Performance Appraisal is the process of evaluating an employee’s performance of a job in terms of its requirements. Performance appraisal involves assessment of the actual performance of an employee against what is expected of him/her. Such assessment is the basis for awarding promotions, effecting transfers or assessing training needs.
According to 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”.
According to Heyel
“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 purposes of administration including placement, selecting for promotion, providing financial rewards and other actions which require differential treatment among the members of the group as distinguished from actions affecting all members equally”.
Characteristics/Features of Performance Appraisal
- It is different from merit-rating as it is wider than merit-rating.
- It aims to develop a rational bases for personnel decisions.
- It tries to find out how well the employee is performing the job and tries to establish a plan for further improvement.
- It is not a past oriented activity rather it is a future oriented activity showing employees where things have gone wrong, how to set everything in order, and deliver results using their potential in a proper way.
- It is not job evaluation.
- Its focus is on employee development. It forces managers to become coaches rather than judges.
- It may be formal or informal.
- Formal appraisal of an individual’s performance began in the Wei dynasty (A.D. 221-265) in China where an Imperial Rater appraised the performance of members of the official family.
- In 1883, the New York City Civil Service in USA introduced a formal appraisal programme shortly before World War I.
- The US Army adopted the man rating system for evaluating military personnel. Hourly paid workers were evaluated during 1920-1930 on the basis of rating scores in Industrial Units.
- Earlier appraisal system was termed as merit rating.
- In 1950, performance appraisal techniques came into picture and were applied on technical, professional and managerial personnel.
- From 1950 to till date tremendous changes have been made in the concept of performance appraisal.