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Describe the essentials of a good appraisal system.
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(1) It must be easily understandable. If the system is loo complex or loo time consuming, it will not be successful.
(2) It must have the support or all line people who administer it. If the line people think it is too theoretical, too ambitious, too unrealistic, or that it has been foisted on them by ivory-tower staff consultants who have no comprehension of the demands on the time of the line operators, they will resent it. A similar goodwill and understanding must exist between the rater and the ratees.
(3) The system should fit the organisation's operations and structure. A system that may work extremely well at a company whose activities are compact and whose executives have ready access to one another may have no success at all at a plant whose activities are scattered and whose officers are often widely separated. Similarly, where the operations are interdependent and interlinked performance data pertaining to any one individual cannot be regarded as sufficiently discrete or reliable for appraising his performance.
(4) The system should be both valid and reliable. The validity of ratings is the degree to which they are truly indicative of the intrinsic merit of employees. The reliability of ratings is the consistency with which the ratings are made, either by different raters, or by one rater at different times. Both validity and reliability result from objectivity.
(5) The system should have built-in incentive, that is a reward should follow satisfactory performance. Many authors, however, advocate, against a direct linkage between appraisal and rewards. In their opinion, such a connection throttles downward communication of performance appraisal because superiors do not like being questioned by disgruntled subordinate in the event of an adverse appraisal.
(6) The system should be periodically evaluated to be sure that it is continuing to meet its goals. Not only there is the danger that subjective criteria may become more salient than the objective standards originally established, there is the further danger that the system may become rigid in a tangle of rules and procedures, many of which are no longer useful;
