Performance appraisal

Definition: “The process of identifying, evaluating and developing the work performance of
employees to help achieve the goals and objectives of the organization.”

A performance appraisal is a regular review of an employee’s job performance and overall

contribution to a company. Also known as an “annual review,” “performance review or evaluation,” or
“employees appraisal,” a performance appraisal evaluates an employee’s skill, achievements and
growth, or lack thereof. Companies use performance appraisal to give employee’s big-picture
feedback on their work and to justify pay increases and bonuses, as well as termination decisions.
They can be conducted at any given time but tend to be annual, semi-annual or quarterly.

Performance appraisal also helps employees and their managers create a plan for employee
development through additional training and increased responsibilities, as well as to identify
shortcomings the employee could work to resolve.

Advantages of Performance Appraisal:

It is said that performance appraisal is an investment for the company which can be justified by
following advantages.

1. Promotion:
Performance appraisal helps the supervisors to chalk out the promotion programs
for efficient employees. In this regards, inefficient workers can be dismissed or demoted
in case.
2. Compensation:
Performance appraisal helps in chalking out compensation packages for
employees. Merit rating is possible through performance appraisal. Performance
appraisal tries to give worth to a performance. Compensation packages which include
bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent
on performance appraisal. The criteria should be merit rather than seniority.
3. Employees development:
The systematic procedure of performance appraisal helps the
supervisors to frame training policies and programs. It helps to analyses strength and
weaknesses of employees so that new jobs can be designed for efficient employees. It
also helps in framing future development programs.
4. Selection validation:
Performance appraisal helps the supervisors to understand the validity
and importance of the selection procedure. The supervisors come to know the validity
and there by the strengths and weaknesses of selection procedure. Future changes in
selection methods can be made in this regard.
5. Communication:
For an organization, effective communication between employees and
employers is very important. Through performance appraisal, communication can be
sought for the following ways;
 a. Through performance appraisal, the employees can understand and
accept skills of subordinates.
b. The subordinates can also understand and create a trust and confidence
in superiors.
c. It also helps in maintaining cordial and congenial labour management
relationship.
d. It develops the spirit of work and boosts the morale or employees.

All the above ensure effective communication

6. Motivation:
Performance appraisal serves as a motivation tool. Through evaluating
performance of employees, a person’s efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him to improve his
performance in the future.

Training

Definition: Training is teaching, or developing in oneself or others, any skills and knowledge or
fitness that relate to specific useful competencies. Training has specific goals of improving one’s
capability, capacity, productivity and performance.

Training Categories:

The on-the-job training method takes place in a normal working situation, using the actual tools,
equipment, documents and materials that trainees will use when fully trained. On-the-job training has
a general reputation as most effective for vocational work. It involves employees training at the place
of work while they are doing the actual job. Usually, a professional trainer (or sometimes an
experienced and skilled employee) serves as the instructor using hands-on practical experience
which may be supported by formal classroom presentations. Sometimes training can occur by using
web-based technology or video conferencing tools.

Simulation based training is another method which uses technology to assist in trainee
development. This is particularly common in the training of skills requiring a very high degree of
practice, and in those which include a significant responsibility for life and property. An advantage is
that simulation training allows the trainer to find study and remedy skill deficiencies in their trainees in
a controlled, virtual environment. This also allows the trainees an opportunity to experience and study
events that would otherwise be rare on the job, e.g. in-flight emergencies, system failure, etc. wherein
the trainer can run ‘scenarios’ and study how the trainee reacts, thus assisting in improving his/her
skills if the event was to occur in the real world. Examples of skills that commonly include simulator
training during stages of development include piloting aircraft, spacecraft, locomotives and ships,
operating air traffic control airspace/sectors, power plant operations training, advanced
military/defense system training and advance emergency response training.

Off-the-job training method takes place away from normal work situation – implying that the
employee does not count as a directly productive worker while such training takes place. Off-the-job
training method also involves employee training at a site away from the actual work environment. It
often utilizes lectures, seminars, case studies, role playing and simulation, having the advantage of
allowing people to get away from work and concentrate more thoroughly on the training itself. This
type of training has proven more effective inculcating concepts and ideas. Many personal selection
companies offer a service which would help to improve employee competencies and change the
attitude towards the job.

Promotion

Definition: it refers to upward movement of an employee from his current job position to another that
is higher is pay, responsibility and hierarchy within an organization.

Types of Promotion;

Promotion given to employee in an organization can be classified into three types.

