To nearly all of us who have been human resource professionals, a performance appraisal is a systematic process that evaluates an employee’s performance in terms of his productivity with respect to the pre-determined set of objectives. But since appraisals facilitate communication between management and employees, which further helps in conveying the expectations of the management to the employee and vice versa, there is much more than the great opportunity for communicating the operation of the organisation to employees on a team.

A performance appraisal is a formal process used to assess an employee’s effectiveness and productivity and serves both administrative and developmental purposes. Administratively, it helps guide decision-making regarding employment actions, personnel planning and training and development.

One must always bear in mind that appraisals are the means to an employee’s career development. And, effective performance appraisal methods not only help the employee grow, but also the organisation. At the same time, it is imperative that the HR helps staff employees clearly define and understand their responsibilities. Therefore, it’s absolutely necessary for the HR to understand the working methodology and demands of the company.

The technique involves making statements that describe both the positive and the negative reactions to stimulus by the employee at his work place. A practiced HR would ideally record cumulatively in a given period of time, so that one can evaluate how good the employee is at his job. His proficiency is also determined by how he deals with his day-to-day activities.

The evaluation can also be a good chance or a platform to speak about the goals, aims and mission of an organisation as well. Besides, any performance appraisal is also the significant tool to motivate the employee.

Performance appraisal is basically a methodical assessment of the performance of recruits as well as to get the clear update about the abilities of a person for further growth and development. It is generally done in systematic ways that comprises measuring the employees’ payments and compare it with targets, analysing the factors behind work performances of employees and to direct them for an enhanced performance.

As someone who has been a veteran in the HR serves, I tend to be not merely a manager but also a mediator of any troubled relationships.  For that I always insist on setting up regular meetings between the manager and the employee. During these meetings, the HR representative can discuss the nature of the relationship and provide feedback as to how it can improve.

In this regard, it’s also extremely important to understand the close association as well as rapport between the employee and his colleagues, especially his supervisor, or his immediate senior. Relying solely on supervisors may lead to a biased appraisal system. Many aspects of a person’s performance may remain hidden from managers, particularly in team-based settings where supervisors do not work in the same physical setting as the employees. Therefore, organisations are introducing additional raters into the system, such as peers, customers, and subordinates.

Hence, the main aim behind any appraisal is to help maintain a fine balance for the HR that not only solves issues, but also helps comprehend the complexities of the relationships. For achieving this, one must maintain records in order to determine compensation packages, wage structure, salary raises, etc. while also identify the strengths and weaknesses of employees to place right men on right job, to maintain and assess the potential present in a person for further growth and development, to provide a feedback to employees regarding their performance and related status, serves as a basis for influencing working habits of the employees and to review and retain the promotional and other training programmes.

Research shows that performance appraisals tend to be viewed as more effective when companies tie them to reward decisions and to terminate lower performers. This is not surprising in light of motivation theories such as reinforcement theory, which indicates that behavior that is rewarded is repeated. Tying appraisal results to rewards may lead to the perception that performance is rewarded. However, if performance appraisal ratings are not accurate, it is possible for appraisals to be a major cause of reward unfairness. It is said that performance appraisal is a speculation for the business which can be justified by several returns that includes promotion, compensation, employees’ development, selection validation, communication and motivation.

Each organisation should make its own criteria for evaluating an individual’s performance. A variety of templates are available for use for the Staff Performance Appraisal process, and Supervisors may edit the templates to create a customised set of appraisal forms to evaluate performance and communicate in styles and formats that best fit the types of positions held by the individuals in their respective departments.

It is important to note that 360-degree appraisals are not often used in determining pay or promotion decisions and instead are treated as feedback tools. Using 360-degree feedback in reward decisions may be problematic, because individuals may avoid giving objective feedback if it means causing a peer to lose a bonus. Since not all feedback will necessarily be positive, if competition or jealousy exists among peers, some feedback may be retaliatory and too negative.

The appraisal is not the end. Once the appraisal is done, it is HR’s responsibility to hand over the increment letters or review reports. As an HR professional, he or she must ensure employees are satisfied with the appraisal process, and need to explain the individual as to why he/she has got or not got a salary hike, and also convey the management’s decision effectively.

(The writer is head HR, Angelique International Limited)