CIMA E2 Syllabus B. Managing people performance - Performance Appraisal System - Notes ^{11 / 19}

A Performance appraisal system is used to achieve objectives of the organisation and improve efficiency at the tactical level of control.

Process of Appraisal

1. Identify Assessment Criteria - Based on a job analysis, performance standards, and personal history

2. Prepare an Appraisal Report - Traditional approaches focus on appraisal of a subordinate by their immediate superior

3. Appraisal Interview - An exchange of views about the appraisal report

4. Assessor’s superior reviews - Pre-empt possibility of assessee feeling subject to assessor’s biases

5. Prepare and implement action plan - To deliver on the agreed changes/improvements needed

6. Follow up - Track the progress of the action plan

Some appraisal methods are:

1. Unstructured format - This method captures all aspects of employee performance

2. Self rating - In this method, the individual rates themselves on agreed criteria.

3. Ranking system - In this method, performance is compared to previously agreed targets.

4. 360-degree approach - In this method, the manager appraises the individual and the individual appraises the manager.

An effective performance appraisal system should be fair and consistent, should be carried out with serious intent with the support of the senior managers, be cost effective, should relate to the organisational objectives and be understood by all.

Advantages of an effective performance appraisal system:

1. Improves communication between managers and subordinates

2. Helps identify training needs

3. Provides a fair process for remuneration

4. Enables succession planning/Identifies candidates for promotion

5. Increases management control