INTRODUCTION

Performance Appraisal is defined as a systematic process, in which the personality and performance of
an employee is assessed by the supervisor or manager, against predefined standards, such as knowledge
of the job, quality and quantity of output, leadership abilities, attitude towards work, attendance,
cooperation, judgment, versatility, health, initiative and so forth.It is also known as performance rating,
performance evaluation, employee assessment, performance review, merit rating, etc.Performance
Appraisal is carried out to identify the abilities and competencies of an employee for future growth and
development. It is aimed at ascertaining the worth of the employee to the organization, in which he/she
works.

MAINBODY

If a company does choose to have a performance appraisal system, it must be sure that the system
complies with the laws. In the eyes of the law a performance appraisal is an employment test. It is thus
scrutinized in a manner similar to that of other aspects of the employment process: initial recruitment,
selection and hiring, promotion, compensation, and termination. As a result, the legal requirements for
performance appraisal systems are similar to those for other selection tests.No appraisal system is
immune to illegalities.The following are the most common illegal performance appraisail conditions.

1. If performance appraisal is not based on Job analysis .

2. When performance dimensions in behavioral terms and support assessments are not defined.

3. If performance appraiser is not based on these 5 Areas

4. If discrimination is not monitored and auditted

5. Incompetent Train raters

6. If no appeal mechanism Provided.

7. If no upper-management review is Provided.

8. Inconsistency

9. Inappropriate Feedback

10. Over-Rating

11.Retaliation

1.If performance appraisal is not based on Job analysis .

 Organizations, are required to conduct exhaustive analyses of each job in the company as a condition
of doing performance appraisal. A job analysis can be built directly into the appraisal process itself.When
an individual and manager discuss the important goals and objectives that the individual will address
during the course of the year and against which his performance will be appraised, that's a job analysis.
If a manager evaluates the specific behaviors and expected conduct and demeanor required to perform
according to the company's expectations, and then discusses these expectations and their importance
with each subordinate, that's a job analysis.

When a supervisor and subordinate together determine what results the subordinate should
concentrate on producing over the upcoming year, and they also discuss how the subordinate will go
about generating those resultsthe behaviors and competencies that must be demonstrateda legitimate
job analysis has been conducted.

2.When performance dimensions in behavioral terms and support assessments are not defined.

Not every job is amenable to results-based, quantitative measurement. For many jobs, success depends
on such attributes as cooperation, dependability, customer relations, attitude, and other even more
abstract attributes.The challenge comes in finding a way to measure and evaluate these critical but
intangible attributes.Completely quantifiable measures of performance do not always exist. If they did,
everyone would use them. In fact, if there were complete numerical measures for every aspect of every
job, performance appraisal systems themselves would probably not be necessarythe data would speak
for themselves. But with most jobs, there are few absolutely direct and impartial measures of an
individual's performance, particularly when successful performance is less dependent on performing
countable acts than it is on such vital but elusive responsibilities as the ability to recognize and take
advantage of opportunities, the ability to build a committed work team, or the ability to recognize
obstacles before they become serious interferences.

If performance appraiser is not based on these 5 Areas

Complex forms that attempt to provide a total and complete evaluation of every aspect of the
individual's performance only frustrate managers and allow their biases to overcome their objectivity.
The ideal performance appraisal form asks the appraiser to evaluate the individual in five areas:

1. Organizational Core Competencies. These are the skills, attributes, traits, or behaviors that are
expected of everyone in the organization, regardless of job or organizational level. "Ethics and integrity"
and "customer focus" might be core competencies that everyone in the company will be expected to
demonstrate.

2. Job Family Competencies. These are the competencies that apply to major job families. "Job family" is
a convenient way to think about groupings of individual jobs that share characteristics. Some typical job
families are managerial/supervisor, sales, professional/technical, and operations. "Planning and
organizing" and "conceptual thinking" might be competencies assessed of everyone whose job is in the
professional/technical job family, whereas "safety" may only show up on the form used for employees
whose job falls into the operations job family.

3. Key Job Responsibilities. These are the major responsibilities or duties of the individual's position. An
ideal job description would specify exactly what the key job responsibilities are.

4. Projects and Goals. These are the individual's activities that go beyond the specific tasks and duties
outlined in a job description.

5. Major Achievements. Every performance appraisal form should require the manager to identify a
small number of major accomplishments of the individual over the course of the year.

If discrimination is not monitored and auditted.

Two areas need to be monitored to make sure that the organization faces the least amount of risk from
legal challenge: first, the company's performance appraisal procedures themselves; second, the
personnel decisions that are based on performance appraisal data.

The first area involves determining whether the average appraisal results of members of a protected
class are significantly different from the results of the majority. However, if a complete statistical analysis
of a large organization were made, it's unlikely that there would be no departments or other
organizational units where the average evaluation of one group of employees (e.g., black female
employees) was not significantly lower than the average rating given another group of employees (e.g.,
white males). if the average appraisal results of a protected class are significantly different from those of
the majority, it does not follow that the appraisals are biased or that the appraisal system is
automatically illegal.

If the company's performance appraisal system ends up with the assignment of each individual to a
specific rating category (e.g., marginal, fair, competent, superior, and distinguished), an analysis should
be made to determine whether there is any significant difference in the ratings given to minority group
members versus the ratings of organization members as a whole.

The second area to monitor is the way decisions that are based on performance appraisal are made. In
addition to making sure that the performance appraisals themselves are not discriminatory, it is equally
important to make sure that personnel decisions that are based on data that the appraisals
providecompensation, promotion, selection for special training programs, terminationare also non
discriminatory.

