Performance appraisals can serve multiple purposes in an organization. In this lesson, you'll learn how they can be used as an administrative tool and as a developmental tool. You'll also have a chance to take a short quiz after the lesson.
Meet Alice. She's a human resource specialist that works for a large tech company in California. She specializes in performance management. One of her most important tools is the performance appraisal, which is a formal process of reviewing and assessing the performance of individual employees and teams concerning their effectiveness and productivity. A performance appraisal is a tool that can be used for different purposes. Let's take a look at how Alice can use it.
Alice can use the data gathered during performance appraisals in many of the administrative functions of the human resources department. Let's look at some common administrative uses of performance appraisals.
Alice can use performance appraisals to make important employment actions. Performance appraisals help identify strong and weak performers and thereby assist in making decisions regarding promotions, transfers, raises, bonuses and other types of employee rewards. Of course, they can also help determine who gets laid off and who may get terminated from employment.
The data collected from the appraisals can be used to evaluate the effectiveness of the company's training and development programs. Alice can compare appraisals of employees taken before and after completion of development programs to see if there is marked improvement.
Personnel planning also benefits from the data collected from performance appraisals. Alice can review the appraisals to determine the strengths and weaknesses of the company's current complement of workers that will help her determine whether the company needs additional workers or workers with different skills. Review of performance appraisals can also help confirm that the company's method of selecting employees is working well when it's time to add to the workforce.
Finally, performance appraisals can be used to help document decisions that may lead to lawsuits. For example, a well-documented personnel file, including a sound performance appraisal, will help the company defeat claims of discrimination arising out of the termination of an employee who was not meeting performance standards.
Alice will also use performance appraisals for individual employee development. Let's take a quick look at how Alice can use it for this purpose with an employee named Ben.
The performance appraisal provides a mechanism for Ben to receive feedback. The results will tell Ben his strengths and will recognize his individual successes. It will also tell him where he needs to improve.
Of course, good feedback is a two-way street. The performance appraisal process should offer the opportunity for employee feedback. Ben can provide feedback to Alice regarding his concerns about performance, including any deficiencies in resources necessary to meet performance goals.
The appraisal can be used to identify goals for employees and also help with evaluation of goal achievement. For example, Alice can look at Ben's previous appraisal where performance goals were set and determine whether the goals were achieved during the past period reviewed. New goals may be set or old goals adjusted during the current appraisal.
The process can be used to determine individual and organizational training and development needs. For example, Ben's personal performance appraisal may indicate performance deficiencies that some training would quickly remedy, such as becoming more proficient with new software programs. Alice can also look at performance appraisals as a group and see if there are any patterns that emerge that call for organizational changes in development.
The idea is to recognize that the performance appraisal process is not just about assessing an employee's past performance but also about helping an employee improve in the future.
Let's review what we've learned. 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. It also provides a paper trail that helps protect against meritless lawsuits. From a developmental standpoint, the performance appraisal process provides a mechanism for communication and feedback, assists in goal setting and evaluation and helps determine individual and organizational developmental needs.
After reviewing this lesson, you'll have the ability to:
- Define performance appraisal
- Explain how performance appraisals can be used for both administrative and developmental purposes