Appraisal of performance is widely used in society. Parents evaluate their children, teachers evaluate their students and employers evaluate their employees. However, formal evaluation of employees is believed to have been adopted for the first time during the First World War. At the instance of Walter Dill Scott, the U.S.Army adopted the ‘Man to Man' rating system for evaluating military personnel. During 1920-930, hourly paid workers in industrial units were evaluated on the basis of rating scores. This early appraisal system was called “Merit Rating”. In the early 50s, performance appraisal techniques began to be used for technical, professional and managerial personnel. Since then, tremendous changes have taken place in the concept, techniques and philosophy of employee appraisal.
Performance evaluation or performance appraisal is the process of assessing the performance and progress of an employee or a group of employees on a given job and his potential for future development. It consists of all formal procedures used in working organizations to evaluate personalities, contributions and potentials of employees. It is the process of obtaining, analyzing and recording information about the relative worth of an employee. Performance appraisal and merit rating are used synonymously. But strictly speaking, performance appraisal is a wider term than merit rating. In merit rating, the focus is on judging the caliber of an employee so as to decide salary increment. It is designed primarily to cover rank and file personnel.
[...] Under this method, many evaluators join together to judge the employee performance in several situations with the use of a variety of criteria. It is used mostly to select employees for the first level supervisory position. Assessments are made to determine employee potential for the purpose of promotion MANAGEMENT BY OBJECTIVES Mr. Peter Drucker developed this method. MBO can be defined as a process whereby the supervisor and managers of an organization jointly identify its common goals, define each individual's major areas of responsibility in terms of results expected of him and use these measures as guides for operating the unit and assessing the contributions of each of its numbers”. [...]
[...] Conversely none of them might apply nevertheless, ‘least' in each group hence the term “forced choice” FORCED DISTRIBUTION METHOD This system is used to eliminate or minimize raters bias, so all the personnel may not be replaced at the higher end or at the lower end of the scale. It is possible and desirable to rate only two factors viz., job performance and profitability. Employees are placed between the two extremes of ‘good and ‘bad' job performance CHECKLIST-METHOD Under this method, the rater does not evaluate employee performance. [...]
[...] The third step in the measurement of performance is to determine what actual performance is; it is necessary to acquire information about it. The fourth step is the comparison of actual performance with standards. Attempts are made to assess that there are no deviations between standard performance and actual performance. The final step is the initiation of corrective action wherever necessary. THE EVALUATION PROCESS METHODS OF PERFORMANCE APPRAISAL Traditional Methods Modern Methods 1. Straight ranking method 1. Assessment Center 2. [...]
[...] USES OF PERFORMANCE APPRAISAL: Performance appraisal system can be put to several uses covering the entire spectrum of Personnel, Human Resource functions in an organization. The illustrative list of uses of performance appraisal to promote a variety of management objectives includes: Systematic efforts to tone up performance based on performance results, appropriate feedback and corrective actions. Input for an array of personnel decisions such as placements, transfers, promotions and rewards. o To identify individual with high Potential. o To develop career and succession planning. [...]
[...] It may also be done by ranking a person on his job performance as number one or two or three in total group. In practice, it is very difficult to compare a single individual with the human being having varying behavior traits. It tells us how a man stands in relation to the others in the group but does not indicate how much better or worse he is than the other. The task of ranking individuals is difficult when a large number of persons are rated. [...]
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