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is the formal process by which an employee's job performance is evaluated, usually in relation to the employee’s job description, goals, and overall contribution to the organization. It is a key tool in performance management, offering insights for improvement, motivation, and development.
Key Objectives of Performance Appraisal:
- Performance Evaluation: Assessing the employee’s performance based on predetermined criteria (e.g., goals, skills, behaviors).
- Feedback: Providing constructive feedback to employees to help them improve, recognize strengths, and identify areas of improvement.
- Development and Training: Identifying training needs and career development opportunities to help employees grow professionally.
- Promotion and Compensation Decisions: Assisting in making informed decisions regarding promotions, pay raises, bonuses, or other rewards.
- Setting Future Goals: Establishing new objectives and performance goals for the next evaluation period.
Types of Performance Appraisal Methods:
- Rating Scales: Employees are rated on a scale (e.g., 1–5) based on specific performance criteria like teamwork, punctuality, or quality of work.
- 360-Degree Feedback: Input is gathered from multiple sources, such as peers, subordinates, supervisors, and sometimes even customers.
- Self-Appraisal: Employees evaluate their own performance, providing insights into their perception of their work.
- Management by Objectives (MBO): Performance is evaluated based on the achievement of specific objectives set at the beginning of the evaluation period.
- Behaviorally Anchored Rating Scales (BARS): Combines elements of quantitative and qualitative data by rating specific behavioral examples tied to performance.
Common Challenges in PA:
- Bias: Personal biases or favoritism can lead to inaccurate appraisals.
- Infrequent Feedback: Yearly or bi-annual appraisals may not provide timely feedback.
- Lack of Objectivity: Some criteria may be subjective, leading to inconsistent evaluations.
- Stress for Employees: The process can cause anxiety, especially when linked to compensation or promotion.