Randall S. Schuler | Performance Appraisal : Best Meaning, Definition

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What is Performance?

Employees perform better when they are more productive. Productivity implies a concern for effectiveness as well as efficiency, and effectiveness is related to achieving goals. However, no mention is made of the costs required to reach the goal.

What is Appraisal?

Appraisals are judgements of the qualities, traits, and performance of others. We assess the worth or value of others based on these judgments and determine what is good or bad. Performance appraisal is a systematic evaluation of employees by supervisors in the workplace. Employees want to know where they stand in the organisation.

Performance appraisal is an essential tool for any organization where the performance of employees, their Development, and recognition are important. The most important aspect of this appraisal is that it assists employees in achieving their best results.


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Performance appraisal is a process to assess the effectiveness of an employee’s job performance. It helps to improve HR Management, helps employees increase their Motivation, and develops their potential for future work.


“Performance appraisal is a formal, structured system of measuring and evaluating an employee’s job, related behavior and outcomes to discover how and why the employee is perfuming on the job and how the employee can perform more in the future so that the employee, organization, and society all benefit.”

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Performance assessment refers to analyzing an employee’s present and past performance about his or her performance standards. 

Types of Performance Appraisal

The four major types of performance appraisal are as follows:

  • Self-evaluation: This is where the employee rates their job performance and work behavior.
  • Peer appraisal: In this appraisal, team members, colleagues, and the workgroup are responsible for the employee’s performance rating.
  • 360-degree performance appraisal: This type of appraisal collects performance ratings from the employee, their immediate supervisor, and peers.
  • Negotiated appraisal: A new appraisal tendency used to avoid conflicts between employees and their supervisors. In this type of performance appraisal, a mediator evaluates the worker’s performance and focuses on the positive aspects of performance rather than the negative.

    The Essence of Performance Appraisal 

    When reduced to its essence, performance appraisal always involves:

    • (1) Establishing work standards, 
    • (2) Evaluating essential performance about those standards,
    • (3) Providing feedback to the employee to motivate him or her to end performance lacks or continue to perform above par.

    A formal measure or rating of a worker’s job performance, when compared to based job standards, is called performance appraisal. It allows for feedback and the development of future growth strategies. 

    Process of Performance Analysis

    • Establish performance standards
      The first step in the performance review process is to set standards by which to compare actual employee performance.
      This step requires the facility of measures by which to consider whether the employee’s moves are successful and to what scope they contribute to the goals and objectives of the organization.
      It is not possible to measure employee performance, extreme care should be taken when describing standards.
    • Communicating the standards
      Once established, management handles communicating the standards to all employees in the organization. Employees must be informed and standards must be explained to employees. This will help them understand their role and know exactly what is expected of them.
    • Measuring actual performance
      This is an ongoing process that includes performance monitoring throughout the year. This step requires careful selection of appropriate measurement techniques, ensuring that personal biases do not affect the outcome of the process, and providing support rather than interference in the work of the individual.
    • Comparison of actual performance with desired performance
      Actual performance is compared with desired or benchmark performance. Comparisons reveal employee performance deviations from established standards. Results may show actual performance being higher than wanted performance or actual performance being lower than wanted performance, representing a negative gap in organisational performance. This includes the collection, evaluation, and analysis of data related to employee performance.
    • Discussion of Results 
      Results, problems, and possible solutions are discussed to solve problems and reach a consensus. Feedback should be given with a positive attitude, as it can affect an employee’s future performance. Performance review feedback from a manager should be helpful in some way to fixing employees’ mistakes and helping to motivate them to reach better performance, but without getting them down. Performance feedback tasks need to be with care of as they can lead to emotional outbursts if not done. Sometimes employees need to prepare before giving feedback as it can receive or depends on the nature and attitude of the employee. it is the comment process.

