Performance Appraisal – Formal and Informal Appraisal Processes

Performance Appraisal – Formal and Informal Appraisal Processes

Performance Appraisal

According to DeNisi (2013), performance appraisal refers to a systematic, organized process of evaluating work-related strengths and weaknesses to ensure that if the individual being evaluated performs well, the strengths are reinforced and encouraged. If the performance is not good, work habits can be identified and readdressed in a way that is conducive to an organization’s objectives (Toppo, 2012). Performance appraisal is also defined as merit rating, whereby an individual is rated as worse or better than others. It is mainly used to show how well employees perform the tasks assigned to them compared to the predetermined set of standards. Performance appraisal extends beyond establishing the grounds for promotion and can either be formal or informal.

Formal And Informal Appraisal Processes

Murphy et al. (2018) argue that formal appraisal processes are organizational processes conducted systematically to compare real performance and expected individual performance. These processes could include an interview used to assess an employee’s performance and provide feedback to the employee to improve their performance (Murphy et al., 2018). Informal appraisal processes are, on the other hand, continuous employee evaluation by their superiors during the work process. According to Murphy et al. (2018), informal appraisal processes are solely based on the supervisor’s opinion in most cases but may involve an individual who is not affiliated with the organization.

The main difference between formal and informal appraisal processes is that informal appraisal processes require a clear understanding of the employees’ ability levels to properly select assessment activities that employees can reasonably attempt, while formal appraisal processes only focus on employee work-related strengths and weaknesses. Another difference is that informal appraisal processes focus on identifying the needs of an individual while formal appraisal processes focus on offering feedback to employees on what they should improve.

Why Both Formal and Informal Appraisal Processes Are Important to the Performance Management Process

Both components are important to the performance management process because they help identify employees’ strengths, thus enabling organizations to capitalize on them by supporting them. The two components also help identify weaknesses so that an organization can put the right measures in place, such as supervisory support required to improve the employee’s performance. Cory et al. (2007) argue that employees who get support after a performance appraisal process create and generate ideas to boost their performance. However, the ability of a performance appraisal process to motivate employees is dictated by how the results of the process are utilized. Punishing employees based on the results of the performance appraisal processes could result in discouraging innovative behavior.

The feedback that employees get from formal performance appraisal processes is important to the performance management process because employees can use the feedback to learn what they achieved in the work environment and use the information from the results as a reference point for improving their performance in the future(Idowu, 2017). The feedback also ensures that the expectations of employees are communicated clearly hence creating a conducive work environment where employees can generate new ideas (Idowu, 2017). Positive feedback also motivates employees to perform better, while fair criticism contributes to addressing failures and deficiencies, thus promoting proper behavior in relation to better performance.

Conclusion

Based on the discussion above, it is evident that performance appraisal processes contribute to the improvement of the performance management process by acting as motivation tools. Organizations can combine formal and informal performance appraisal processes to ensure that they acquire the required level of performance by providing feedback to employees and identifying their strengths and weaknesses to design the proper measures to capitalize on the strengths and eliminate the weaknesses.

References

Cory, S. N., Ward, S., & Schultz, S. A. (2007). Managing human resources in a small firm. Motivation through performance evaluation ‘. The CPA Journal, 62-65.

DeNisi, A. S. (2013). Performance appraisal. Management. https://doi.org/10.1093/obo/9780199846740-0002

Idowu, A. (2017). Effectiveness of performance appraisal system and its effect on employee motivation. Nile Journal of Business and Economics, 3(5), 15. https://doi.org/10.20321/nilejbe.v3i5.88

Murphy, K. R., Cleveland, J. N., & Hanscom, M. E. (2018). Performance appraisal and management. SAGE Publications.

Toppo, M. L. (2012). From performance appraisal to performance management. IOSR Journal of Business and Management, 3(5), 1-6. https://doi.org/10.9790/487x-0350106

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Performance Appraisal

Compare formal and informal appraisal processes. Explain why both components are important to the performance management process.