Performance Appraisal (PA) refers to all those

procedures that are used to evaluate the

personality performance

potential of its group members

Provide a basis for promotion/ transfer/ termination:

Identify Or

those employees who deserve promotion

those who require lateral shift (transfer) or

termination

PA is used for career planning

Enhance employees effectiveness by helping to

identify their strengths and weaknesses and Inform them about expected levels of performance If employees understand their roles well, they are likely to be more effective on the job

Identify training and development needs:

Identifying training and development needs of

employees is necessary to prepare them for meeting

challenges in their current and future employment

Aid in designing training and development programs:

Identifying skills required to be developed would help

in tailor- making training and development programs

Remove work alienation: Counseling Employees

corrects misconceptions which might result in work

alienation

Remove discontent: Identifying and removing

factors responsible for workers discontent would

motivate them for better work performance

Develop inter-personal relationships: Relations

between superior - subordinate can be improved through realization that each is dependent on the other for better performance and success

Aid wage administration: Performance appraisal can help in development of scientific basis for reward allocation, wage fixation, incentives Improve communication: Performance appraisal serves

as a mechanism for communication

between superiors and subordinates

Establish Performance Standards

Performance standards serve as benchmarks against which performance is measured

Standards should relate to the desired results of each

job

Communicate the Standards

Performance appraisal involves at least two parties, the appraiser who does the appraisal and the appraisee whose performance is being evaluated

Communicate the Standards

The

appraiser should prepare job descriptions clearly;

help appraisee set his goals and targets; analyse results objectively; offer coaching and guidance to appraisee whenever required and reward good results
The

appraisee should be very clear about what he is

doing and why

Measure Actual Performance

Performance measures, to be helpful must be

easy to use, reliable and must report on the

critical behaviors that determine performance

Performance measures may be objective or

subjective

Objective performance measures are indications of job performance that can be verified by others and are usually quantitative

Subjective performance measures are ratings that are based on the personal standards or opinions of

those doing the evaluation and are not verifiable by

others

Actual performance may be better than expected and sometimes it may go off the

track

Whatever be the consequences, there is a way

to communicate and discuss the final outcome

Corrective action is of two types One puts out the fires immediately

Other strikes at the root of the problem

permanently

In order to be effective, the criteria for performance

appraisal should be genuinely related to success / failure in the job and should be amenable to objective judgement

MBO is an example of performance-based appraisal approach that involves setting objectives and comparing performance against those objectives

 Objectives

give greater freedom to both

management and the employees in deciding how performance is to be measured

For the appraisee

Better understanding of his role in the

organizationwhat is expected and what needs

to be done to meet those expectations

Clear understanding of his strengths and weaknesses to develop himself into a better performer in future

Increased motivation, job satisfaction, and self-

esteem

Opportunity to discuss work problems and how they can be overcome Opportunity to discuss aspirations and any guidance, support or training needed to fulfil those aspirations

Improved working relationships with supervisors

For the Management

Identification of performers and non-performers

and their development towards better performance

Opportunity to prepare employees for assuming higher responsibilities

Opportunity to improve communication between the employees and management

Identification of training and development needs Generation of ideas for improvements Better identification of potential and formulation of career plans

For the Organization

Improved performance throughout the organization

Creation of a culture of continuous improvement and success

Conveying the message that people are valued

 Confidential report Essay evaluation Critical incidents Checklists Graphic rating scale Behaviorally anchored rating scale Forced choice method

MBO

 Ranking

Paired comparison
Forced distribution

Other methods
Performance tests Field review technique

Descriptive report Prepared at the end of the year Prepared by the employees immediate supervisor

The report highlights the strengths and weaknesses

of employees Prepared in Government organizations Does not offer any feedback to the employee

 The rater is asked to express the strong as well as weak

points of employees behavior

The rater considers the employees :
Job knowledge and potential

Understanding of companys programs, policies, objectives etc

Relation with co-workers and supervisors Planning, organizing and controlling ability Attitude and perception

This method has the following limitations:

Highly subjective Supervisor may write biased essay Difficult to find effective writers A busy appraiser may write the essay hurriedly without assessing properly the actual performance of the worker If the appraiser takes a long time it becomes uneconomical from the view point of the firm

 Manager prepares lists of statements of very

effective and ineffective behavior of an employee These critical incidents represent the outstanding or poor behavior of the employees The manager periodically records critical incidents of employees behavior

Example:
July 20 - Sales clerk patiently attended to the customers complaint. He is polite, prompt, enthusiastic in solving the customers problem July 20 - The sales assistant stayed 45 minutes beyond his break during the busiest part of the day. He failed

to answer store managers call thrice. He is lazy,

negligent, stubborn and uninterested in work

Limitation of this technique are:

Negative incidents may be more noticeable than positive incidents. Supervisors have a tendency to unload a series of complaints about incidents. Results in very close supervision which may not be liked by the employee. The recording of incidents may be a chore for the manager concerned who may be too busy or forget to do it.

 A checklist is a set of objectives or descriptive statements

about the employee and his behavior.

Under weighted checklist, value of each question may be weighted. Example: Is the employee really interested in the task assigned? Yes / No Is he respected by his colleagues? Yes / No

 A form is used to evaluate the performance of the employees A variety of traits may be used in this device, the most common being quality and quantity of work Easy to understand and use. Permits statistical tabulation of scores of employees

Combination of rating scale and critical incidence

Steps:
Collect critical incidents Identify performance dimensions Reclassification of incidents Assigning scale values to incidents

Producing the final instrument

 This method uses several sets of paired phrases, two of which may be positive and two negative The rater is asked to indicate which of the four phrases is the most and least descriptive of a particular worker Favorable qualities earn plus credit and unfavorable ones

earn the reverse

 MBO emphasizes collectively set goals that are

tangible, verifiable, and measurable

Focuses attention on goals rather than on methods Concentrates on Key Result Areas (KRA) Systematic and rational technique that allows management to attain maximum results from available resources by focusing on achievable goals

 Arranging organizational goals in a means-ends chain Engaging in joint goal setting

This process has the following steps:

Identify KRAs Define expected results

Assign specific responsibilities to employees

Define authority and responsibility relationship
Conducting periodic progress review

Conducting annual performance review

Ranking method
The evaluator rates the employee from highest to lowest on some overall criteria

Paired comparison method

Each worker is compared with all other employees in a
group For several traits paired comparisons are made, tabulated

and then rank is assigned to each worker

This method is not applicable when the group is large

 The rater is asked to appraise the employee according to

predetermined distribution scale.

Two criteria used for rating are: job performance and promotability. A five point performance scale is also used without mentioning any descriptive statements.

The worker is placed between two extremes of good and

bad performance.

 Employee is appraised by a group of appraisers. The group consists of

Immediate supervisor of the employee Other supervisors who have close contact with the employees work. Manager or head of the departments. Consultants or Clients

The appraiser goes to the field and obtains the information about work performance of the employee by way of questioning the said individual, his peer group, and his superiors

It is a systematic collection and feedback of performance data on an individual or group, derived from a number of stakeholders

Data is gathered and fed back to the individual participant in a clear way designed to promote

understanding, acceptance and ultimately

behavior

 To help employees do a better job by clarifying what is expected of them To plan opportunities for development and growth

To strengthen the superior-subordinate working

relationship by developing mutual agreement of goals To provide an opportunity for employees to express themselves on performance related issues