A performance appraisal (PA), also referred to
as a performance review, performance
evaluation,(career) development discussion ,
or employee appraisal[ is a method by which
the job performance of an employee is
documented and evaluated. Performance
appraisals are a part of career development and
consist of regular reviews of employee
performance within organizations.
Facilitating Promotion Decisions
Encouraging Performance Improvement.
Motivating Superior Performance
Setting and Measuring Goals.
Counseling Poor Performers
Encouraging Coaching and Mentoring.
Improving Overall Organizational Performance.
Determining Organizational Training and
Training Needed ,etc
4. Psychology Appraisal
Appraisal theory is the
theory in psychology
that emotions are
extracted from our
or estimates) of events
that cause specific
reactions in different
people. Essentially, our
appraisal of a situation
causes an emotional,
or affective, response
that is going to be
based on that
5. Advantages of Performance
It is said that performance appraisal is an investment for the company which can
be justified by following advantages:
Promotion: Performance Appraisal helps the supervisors to chalk out the
promotion programmes for efficient employees. In this regards, inefficient
workers can be dismissed or demoted in case.
Compensation: Performance Appraisal helps in chalking out compensation
packages for employees. Merit rating is possible through performance appraisal.
Performance Appraisal tries to give worth to a performance. Compensation
packages which includes bonus, high salary rates, extra benefits, allowances and
pre-requisites are dependent on performance appraisal. The criteria should be
merit rather than seniority.
Employees Development: The systematic procedure of performance appraisal
helps the supervisors to frame training policies and programmes. It helps to
analyse strengths and weaknesses of employees so that new jobs can be
designed for efficient employees. It also helps in framing future development
Selection Validation: Performance Appraisal helps the supervisors to understand
the validity and importance of the selection procedure. The supervisors come to
know the validity and thereby the strengths and weaknesses of selection
procedure. Future changes in selection methods can be made in this regard.
6. Advantages (conti…)
+Communication: For an organization, effective
communication between employees and
employers is very important. Through
performance appraisal, communication can be
sought for in the following ways:
+Through performance appraisal, the employers
can understand and accept skills of
+The subordinates can also understand and
create a trust and confidence in superiors.
+It also helps in maintaining cordial and
congenial labour management relationship.
+It develops the spirit of work and boosts the
morale of employees.
+All the above factors ensure effective
+Motivation: Performance appraisal serves as a
motivation tool. Through evaluating performance
of employees, a person’s efficiency can be
determined if the targets are achieved. This very
well motivates a person for better job and helps
Promotion is vertical
movement of an
employee within the
organisation. In other
words, promotion refers
to the upward
movement of an
employee from one job
to another higher one,
with increase in salary,
Promotion may be
8. Types of Promotion:
1. Horizontal promotion:
When an employee is shifted in the same category, it is called
‘horizontal promotion’. A junior clerk promoted to senior clerk is such an
example. It is important to note that such promotion may take place
when an employee shifts within the same department, from one
department to other or from one plant to another plant.
2. Vertical Promotion:
This is the kind of promotion when an employee is promoted from a
lower category to lower category involving increase in salary, status,
authority and responsibility. Generally, promotion means ‘vertical
3. Dry Promotion:
When promotion is made without increase in salary, it is called ‘dry
promotion’. For example, a lower level manager is promoted to senior
level manager without increase in salary or pay. Such promotion is
made either there is resource/fund crunch in the organisation or some
employees hanker more for status or authority than money.
1. To recognize an employee’s skill and knowledge and utilize it
to improve the organisational effectiveness.
2. To reward and motivate employees to higher productivity.
3. To develop competitive spirit and inculcate the zeal in the
employees to acquire skill, knowledge etc.
4. To promote employees satisfaction and boost their morale.
5. To build loyalty among the employees toward organisation.
6. To promote good human relations.
7. To increase sense of belongingness
8. To retain skilled and talented people.
9. To attract trained, competent and hard working people.
10. To impress the other employees that opportunities are
available to them too if they also perform well.