Essential Components of Effective Performance Appraisal (Essay Sample)

Organizations' and businesses' performance depends on three essential resource factors; financial, physical, and people. However, there is no doubt that people have the most prominent role in an organization or a business as a resource. All factors that enable an organization to grow depend on the people within the organization to implement strategies, processes, and plans to make the business fruitful. These resources include the Human Resource (HR) management department, which significantly gives other employees direction. The department performs several roles, including enhancing the performance of employees to accomplish the organization's objectives. To track employee performance, the department prepares a performance appraisal at the end of an agreed period, usually at the end of the year.
A performance appraisal is a periodical investigation of an individual's productivity and overall input to the business or organization. Also referred to as yearly assessment, it analyses the productivity, assesses the employee, and evaluates the staff's abilities, successes, and overall progress. It is part of HR and management as the process analyses staff's output with the organization's efficiency. Performance appraisal provides an undeviating platform to select promotions, evaluate financial rewards or select vital projects for each employee.
Essential Components of Effective Performance Appraisal
According to various scholars, there are several components of performance appraisal available. However, some of the essential elements are:
Performance Based Compensation:
Most employees have a similar mindset; hence, compensation or reward is a classical method of appraising the performance level as it may work perfectly to appraise their performance standards. Developing an effective performance appraisal requires collaborative work to determine salary increase allocations, inducements, and other monetary rewards.
Performance Training:
The role of the HR manager and the management team is to ensure that the employees get the proper training to sustain the standard performance levels. However, it is imperative to train employees who do not conduct their duties according to the set standards as this may appraise their performance and enhance morale. Also, leadership training improves how employees see performance ratings. Furthermore, exercise helps managers and supervisors comprehend essential practices, policies, and methods for providing employees with a positive response.
Standard of the Performance:
Performance Standards:
Establishing performance standards is also a vital component of effective performance appraisal. Varma et al. (2019) argue that the organization must set an achievable specific performance standard so that the employees can quickly comprehend their positions by self-evaluating and achieving a higher standard.
Performance Appraisal's Contribution to the Organizational goals and objectives
In any organization setup, employees make the human asset. However, as their energy or motivation level may drop, they do not depreciate. In such scenarios, performance appraisal is vital in enabling the organization to evaluate employee performance and productivity. In addition, it helps in boosting the motivation level to improve productivity.
On the other hand, performance appraisal enables employees to improve their skill level and alter their mentality positively regarding the business or organization. Through this, they feel that the organization cares about their well-being. They feel the presence of authority, boosting their effectiveness, resulting in both individual and organizational achievement.
Advantages of Performance Appraisal
Performance appraisal has some of the following advantages:
Self-Development:
Self-development is a significant advantage for any professional. In an organization or a business, performance appraisal offers valuable criticism to the employees, enabling them to discover growth opportunities (Elfakhery, 2020). For example, an employee may talk with the management and design a growth schedule to improve his capabilities.
Structure:
Performance appraisal builds a system that allows management to contact the employee. Hence, it pu