A sound appraisal system should comply with the following:
The system should be both valid and reliable. The validity of ratings is the degree to which they are truly indicative of the intrinsic merit of employees.
The reliability of ratings is the consistency with which the ratings are made, either by different raters, or by one rater at different times.
Both validity and reliability result from objective database. Appraisal system should provide consistent, reliable and valid information and data, which can be used to defend the organisation – even in legal challenges.
The evaluators should focus attention on job-related behaviour and performance of employees.
In order to focus attention on behaviour under the employee’s control, raters must become familiar with the observed behaviour.
It is also necessary to prepare a checklist so as to obtain and review job performance related information.
Ratings should be tied up with actual performance of units under the rater’s control. The information generated through evaluations should be tailored to the needs of the organisation, performance requirements and norms of behaviour.
Multiple criteria should be used for appraisal and appraisal should be done periodically rather than once a year.
Well-defined performance factors and criteria should be developed. Appraisal forms, procedures, administration of techniques, ratings etc., should be standardised as appraisal decisions affect all employees of the group.
It will help to ensure uniformity and comparison of ratings. The appraisal techniques should measure what they are supposed to measure. They should also be easy to administer and economical to use.
The techniques should be practically viable to administer, possible to implement and economical to undertake continuously.
They must have the support of all line people who administer them. If the line people think it is too theoretical, too ambitious, too unrealistic, or that ivory-tower staff consultants who have no comprehension of the demands on time of the line operators have foisted it on them, they will resent it.
The evaluators or appraiser should be provided adequate training in evaluating the performance of the employees without any bias. Evaluators should also be given training in philosophy and techniques of appraisal.
They should be provided with knowledge and skills in documenting appraisals, conducting post appraisal interviews, rating errors etc.
Familiarity with rating errors can improve rater’s performance and this may inject the needed confidence in appraisers to look into performance ratings more objectively.
The system should be open and participative. Not only should it provide feedback to the employees on their performance, it should also involve them in the goal setting process. This helps in planning performance better.
The employees should actively participate in managing performance and in the ongoing process of evaluation.
The superior should play the role of coach and counselor. The overall purpose of appraisals should be developmental rather than judgmental.
Employees should receive adequate feedback on their performance. If performance appraisals were meant for improving employee performance, then withholding appraisal result would not serve any purpose.
If the result of appraisal is negative and goes against the employee, it should be immediately communicated to him so that he may improve his performance or he may go in appeal before the appropriate authority in case he is not satisfied.
Such provisions should be made. This will enable the management to gain the confidence of the employees.
The appraisal system should be objective oriented. It should fulfill the desired objectives like determining the potential for higher jobs or for sanction of annual increment in the salary or for granting promotion or for transfer or to know the requirements for training. The objectives should be relevant, timely and open.
The appraisal system should be fair so that it is beneficial to both the individual employee and the organisation.
The system should be adequately and appropriately linked with other sub-systems of human resource management.
After appraisal, an interview with the employee should be arranged. It is necessary to supply feedback, to know the difficulties under which the employees work and to identify their training needs.
The appraiser should adopt a problem solving approach in the interview and should provide counseling for improving performance.
The system should be periodically evaluated to be sure that it is continuing to meet its goals.
Not only there is the danger that subjective criteria may become more salient than the objective standards originally established, there is the further danger that the system may become rigid in a tangle of rules and procedures, many of which are no longer useful.
It should be noted by the executives at the helm of affairs of the organisations that the aim of performance appraisal or any system for that matter is to improve performance, organisational effectiveness and to accomplish organisational objectives and not to harass the employees and workers of the organisation who are the vital human resources without whose help nothing can be achieved.