Requirements of Effective Appraisal Systems before processing a New Payroll.

The key requirements of any appraisal system before processing a new payroll are relevance, sensitivity, and reliability. In the context of on-going operations, the key requirements are acceptability and practicality.

Let’s get into the details.

Item # 1: Relevance

This requirement implies that there are clear links

(1) Between the performance standards for a particular job and an organization‘s goals and

(2) Between the critical job elements identified through job analysis and the dimensions to be rated on an appraisal form.

Item # 2: Sensitivity

This requirement suggests that a performance appraisal system is capable of distinguishing effective from ineffective performers. If it is not, then the best employees will be rated no differently from the worst employees. The appraisal system must not be used for any administrative purposes.

Item # 3: Reliability

The 3^rd and most important requirement of a sound appraisal system is reliability. In this context, reliability refers to the consistency of judgment. For any considered employee, appraisals made by raters working independently of one another should agree closely. In practice, ratings made by supervisors tend to be more reliable than those made by peers. Certainly, raters with different perspectives (e.g., supervisors, peers, subordinates) may see the same individual‘s job performance very differently. To provide reliable data, each rater must have an adequate opportunity to observe what the employee has done and the conditions under which he or she has done it. Otherwise, unreliability may be confused with unfamiliarity.

Item # 4: Acceptability

In practice, acceptability is the most important requirement of all, for it is true that human resource programs must have the support of those who will use them. Or else human inventiveness will be used to dissatisfy them. Unfortunately, many organizations have not put much effort into garnering the front-end support and participation of those who will use the appraisal system.

Item # 5: Practicality

This requirement indicates that appraisal instruments are easy for managers and employees to understand and use.

Conclusion

These are the five basic requirements of performance appraisal systems, and none of them can be ignored. However, since some degree of error is inevitable in all employment decisions, the crucial question to be answered in regard to each appraisal system is whether its use results in less human, social, and organizational cost than is currently paid for these errors. The answers to that question can result only in a wiser, fuller utilization of our human resources.