Introduction to Importance of Performance Appraisal
Everyone loves appreciation, and everyone loves to be appreciated, so the company appreciates someone; it does not keep it a secret. The organizations express their appreciation in the form of what we call performance appraisal or performance reviews. Performance appraisals are also known as the performance reviews or the performance evaluation used by the companies to assess an employee’s performance and appreciate him/her for his/her precious and dedicated contribution to the organisation’s growth. Thus, the importance of performance appraisals can be defined as the process of evaluating an employee’s performance and personality as per the organization’s set of standards like versatility, quality of work, efficiency, cooperation, and teamwork, etc.
Based on the evaluations and assessment for the performance rating, the employee is awarded and rewarded in the form of promotions, cash awards, certificates, etc., and the company provides a chance to grow. Performance appraisals/reviews benefit both employees and employers as feedback is an important part of the performance evaluation.
Purpose of Carrying out Performance Appraisals/Performance Reviews
- A performance review is pivotal as it helps to recognize the abilities and competencies of an employee and also aids the company to find out how an employee’s abilities can be used and improved for future growth and development.
- The most substantial benefit of the performance evaluation system from the point of view of a manager or the department head is that it helps maintain an employee’s performance documentation for the time period he/ she is serving in the organization and even beyond that.
- Performance appraisal sessions are the time feedback and assessments to identify the quality of the performance, set of expectations of both employee and the employer from each other, and provide an opportunity to work upon weak areas that can be improved.
- Performance reviews also help identify the type of training requirements needed by the employees to improvise them.
- Performance review sessions open up the communication channel between the management and the employees, giving them an opportunity to speak their minds out.
- It helps to identify the potential and other areas of expertise of the employee, which can be useful for the organization providing them with the chance to explore more.
Tips for Effective Performance Appraisal
- Preparation from the manager’s end for the performance appraisal is the key step for appraisal. It is very important for the manager to filter out the feedback points and express and explain the feedback point in an effective manner.
- Setting an expectation is the next most important step in the performance appraisal process. The expectations required to be documented, and the employee must have a mirror clarity about what the organization expects out of him/her. There should be polite discussions between the manager and the employee related to the set of expectations and responsibilities.
- The appraisal should be performance appraisal and not performance management. The employee should not feel low or morally down in any sense during the appraisal session, and it will push them a step backwards, and the feedback should be given in such a way that the employee does not feel humiliated or insulted.
- For an effective performance appraisal, the manager must document all the occurrences during the whole assessment time interval that the performance evaluation covers. These should comprise positive interactions like the completion of projects before a deadline or on time along with the undesirable performance issues such as missed deadlines or punctuality issues and several other situations that the employee could have handled more effectively to improve the team performance.
- There must be absolute transparency maintained in the performance appraisal process, and the sessions should be one-on-one sessions for the communication to be more effective. One-on-one sessions give employees the comfort zone to speak their minds out. The manager should try to make the feedbacks more constructive as nobody likes negative feedback. The feedback session must start and end with a positive note.
- The performance appraisal boosts the morale of the employees and motivates them to work more towards achieving the goal of the organization.
- Performance reviews and appraisals help to analyze an individual’s performance and how the individual employee’s role will affect team performance.
- Performance appraisal is the best way to identify the weak areas and the strength areas of the employee, giving them an opportunity for self-assessment and self-development through the open communication and feedback sessions.
- It establishes a merit-based system that motivates the employees to put their best foot forward in order to be recognized for their efforts.
- Performance reviews provide a systematic approach for reaching out to the management to clear expectations and have discussions about future plans. Also, it clarifies the employee’s roles and responsibilities in the organization and reaching out to new heights.
- Performance appraisals are a very effective way to promote employees based on their performances. It also helps the management to make the transfer decisions as per the company requirements.
- Performance ratings and reviews are very beneficial for the human resource department as it gives them time for human resource planning and be prepared for the employee recruitment in the future if any employee is leaving or getting terminated from the organization.
- Performance appraisals are very important for the organizations when it comes to lay off decisions as it gives a clear insight into the employee’s performance whether the employee is performing well or underperformance. The underperformers are given chances to improve before being laid off.
- It helps managers arrange refreshments and career and development programs for the employees as per their performance evaluation. Everyone aims at a higher position in the company so the managers can arrange training programs respectively based on the performance evaluation of the employees.
- Performance appraisals are crucial for retaining employees. When the organizations keep the employees motivated and satisfied, the employee will automatically tend to stay in the company, and thus it helps to retain the good, hardworking and efficient employees in the company.
This is a guide to the Importance of Performance Appraisal. Here we discuss the purpose of carrying out performance appraisals, tips, and merits. You may also look at the following article to learn more –