After an employee has been selected for a job, has been trained to do it and has worked on it for a period of time, his performance should be evaluated. Performance appraisals or Evaluation is the process of deciding how employees do their jobs. Performance here refers to the degree of accomplishment of the tasks that make up an individual’s job. It indicates how well an individual is fulfilling the job requirements. Often the term is confused with efforts which means energy expended and used in a wrong sense. Performance is always measured in terms of results. A bank employee for example may exert a great deal of effort while preparing for the CAIIB examination but manages to get a poor grade. In this case the effort expended is high but performance is low.
Performance appraisal is a method of evaluating the behavior of employees in the work spot normally including both the quantitative and qualitative aspects of job performance. It is a systematic and objective way of evaluating both work related behavior and potential of employees. It is a process that involves determining and communicating to an employee how he or she is performing the job and ideally, establishing a plan of improvements.