performance appraisal

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performance appraisal

the process of considering and evaluating the performance of an employee with the objective of improving JOB performance. The information generated during appraisal can be used as a basis for measures to improve JOB SATISFACTION, career planning, MANPOWER PLANNING, TRAINING and as a basis for deciding levels of PAY.

Appraisal usually involves an employee and his immediate superior, although in some organizations employees appraise themselves (self-appraisal) or, much more rarely, are appraised by their immediate colleagues or subordinates. Whoever the appraiser, the focus of appraisal can take a number of forms:

  1. attitudes displayed at work. Experts believe this to be an undesirable form of appraisal since attitudes are not necessarily relevant to job performance whilst appraiser prejudice can bias the outcome;
  2. behaviour in work tasks, for example the proportion of incoming telephone calls answered in a period;
  3. meeting of objectives. These can be decided by the superior but in appraisal of managers it is usual for objectives to be agreed in advance (see MANAGEMENT BY OBJECTIVES).

For the last especially, interviews are the main vehicle for appraisal. Although the information generated can itself be of great use, there is a tendency for appraisal to involve an assessment of individual performance and competence. Often performance is condensed into an overall rating, ranging from ‘excellent’ to ‘very poor’. Apart from the difficulties of producing such a rating – it often involves a judgemental leap from the data provided – this can introduce tension into the process. In so far as individuals feel they are on trial an element of distrust may enter the process and the validity of the information may become questionable.

These dangers become greater when pay is linked to the appraisal process (performance-related pay). Usually, the overall rating achieved will determine whether an employee receives a bonus (MERIT PAY) or is moved up the pay scale. This provides an incentive for individuals to exaggerate their achievement or to establish easily-met objectives, whilst the poor performer denied an increase is as likely to feel resentment as to be motivated to improve his or her performance. See CRITICAL INCIDENT TECHNIQUE, BEHAVIOURALLY-ANCHORED RATING SCALE, BEHAVIOURAL OBSERVATION SCALE.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson