Supervisors must take care of the following points when they evaluate the performance of their staff.
1 Realize the Purpose of Performance Appraisal
Performance appraisal is an important means of personnel management. It serves a variety of functions. Each performance appraisal may be designed to fill one or more of these functions, while the style of the appraisal itself may be controlled by the function it is to serve. Supervisors must understand the purpose of performance appraisal in the particular organization that they work.
(1) Performance Improvement and Staff Development
Performance appraisal provides feedback to employees about the quality of their job performance so that they know in which areas they may improve their work. In addition to this, performance appraisal provides supervisors with an idea of what training is necessary for individual members of staff to develop their abilities. Supervisors must use performance appraisals to improve performance and develop competent staff so that they may successfully pursue the overall organizational goal.
(2) Job Assignment
Supervisors must determine the skills and abilities of employees in their performance appraisal and to make use of this information in job assignment and the placement of personnel. Supervisors are expected to evaluate the present capacity and aptitude of their staff and judge whether or not there is any other duty in the same organization to which they may be more suited.
(3) Pay Increase
The performance appraisal may be used to decide whether or not to give an employee a pay increase. A pay increase is considered a reward for work accomplished and the main factor in evaluating staff is appraising what they have attained. Usually, there is a limit to the number of employees that may receive a pay increase. There needs to be not only an individual rating(of whether an employee's performance is worthy of a pay increase) but also a relative rating(of whether an employee has performed better than others).
(4) Personnel Decisions
Performance appraisal may be used in personnel decisions such as promotion, demotion or dismissal. Promotion depends not just on the performance evaluation of an employee's recent accomplishments, but also on their potential and capacity to perform the duties of the rank or post that they may be promoted to. In the case of demotion or dismissal, there is a possibility that the legitimacy of this may be legally disputed. The evaluator needs to carefully take note of the facts supporting this type of rating.