Performance appraisal is planned,developed and implemented through a series of steps
Establish Performance Standards with Employees
The appraisal process begins with establishment of performance standards in accordance with the organization’s strategic goals. These should evolve out of the company’s strategic direction-and,more specifically,the job analysis and the job description. These performance standards should also be clear and objective enough to the understood and measured.
Mutually set measurable Goals
Once performance standards are established, it is necessary to communicate these expectations; employees should not have guess what is expected of them. Too many jobs have vague performance standards, and the problem is compounded when these standards are set in isolated and without employee input. Communication is a two way street-mere information transfer from supervisor to employee is not communication.
Measure Actual Performance
The third step in the appraisal process is performance measurement. To determine what actual performance is, we need information about it. We should be concerned with how we measure and what we measure.
Four common source of information frequently used by managers address how to measure actual performance-personal observation,statistical reports,oral reports, and written reports. Each has its strengths and weaknesses;however,a combination of them increases both the number of input sources and the probability of receiving reliable information. What we measure is probably more critical to the evaluation process than how we measure. Selecting the wrong criteria can produce serious,dysfunctional consequences. And what we measure determines, to a great extent,what people in the organization will attempt to excel at. The criteria we measure must represent performance as it was mutually set in the first two steps of the appraisal process.
Compare Actual Performance with Standards
The fourth step in the appraisal process is the comparison of actual performance with standards. This step notes deviations between standard performance and actual performance so that we can proceed to the next step.
Discuss the Appraisal with the Employee
This step involves discussion of the appraisal with the employee. One of the most challenging tasks facing appraisers is to present an accurate assessment to the employee. Appraising performance may touch on one of the most emotionally charged activities-evaluation of another individual’s contribution and ability. The impression that employees receive about their assessment has a strong impact on their self-esteem and,importantly. on their subsequent performance.
If Necessary,Initiate Corrective Action
The final step in the appraisal is the identification of corrective action where necessary. Corrective action can be of two types- One is immediate and deal predominantly with symptoms,and the other is basic and delves into causes. Immediate corrective action is often described as “putting out fires”, Whereas basic corrective action touches the source of deviation and seeks to adjust the difference permanently.