    Importance of Performance Appraisal 

    Performance evaluation is an important part of any organization’s Human Resource Management :

    • 1. Provides feedback on the effectiveness of previous training and identify the need for extra training.
    • 2. Assists in the development of improvement plans based on agreed-upon goals, strengths, and  weaknesses
    • 3. Identifies opportunities for growth
    • 4. Documents present job performance to managers in order for them to make a salary, Promotion, demotion, transfer, and termination decisions.
    • 5. It allows for formal feedback.

    The example offered is only to help you better grasp the idea of performance assessment. It is not advisable to create an exact duplicate of the performance appraisal system and evaluation.

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    Omit Efficiency:

    82% rating

    a) Employee is a conscientious and dependable worker. He or she is accessible to team members. 

    b) The employee is organized and efficient. 

    c) Employee makes an attempt to educate themselves about changing markets and technologies. 

    d) While working on a project, an employee gives help, insights, guidance, and ideas to a team member.

    Goals attained:

    70% rating

    Comments: The employee worked hard to achieve the goal. Because the goal is pushed higher, achieving 70% is a remarkable performance.

    Traditional and Modern Techniques of Performance Appraisal

    Performance appraisal is a crucial process for organizations to evaluate employee productivity, review progress, and reward high-achieving workers. 

    It is a determining factor in an employee’s wage rise and promotion, as well as an evaluation of their skills, strengths, and shortcomings.

    Traditional Techniques

     Ranking Method

    The ranking method is the oldest and simplest formal systematic method of performance appraisal. Employees are ranked from the higher to the lower, or from the best to the worst. 

    However, this method has several limitations:

    • It does not indicate how much better or worse one employee is compared to another.
    • It is difficult to rank individuals when a large number of employees are rated.
    • Comparing individuals with varying behavioral traits is challenging.

     Essay Method

    The essay method is the simplest among various appraisal methods. The rater writes a narrative description of an employee’s strengths, weaknesses, past performance, potential, and suggestions for improvement. However, this method has drawbacks:

    In the absence of a prescribed structure, essays can vary widely in length and content.

    The quality of appraisal depends more on the rater’s writing skills than the appraiser’s performance level.

    The method provides only qualitative information about the employee, leading to subjectivity.

     Modern Techniques

     Psychological Appraisals

    Psychological appraisals focus on analyzing an employee’s future performance rather than their past work. These appraisals evaluate various components of performance, such as interpersonal skills, cognitive abilities, intellectual traits, leadership skills, personality traits, emotional quotient, and other related skills. However, this method has some drawbacks:

    • It is a slow and complex process.
    • The quality of results is highly dependent on the psychologist who administers the procedure.
    • Absence of proper training, lack of trained professionals, and nervousness or anxiety of candidates can skew results.

     360-Degree Appraisal

    360-degree appraisal is a feedback-based method where performance information is collected from an employee’s supervisors, subordinates, peers, and customers. 

    This method is generally used for ascertaining training and development requirements, rather than for pay increases. However, it also has some limitations:

    • It is subject to subjectivity on the part of the appraiser.
    • Supervisors may penalize the employee by providing negative feedback, while peers may give a rave review influenced by ‘give and take feeling’.


    Choosing the right performance appraisal method is critical, as it reflects an organization’s view of its employees and the importance of employee morale. Both traditional and modern techniques have their pros and cons, and organizations should select the method that best suits their specific needs. 

    Once an ideal performance review method is found, proper implementation is essential to address critical performance gaps and pressing issues that impact ROI.


    Every organization has its own performance appraisal system. In each organization, the frequency with which a person checks and how the person appraises differ. Once or twice a year, a company may need a manager to rate an employee.

    Companies have different methods for evaluating employees. A company’s appraisal system can sometimes be either subjective or goal. A subjective performance appraisal system is based on the manager’s personal perspective. The specific performance areas for the employee, as well as the need, are identified in a goal performance appraisal system.

    Sources :-
    What is performance management definition, types, purpose … – hrhelpboard.com. Available at: https://www.hrhelpboard.com/performance-management.htm (Accessed: November 9, 2022). 

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