1. Horizontal Promotion:
When an employee is shifted in the same category, it is called
“horizontal promotion”. A junior clerk promoted to senior clerk is such an example. It is
important to note that such promotion may take place when an employee shifted within
the same department, from one department to other or from one plant to another plant.
This kind rewards an employee with an increase in pay, but little to change in
responsibilities.

2. Vertical Promotion:
This is the kind of promotion when an employee is promoted from a lower
category to high category involving increase in salary, status, authority and
responsibility. Generally, promotion means “vertical promotion”,
3. Dry Promotion:
When promotion is made without increase in salary, it is called “dry
promotion”. For example, a lower level manager is promoted to senior level manager
without in salary or pay, such promotion is made either there is resource/fund crunch in
the organization or some employees hanker more for status or authority then money.

Transfer

It can simply be defined as “a change in job assignment of an employee.” It involves movement of

employee from one job to another within an organization while being in the same level of hierarchy,
requiring similar skills, involving same level of authority and responsibility and similar pay.

Transfer differs from promotion in the sense that the latter involving increase in salary, authority,
status and responsibility. While all these remain unchanged /stagnant in the case of former. Also
transfers are frequent and regular whereas promotion is infrequent, if not irregular.

Transfer could be permanent, temporary or ad hoc to meet emergencies. Usually, permanent

transfers are made due to changes in work load or death, retirement, resignation etc, of some
employee. As regards temporary transfer, it arises mainly due to ill health, absenteeism, etc, of some
employee.

Need:

The need for making transfer is left for various reasons as listed below

1. To meet organizational needs;

Change in technology, volume of production, production
schedule, production line, quality of products, organizational structure etc, necessitate an
organization to reassign jobs among employees so that right employee is placed on the job.
2. To satisfy employee need;
Employee may request for transfer in order to satisfy their desire
to work in a particular department, place and under some superior. Personal problem of
employee like health, family circumstances and interpersonal conflicts may also necessitate.
3. To better utilize employee;
When employee is not performing satisfactorily on one job and
management thinks that his/her capabilities would be utilized better elsewhere, he/she may be
transferred to other job.
4. To make the employee more versatile;
In some organization like banks, employees after
working on a job for specified period are transferred to other job with a view to widen their
knowledge and skill and also reduce monotony. This is also called job rotation.
5. To adjust the workforce;
Work force can be transferred from the deportments / plants where
there is less work to the deportment / plant where more work is.
6. To provide relief;
Transfer may be made to give relief to the employees who are overburdened
or doing hazardous work for long period.
7. To punish employee;
Management may use transfer as an instrument to penalize employee
who are indulged in undesirable activities. As a disciplinary action, employees are transferred
to remote and far - flung areas.

Lay Off

The term employee layoff is referred to as temporary separation of an employee from the employer.
However, these days it is also used for permanent termination of employee for business reasons. It
may be for a definite period of time or indefinite time period or forever depending upon the ability of
the employer. Once employer comes out of the financial crisis or becomes able to offer employment
to the laid off employees, they are recalled by him or her for duty. Suspension or termination of
employment with or without notice by the employer or management. Layoffs are not caused by any
fault of the employees but by reasons such as lack of work, cash or material. Permanent Layoff is
called redundancy. Layoff of employees does not mean that they are terminated from the job; such
employees could be recalled after deficit or shortages which effected productivity.
 Discharge
Discharge or dismissal is a permanent separation of a worker from work. It is the termination of his
employment and may be either the result of some disciplinary action or retrenchment of surplus
labour. Thus discharge involves permanent separation of an employee from the pay roll for violation
of company rules or for inadequate performance. Discharging an employee is one of the least
pleasant tasks of running a business – no small business wants to take away an employee ability to
earn a living. However, certain circumstances may make discharging an employee appropriate choice
for maintaining the efficiency and profitability of your business.

Steps for Discharge;

Following are the correct steps for discharging an employee,

I. Preliminary Disciplinary Action;

In most cases, you will base your decision to terminate an
employee on aspects of the person work performance, such an excessive absenteeism, failure
to complete projects on time or misuse of company property. Provide preliminary disciplinary
action, such as verbal warningly written warning
II. Final Written Warning;
If an employee commits repeated infractions and does not respond to
verbal and written warnings, issue a final written warning to give the employee one last chance
before discharging and written warning
III. Notice of Discharge;
After the final written warning, if the employee poor performance
continues, you may have no choice but to discharge the employee. Conduct the termination
meeting in a private area where your discussion cannot be heard by employees other than a
witness. Present the employee with the notice of discharge. This document clearly states that
the employee has been terminated from employment with your company, and provides the
date and reasons for discharge.