What is Performance Appraisal?

Performance management, Performance review or performance appraisal as used by different establishments are all talking about the same thing, it has to do with aligning the human resources with the corporate goals of the firm, evaluate their performances and recommend commensurate rewards. It involves skill planning, skill development, and maintaining a good pay for performance culture in an organization.

Over the years, effective performance management has been proven to improve employee loyalty, morale and general productivity. Due mainly to the highly competitive business environment today, there is the need for firms to boost the morale and loyalty of their employees in order to stand the heat of competition. Because of the high cost of selection, recruitment, training and developing new employees, it is imperative for firms to motivate and retain their high performing employees. What am I saying in essence as a Human resources expert, you are to have in place a good performance management system in your firm to help motivate and retain top performers, align individual performances with corporate goals thereby creating a more involved workforce, which will lead to greater productivity. A very good Performance management system must include employee and management participation for it to be non biased and fair.

There are different steps involved in performance management or appraisal depending on the type of firm or size. These steps may not be followed rigidly, but they will assist in having a good review result. The following steps will act as a guide to a good performance management;

• Define different jobs. Each job or duty should have a name. The department each duty reports to should be established and known.


• Define Job Duties. There should be clearly defined duties and responsibilities for each defined job. It should be done in a clear manner to avoid clash and interference between different jobs.


• Define Performance Goals: Performance goals should be defined with measurable outcomes.


• Define Priority for each job goal and responsibility. The main priority for each job goal should be clearly stated for easy assessment and measurement of result/outcome.


• Define performance standard: For each key component of the job, a performance standard should be defined to know when a staff has performed below or above the given standard.


• Keep Record of all staff performances before during and after every appraisal exercise. It is always good to have records kept for each staff in his file. Discussions with staff supervisors and with staff should be noted even when appraisal exercise is not on. It sure will be of help during any appraisal exercise.


• The Appraisal form should be elaborate: The form should have columns for the appraiser and a part for appraisee’s agreement or disagreement with the appraisers comments about him as well as the appriasee’s comments (Self Assessment).


• You May Provide a feedback column: This column will be used to get feedback from employee’s peers, customers or subordinates if need be.


• Very Important to have a training need column in the form: A very important aspect of an appraisal is to find out how an employee is performing in his present responsibility and if not why he is not performing as well as training needs that may be used to improve performance.

Reasons For Performance Appraisal in a Firm:

Apart from the general reason of increasing the morale, motivation, involvement and productivity of staff, there are other streamlined reasons why firms carry out performance appraisal exercises. These reasons include;

• To provide feedback on individual performance in a given period: Firms employ because of the need they want met. During appraisals, firms find out if employees are adding value to the firm or not.


• To plan for future Promotion: As a reward for performance, employees are promoted and given greater responsibilities and authorities. Performance appraisal or review is needed to know staff who are due for promotion.


• As a succession Planning tool: Dynamic and future oriented firms plan for tomorrow leaders today by planning how to hand over power, authority, and running of the firm in advance. Perfomance appraisal exercise showcases employees who are future leaders.


• To assess Training and Development needs of employees: A good performance appraisal exercise reveals training needs of employees.


• Provides Information for salary planning: After appraisal, some staff are promoted to the next level, which attracts salary and allowances increment. Also some staff who are not promoted are rewarded with gifts or salary increment too. This assists in planning for staff salaries.


• Career Planning: Career planning is a corporate organizational issue. After appraisals, it is always found out that most employees are working in departments they have little or no flair for. This generally affects their individual as well as general corporate performance. Performance appraisal results help in planning and repositioning employees career.

It should be noted that performance appraisal is a very important aspect of organization future growth and positioning as such it should be carried out with all seriousness and sincerity. The Human resources person should be able to advice all supervisors and managers before every appraisal exercise to avoid getting a biased result, which will ultimately affect the general productivity of the firm. Supervisor /Managers should avoid elements of favoritism or emotions during appraisals. Most Managers use appraisal exercise as a time to get back at subordinates. This is a wrong approach to appraisal. Appraisal exercises should be fair and without bias. Before a manager can appraise his subordinate, he should be able to know the employee very well, the company goals, the products /services they are handling, their customers, other colleagues, the target given to the staff etc before a fair and non biased judgment can be given.

Finally for any Performance appraisal exercise to be successful and without prejudice, the Goals set must be “SMART”. This means that the goals must be Specific, Measurable, Attainable, Realistic and with a Time Frame. Individual goals must be aligned with corporate organizational goals. Employee self-evaluation/assessment must be included in the assessment form. The Supervisor and subordinate must be allowed to participate in the review. The ratings must be clearly stated with reasons for each rating. There must be a final column for the Human Resources personnel to evaluate the review and make a final recommendation for Managements approval.