Strengths and Weaknesses of Performance Appraisal

Performance appraisal is a method by which the job performance of an employee is judged and evaluated, by his or her superior or manager. A performance appraisal in most organizations today, is conducted once or twice a year. Different organizations employ different performance appraisal methods such as the "Management by Objectives", in which comparison between certain standards and goals which are set for an employee, are made with the employee's actual performance or the "360 Degree", in which an employee is appraised by everybody, right from his superior to his subordinates, peers and even outside parties like suppliers and customers.

Despite the various techniques employed by different organizations for appraising employee performance, and the advantages that an appraisal process has, both for the employee and the organization, the concept of performance appraisal has earned a lot of criticism from various corporate and social experts.

Before knowing the strengths and weaknesses of an evaluation process, it is essential to understand why they are conducted in the first place. The basic aim of all performance appraisals is to judge, whether the employee has the skills and qualities, required to do his job in an effective manner. This evaluation is done by the superiors, on the basis of some pre-decided criteria. If performance evaluation is done correctly, it can help motivate an employee and increase his productivity. Let us study both the sides of the coin by knowing about the strengths and weaknesses of performance evaluation.

Strengths of Performance Appraisal

☝ Performance appraisal helps to evaluate the actual performance of employees against the expected performance. It recognizes and rewards potential employees and motivates them to excel further. It provides a basis for determining the salary hikes, perks, promotions and bonuses of various employees based on merit.

☝ An appraisal process can provide a basis for improving the performance of employees. It helps to identify the training and development needs for employees who do not meet the set standards. This boosts the morale of employees and increases the productivity of the organization.

☝ Through performance evaluation the supervisors can identify the strengths, weaknesses, job knowledge, skills and commitment of an employee. An employee comes to know about his key work areas and also the areas he needs improvement and has to work upon. He also gets a better understanding of the organization's needs and expectations.

☝ A noteworthy strength of performance appraisal is, it helps to recognize the goals and objectives of an employee. Sometimes, through the appraisal, the managers may tap the interests, skills and proficiencies of an employee that may be suitable for some other job in the organization. This helps to ensure that an employee is being utilized effectively. Identifying people with right skills helps an organization achieve its mission and objectives and contributes to an employee's overall growth as well.

☝ The performance appraisal process is a viable tool for establishing and maintaining an open communication between supervisors and employees, and enhances employee commitment and productivity.

Weaknesses of Performance Appraisal

☟ On the downside, appraisals have been criticized on a lot of grounds. One of the arguments against performance appraisals is that they get affected by office politics.

☟ The superior or the manager, may not assess his subordinates fairly. Instead of basing his evaluation on the employee's actual behavior, the manager might give his feedback on the basis of his personal likings and disliking.

☟ Another criticism that performance appraisals face is that they are unable to fulfill the aim they are conducted for in the first place. Since, in an appraisal, an employee is being evaluated and judged, and his pay rise and promotion is dependent on it, there is no way he will bring out the problem areas in his work, when doing self-assessment.

☟ In some cases a superior too might find it uncomfortable to judge his subordinates, since they are working together on a daily basis in the organization. Sometimes, performance appraisal can cause souring of relationships in the office, leading to an unproductive work environment.

Many management experts who are against employee performance appraisals, argue that appraisals and incentives should be kept separate. Appraisals should be only about the training needs, performance and career development of an employee, and that there should be separate salary reviews done periodically to decide the incentives for the employees. However, research in this field has shown that if the reward review is a separate process from the appraisal system, it may create dissatisfaction among the employees. Thus, looking at the strengths and weaknesses of annual performance evaluation and the research findings, it can be concluded, that though there are advantages and disadvantages of conducting an appraisal, it is a necessary employee motivation tool without which organizations cannot function properly.