The process of performance appraisal follows a set pattern i.e. an employee’s performance is periodically appraised by his superiors. The following are the main steps of an appraisal programme:
Step 1: Establish performance standards
At the time of designing a job and formulating a job description, performance standards are usually developed for a position. These standards should be clear, and objective enough to be understood and measured. Weights and points are to be given to each factor of these standards and should be indicated on the appraisal form. These are used for appraising the performance of employees
Step 2: Communicate performance expectations to employees
It is difficult for employees to guess what is expected of them, hence the standards of performance should be communicated to the employees. To make communications effective, ‘feedback’ is necessary from the subordinates to the manager. Satisfactory feedback ensures that the information communicated by the manager has been received and understood in the way as it was intended.
Step 3: Determine what performance is
To determine what actual performance is, it is necessary to acquire information about it. We should be concerned with how we measure and what we measure. Four sources of information are frequently used to measure performance: personal observation, statistical reports, oral reports and written reports.
Step 4: Compare actual performance with standards
The employee’s appraisal is done and s/he judged in terms of potential for growth and advancement. Attempts are made to note the deveiations between standard performance and actual performance.
Step 5: Discuss the appraisal with the employee
The results of the appraisal are discussed periodically with the employees where strong points, weak points, and difficulties are indicated and discussed so that performance is improved. The information that the subordinate receives about his/her assessment has a great impact on his subsequent performance. Conveying good news is easy both for the manager and subordinate but it is considerably difficult when performance has been below expectation.
Step 6: Initiate corrective action, if necessary
Corrective action can be of two types. One is immediate and deals mainly with symptoms. The other is basic and looks deep into the causes. Immediate corrective action is often described as “putting out fires”, whereas basic corrective action gets to the source of deviation and seeks to adjust the difference permanently. Counseling may be done or special assignments may be set. People may be sent for formal training courses, and decision-making responsibility and authority may be delegated to the subordinates. Attempts may also be made to recommend for salary increase or promotion, if it is required in light of the appraisals.