underlying theme remains the same for all and that is to evaluate performance so as to increase productivity. The broad objectives of performance appraisal could be record base full proof decisions on compensation and benefits, SWOT analysis of employees to put the right person in the right job at the right time, providing feedback, improving communication channels between the management and the employees, self reflection of all individual employees, means to influence working habits and behaviors of employees, decide on training and other developmental programs. The clear cut advantages it can bring into an organization if its state-of-the-art bias free performance appraisal process. However, one need to know the difference between performance management system and performance appraisal system as the former emphasizes on performance of individuals, team and organization, it is continuous rewards may or may not be integral, designed by the human resource department, monitored by the respective department, ownership is with line managers although HR help in its implementation. The latter gives importance to relative or comparative evaluation of individuals, which is also an annual exercise, necessarily rewards good performance and punishes as well if required, designed and monitored by the Human Resource department, and the ownership is mostly with the Human Resource department. It is therefore evident that Human Resource (HR) department happens to be the major department facilitating and implementation of performance appraisal set-up as it ensures free, fair and discrimination free processes. The advantages of performance appraisal are obvious-promotion of performers, framing of the right compensation and benefit structure, employee development, selection validation of wrong people for wrong positions, a tool for make communication more effective, apart from motivating the people. All the aforesaid steps are done with an intention to enhance productivity, which can be managed growth or working smarter or to make it ideal with more output with reduction in input, increasing the level of efficiency or even to manage a decline. Labor productivity used to be the word earlier, now its employee productivity as human resource is no more a mere resource, its an asset that differentiates leaders from followers and moreover, its not for labour, its for one and all, i.e. blue collared as well as white collared workers.
(Adapted from the ICT, Bachelor Handout)
Additional reading links-
