FREE online courses on Performance and Potential Appraisal - Potential Appraisal

 

In most Indian organizations, people earn promotions on the basis of their past performance. The past performance is considered a good indicator of future job success. This could be true, if the job to be played by the promotee are similar. However, in actual practice, the roles that a role holder played in the past may not be the same he is expected to play if he assumes a different job after his transfer or promotion to a new position. Past performance, therefore, may not be a good indicator of the suitability of an indicator for a higher role.

 

To overcome this inadequacy, organizations must think of a new system called potential appraisal. The objective of potential appraisal is to identify the potential of a given employee to occupy higher positions in the organizational hierarchy and undertake higher responsibilities.

 

Potential appraisals are required to:

• inform employees about their future prospects;
• help the organization chalk out of a suitable succession plan;
• update training efforts from time to time;
• advise employees about what they must do to improve their career prospects.

 

Introducing a Good Potential Appraisal System

 

Steps to be followed while Introducing a Good Potential Appraisal System:

 

The following are some of the steps required to be followed while introducing a potential appraisal system:

• Role Descriptions: Organizational roles and functions must be defined clearly. To this end, job descriptions must be prepared for each job.
• Qualities needed to perform the roles: Based on job descriptions, the roles to be played by people must be prepared (i.e., technical, managerial jobs and behavioral dimensions).
• Rating mechanisms: Besides listing the functions and qualities, the potential appraisal system must list mechanisms of judging the qualities of employees such as:

i.                    Rating by others: The potential of a candidate could be rated by the immediate supervisor who is acquainted with the candidate's work in the past, especially his technical capabilities.

ii.                   Tests: Managerial and behavioral dimensions can be measured through a battery of psychological tests.

iii.                 Games: Simulation games and exercises (assessment centre, business games, in-basket, role play, etc.) could be used to uncover the potential of a candidate.

iv.                Records: Performance records and ratings of a candidate on his previous jobs could be examined carefully on various dimensions such as initiative, creativity, risk taking ability, etc., which might play a key role in discharging his duties in a new job.

§         Organizing the system: After covering the above preliminaries, he must set up a system that will allow the introduction of the scheme smoothly giving answers to some puzzling questions:

i.                    How much weightage to merit in place of seniority in promotions?

ii.                   How much weightage to each of the performance dimensions – technical, managerial, behavioral qualities?

iii.                 What are the mechanisms of assessing the individual on different indicators of his potential and with what reliability?

§         Feedback: The system must provide an opportunity for every employee to know the results of his assessment. “He should be helped to understand the qualities actually required for performing the role for which he thinks he has the  potential, the mechanisms used by the organizations to appraise his potential and the results of such an appraisal”.