Performance Appraisal Process

For many employees working in the organized sector, the term appraisal process conjures images of hope and fear simultaneously. Hope for a better grade and fear about potential downgrading or a bad rating. The weeks leading up to the appraisal are filled with hectic activity when the employees get down to evaluating themselves and prepare to market their achievements during the time for which the appraisal is being conducted. Before launching into the details of the appraisal process and the theory and practice of the same, it is pertinent to understand what the term appraisal process refers to and why it is important for the firm as well as the employees.

What constitutes the Performance Appraisal process ?

The performance appraisal process, simply put, is the time of the year when the employees are evaluated on their performance during the last six months or one year depending upon the timeframe that is set for the same. The performance appraisal process is conducted between the employee and his or her manager for the first round and subsequently between the manager and the manager’s manager before going into the third round which involves the above people excluding the employee but involving the HR manager as well. The various rounds that comprise the appraisal cycle correspond to the different stages of the process culminating in the final grading of the employee.

Appraise and Appraiser

The most important round is the appraisal interview itself (we will discuss more about this in a separate article) between the employee and his or her manager. The employee who is being evaluated is called the appraise and the person (usually the manager) who is doing the evaluation is called the appraiser. The appraiser and appraise prepare themselves for this round by doing a self evaluation (by the appraise) and an objective evaluation (by the appraiser). This is the round in which the most important achievements as well as glaring failures on the part of the appraise are discussed threadbare and usually the employee’s role in the process is limited to this round.

What is the outcome of the Appraisal Process ?

As outlined above, the outcome of the appraisal process is the grade that is decided for the employee as well as the salary hike or the bonus potential that is awarded to the employee. Typically, organizations divide the year in which the employee’s performance is evaluated into two cycles, one for deciding the salary hike and the other for deciding how much bonus he or she gets for the cycle. In this way, organizations ensure that there is no overlap in grading the employee and a fair and balanced evaluation is the desired outcome though this does not always happen in reality.

Shortcomings of the Appraisal Process

The successful completion of the appraisal process hinges on all the participants approaching the same with an intention to contribute positively instead of bringing personal biases and prejudices to the table. Management experts usually prescribe a set of do’s and don’ts to the participants in order to have an harmonious process. However, as has been pointed out above, the process itself is not without its shortcomings and the expecting the participants to be rational and objective at all times is indeed difficult. Further, since most organizations decide the grades in a way similar to the b-school equivalent of Relative Grading instead of absolute ratings, an element of competitive rivalry creeps into the process making some employees unhappy.

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Human Resource Management