Performance Appraisal

Performance Appraisals

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Ashford University

BUS 303: Human Resources Management

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Performance Appraisal

Performance appraisal is the assessment of an individual’s performance in a systematic way. It encompasses a special form of evaluation involving a comparison of the observed performance of an employee with a performance standard which describes what the employee is expected to do in terms of behaviors and results (Baker, 1988). Identifying common goals between the employer and the employee and how these goals must relate to the overall organizational goals for increase in productivity and output is a major aspect of the whole process.

The appraisal process is a process of increasing employee performance, in so many ways.

Increasing Employee Performance

Performance appraisal has over the years been used as a basis on which salary increments are administered, transfers and promotions, and when necessary, terminations and demotions are done (McGregor 1957). Rewards and recognition which are based on job performance lead both to job satisfaction and improved performance. In this regard, employees will work harder to be on the right standing with the rater.

Also, (McGregor 1957) noted that the whole process is as well a means of showing an employee how they are doing, and if need be, suggesting needed changes in how they operate and their skills or knowledge of their job. This will determine the training needs of an employee, so as to increase the effectiveness of an employee which includes ability and an employee’s acquaintance to their specific job.

Strategic Advantages and Achieving Strategic Objectives

Over the years, studies have indicated that organizations that conduct performance appraisal, experience reduced staff turnover (Zweig, 1991). This is because it offers formal communication mechanisms within the employer and the employee in the organization. Communication has been proven to reduce the rate of employee turnover since the employer has the opportunity to communicate his expectations and the employee can communicate his feeling towards the employer. The fact that appraisal recognizes the employees for their hard work and efforts proves that the process is inherently a motivator.

Comparing employee performance to the performance appraisal helps underperforming employees to worker harder for better ratings in future. This goes a long way in improving the performance of an employee, since he will be clear in their minds what they will want to achieve after another cycle of appraisal (Baker, 1988).

Performance appraisal offers the best opportunity to for the employers to determine training needs for the employees. Just like performance, appraisal for employees also determines and shows their abilities and talents, and based on that, the employer can choose to set up training for the employees. In the long run, the organization will have the right guys for the right jobs, thus higher chances of attaining the organizational objectives.

When it comes to job satisfaction, most of the benefits of job satisfaction come into play. An employee won’t be pressurized to work beyond his ability, since the process objectively sets goals for employees that are attainable. They will feel at peace working and knowing that they are rewarded based on their performance, and incase they don’t achieve the goals; the organization will do all it can to help them improve.

Potential Forms of Bias

The appraisal process is no in itself perfect, as there are sometimes partial judgments on an employee’s performance (Youssef 2012).

The Spillover Effect happens when an employee’s present performance is evaluated based how he/she may have performed in the past. The person who was a good performer in distant past is assured to be fine, while one performed poorly in the past may not fair crack of the whip.

Leniency: this is where a rater gives satisfactory ratings to all rates, common in cases where a rater has so many employees to evaluate, due burn out ,he might decide to give satisfactory response to all employees. Other supervisors can have the central tendency bias, where they give employees middle level grades, in complete disregard of the fact that some may be above/below that.

When an employee is rated based on a trait, quality or one thing they do so well, it’s known as the Hallo effect. It does that without a proper check of other factors that might also be deemed important. On the other hand, we have the Horn effect, where an employee is rated as a poor performer based on one thing they don’t do so well.


No organization operating in these changing times of cut-throat global competition can afford an unmotivated workforce. Performance appraisal is a tool that any company or organization can use to measure performance of its employees against the company’s long term goals and objectives. It is also important for every employee to know how much they are contributing towards attainment of such goals. This can only happen with an effective performance appraisal system.


Youssef, C. (2012). Human resource management. San Diego, CA: Bridgepoint Education

DouglasMcGregor, “An Uneasy Look at Performance,” Harvard Business Review(May-June 1 957)

Baker, J. (1988). Causes of failure in performance appraisals and supervision.

New York:. Quorum Books.

Zweig, M. (1991). Human resources management: The complete guidebook for design firms. New York: Wiley.

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