Performance appraisal refers to a formal system which determines the employee’s performance quality. Appraisal is an important process in an extensive performance management system which connects organizational objectives, professional development, daily performance and incentives and rewards. Performance appraisal might be understood as the individual’s performance assessment in a systematic manner, with performance being assessed against factors that include quantity and quality of output, job knowledge, health, initiative, versatility, leadership abilities, judgment, supervision, cooperation, and dependability. Performance assessment should not be limited to past performance alone but also to the assessment result of possible future performance of the employee (Khan, 2013). This paper evaluates importance of performance appraisal and comparing and contrasting two different method of performance appraisal.
Importance of Performance Appraisal Systems
The primary appraisal system goal is to enhance organizational and individual performance. Performance appraisal plays a great role in determining individual workers abilities, strengths and weaknesses. This enables the organization and individuals to identify things that an employee needs to improve on and to strategize on how this improvement can be enhanced. Performance appraisal system thus assist the organization in planning organizational group training and workshops based on the area with high level of poor performance and personal development based on individual weaknesses (Semantic Scholar, n.d.). It also acts as a motivational tool in which those demonstrating high performance consistently get rewarded either by incentives, promotion or salary addition.
Performance appraisal can also be used to determine the effectiveness of the organization’s recruitment program. Individual workers performance can be used to determine if the recruitment program brought the right workers or not and hence guiding on the aspects to change in. Appraisal also helps in guiding personal career development and in promoting differentiation practice in an organization. This guides human resource department in work allocation and defining assignments to workers. Thus, this process is highly beneficial to any organization that focuses on growing (Ayomikun, 2017).
Central Tendency And Recency Effect in Performance Appraisal Systems
Performance appraisal can help a company achieve success and meets its strategic goals (Taticchi, 2010, p. 195). The recency effect occurs when the supervisor refuses to consider earlier results of the evaluation period and concentrate on the recent results only to gauge the employee’s performance. The central tendency as an error occurs because of the refusal by the supervisor to use extreme comments on the results of evaluation regarding employees and thus putting all of them in the middle. Such errors may favor or negatively affect the appraisals of various employees and therefore is important to ensure that there is a correct rating process without bias.
Removing bias from performance appraisal especially in ensuring that the supervisors carry out their work without errors is quite important. The difficult in proper rating of employees is that of subjectively since the company cannot set goals for each employee in the company and appraise them, as it would be time consuming (Wilkinson & Johnstone, 2016, p. 323). Supervisors and managers should be educated on the common errors to ensure that they avoid them when rating their subordinates. Dealing with the recency effects needs careful collection of information in the evaluation process of an employee. Managers should avoid rating best employees more favorably than others should. Each person should be rated equally and according to his performance. The managers should further focus on the extremes of the performance of the employees especially about the central tendency error. It will help the company to get results that are more concise and focus on which employees need training or more supervision in improving on their work.
Performance appraisal should be done in a manner that does not victimize employees but has the goal of improving the performance of the employee being evaluated (Wilton, 2016, p. 149). Promotions should be explained to the employees especially where appraisals are done to evaluate performance and eventually lead to a promotion of the individuals. As such, employees will be more committed as the process is carried out with transparency and with the sole aim of benefiting; the employees in helping them improve their performance and reaching a higher position in the company.