Monitoring and auditing cannot solve problems. They can bring troublesome situations to light. Once the
organization knows where it stands, corrective action can be taken where the need is greatest.

Incompetent Train raters

Ideally, every organization should conduct a formal and comprehensive training program that all
managers are required to attend as a precondition for their conducting performance appraisals. They
should also conduct annual refresher training for all appraisers just before they begin the annual task of
assessing performance and discussing the results.

In the absence of this ideal, virtually every organization can afford to conduct a one-hour briefing session
to help raters carry out their responsibility with some minimal degree of confidence. Just providing this
minimal level of training alone, in addition to the actual benefits it provides in assuring more accurate
appraisals, also is useful in case the organization is charged with discrimination growing out of
performance appraisal.

Even if training raters is not possible at all, there is probably no reason why raters cannot be provided
with a page or two of instructions covering the most important aspects of the performance evaluation
process with some basic suggestions for discussing performance reviews that will reduce the
organization's exposure to legal challenge. At a minimum, all appraisers need to be told to:

- Be prepared to provide specific examples to support performance ratings, particularly those where the
employee is rated as less than satisfactory.

- Avoid any discussion that refers to a person's membership in a protected group.

- Maintain rapport and a positive atmosphere during the discussion, even when discussing problem
areas and the consequences of failure to improve. Many discrimination complaints result not from direct
acts of discriminating but from an individual's belief that he was treated unfairly or caught off guard by
an unexpectedly low rating that was not fully explained and justified.

Finally, just giving appraisers a few examples of well-completed appraisal forms can increase their ability
to do a good job.

If no upper-management review is Provided.

Most organizations require the manager who completes the appraisal form to have it reviewed and
approved by his boss before it is given to the employee. This is a good idea. Managers who might be
capricious or arbitrary in their appraisal assessments may tend to be a tad more cautious knowing that
their direct supervisor must review and approve what they have written first.Upper managers should be
encouraged to do more than rubber-stamp the appraisals that are sent up to them for review. Most of
the time, senior managers have a reasonably good idea of the overall quality of performance of the
people in their department, even though the individuals may be two or three organizational levels down.
If the vice president who's reviewing a bunch of performance appraisals simply takes one appraisal and
says to the appraiser, "I was surprised to see that you ended up rating Patty as superior (or distinguished
or unsatisfactory). Tell me about how you came up with that rating," this question alone will encourage
increased diligence in performance assessment in the future.

If no appeal mechanism Provided.

Today, virtually every organization has an appeal mechanism he can use to contest a perceived unfair
appraisal the legal system. Since employees do in fact have a way to challenge unfair appraisals,
providing them with an internal means to appeal what they believe to be an unfair performance
appraisal without having to go outside the organization can be a cheap form of insurance against
unnecessary lawsuits.

One immediate appeal mechanism simply involves allowing the individual who believes himself to be the
victim of an inaccurate appraisal to state his side of the story as a formal part of the record. Most
appraisal forms contain a space for employee comments. Employees should be encouraged to use it.

Inconsistency

Inconsistency comes into play when you design your evaluations. If you use different forms for every
employee, you also leave yourself open to discrimination claims. Instead, consider using the same form
and the same standards, if not the same goals, for every employee that occupies the same position.

Inappropriate Feedback

Good performance appraisals focus on measurable aspects of a worker's performance at his job. For
instance, saying that a salesperson only hit 75 percent of a quarterly sales quota is a measurable fact.
Saying that he's "not very good" might be true, but appears subjective. Saying that he is "an angry
person" is a personal judgment, while stating that "he swore at three clients on Feb. 6" refers specifically
to on-the-job behavior. Giving feedback that focuses on measurable facts and actual behaviors helps to
keep the evaluation more professional and avoid the appearance of personal bias. This will help it stand
up in court, if necessary.

Over-Rating

One of the biggest illegal problems with evaluations comes up when you are too kind to an employee.
Some managers choose to avoid having an uncomfortable meeting by giving relatively good marks to
underperforming employees. However, if you eventually choose to fire that worker because he's bad at
his job, he'll be able to use the evaluation against you in court. The employee can use the firing and the
evaluation together in an attempt to claim discrimination. In essence, his argument is that, since he's so
good at his job – based on his evaluation – he must have been fired due to discrimination.

Retaliation

Once an employee has made a claim against you, assessing her performance becomes very dangerous
legally. Just about any employee claim – such as an accusation of discrimination or harassment or filing a
worker's compensation claim or a request for family and medical leave – gives that employee a special
protected status. If you give that employee a bad review, a court could view it as retaliation for her claim
instead of as an honest assessment of her performance. While actually retaliating is illegal, simply telling
the truth about a problem employee isn't, but you may have to defend yourself, anyways.

CONCLUSION
As i conclude, annual or quarterly performance appraisal can be a useful tool for both employers and
employees. Done well, appraisals provide a way for managers to give meaningful feedback to employees
to improve their performance. However, when performance appraisals aren't done correctly, they can
create serious legal problems for employers in addition to damaging workplace morale.

REFERENCES

G Mejia, D.B. Balkin and R.L. Cardy, Managing Human Resources, Pearson Education, New Delhi, 2003.

2. R.W Mondy, R.M. Noe and S.R. Premeaux, Human Resource Management, Prentice Hall International
Editions, New Jersey, 1999.

3. N.G. Nair and Latha Nair, Personnel Management and Industrial Relations, S. Chand Publications, New
Delhi, 1999