In this lecture, you're going to learn how performance appraisal is performed. Every company has predetermined standards, which help in judging and assessing the employee's performance. So these standards would differ from company to company. And as a manager, or talent management manager, you would have to use these predetermined standards for performance appraisal or evaluation. So here's a quick recap of what performance appraisal is about. It's about measuring against pre determined standards, which are already set.

Some of the common standards against which performance appraisal is done include these. The first one is quality standards. Next About quantity standards. performance appraisal can also be done based on the results obtained or the targets achieved for the month, quarter or year and some companies or some departments, the target based performance appraisal is done even for weekly or bi weekly achievements. But in this lecture, I want to show you the the two basic performance standards which can help you in conducting performance evaluation or performance appraisal. First one is effectiveness and the second one is efficiency.

Effectiveness and efficiency are somehow related. When we are talking about management. These terms are quite often confusing for most people. So, allow me to clear this condition effectiveness refers to achieving goals and objectives on time. And efficiency means to do a task correctly with minimum cost by using resources in optimum way, or optimum use of resources at minimum expense of close to efficiency. It's very important to be both effective and efficient.

Let's take an example to understand this concept better. three teams, A, B and C have worked for the first quarter of 2019. As a manager, you have to conduct performance appraisal for them based on effectiveness and efficiency. In this case, effectiveness and efficiency are the two parameters for doing performance appraisal. The goal is given to each employee was to create 60 units in three months. And the total budget given to each team was $20,000.

So, here's what Team A achieved. This team was focused on efficiency and they created some units, but they were unable to achieve the target of 60 units. So, what do you observe in case of Team A, you can identify that Team A was efficient, but they were not effective because they did not achieve the goal, even though they use the resources carefully. The next team or team be focused on effectiveness and were able to achieve the target of 60 units. But they achieve this effort after a lot of wasted resources. What did you observe in this case?

Think about it. As a manager, you would have noticed that Team B was effective, but they were not efficient because achieved target but did not use the resources in the best way, or optimum way. Finally, the last team's result was that they were able to achieve the target of 60 units. And they did this within the given budget and time period. What is your observation piece of things? See?

Think about it for a second and then I'll share my observation with you. teensie was both efficient and effective because they use their resources carefully and achieved That target on time without wasting the resources. The most successful team out of the three was team see. This is how you can do the performance evaluation based on two very promising standards which are efficiency and effectiveness. I hope you're clear with these two terms and how performance appraisal can be done by using them. Congrats on coming this far in the course.

You are doing really, really well. Keep going. I will see you in the next section.