Performance Appraisal

Perf orm anc e Appr ai sa l

 Performance Appraisal (PA) refers to all those

procedures that are used to evaluate the

 personality

 performance

 potential of its group members

Objec tive s of P erf orm ance Appr ai sa l

Provide a basis for promotion/ transfer/ termination:

Identify those employees who deserve promotion

Or those who require lateral shift (transfer) or

termination

PA is used for career planning

Objec tive s of P erf orm ance Appr ai sa l

•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

Objec tive s of P erf orm ance Appr ai sa l

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

Objec tive s of P erf orm ance Appr ai sa l

Aid in designing training and development programs:

Identifying skills required to be developed would help

in tailor- making training and development programs

 Objec tive s of P erf orm ance Appr ai sa l

Remove work alienation: Counseling Employees

corrects misconceptions which might result in work

alienation
Objec tive s of P erf orm ance Appr ai sa l

Remove discontent: Identifying and removing factors

responsible for workers’ discontent would motivate

them for better work performance

Objec tive s of P erf orm ance Appr ai sa l

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

Objec tive s of P erf orm ance Appr ai sa l

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

Pr oc ess of Perf orm ance Appr ai sa l

Establish Performance Standards

≈Performance standards serve as benchmarks against

which performance is measured

≈Standards should relate to the desired results of each

job
 Pr oc ess of Perf orm ance Appr ai sa l

Communicate the Standards

 Performance appraisal involves at least two parties,

the appraiser who does the appraisal and the

appraisee whose performance is being evaluated

 Pr oc ess of Perf orm ance Appr ai sa l

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

Pr oc ess of Perf orm ance Appr ai sa l

Measure Actual Performance

≈ Performance measures, to be helpful must be

easy to use, reliable and must report on the

critical behaviors that determine performance

 Meas ure A ctual Pe rfo rm ance

 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

 Meas ure A ctual Pe rfo rm ance

 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

 Co mpa re Ac tua l pe rform anc e with
St anda rds and Dis cus s t he Appr ais al

≈ 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

 Ta king Cor rec ti ve Actio n

 Corrective action is of two types

 One puts out the fires immediately

 Other strikes at the root of the problem

permanently
 Pe rfo rm anc e Cr it eria

 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

 Pe rfo rm anc e Cr it eria

Objectives give greater freedom to both

management and the employees in deciding

how performance is to be measured

 Bene fit s of Perfo rma nc e Appra is al

For the appraisee

 Better understanding of his role in the organization—

what 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

 For the appraisee

 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
Bene fit s of Perfo rma nc e Appra is al

For the Management

 Identification of performers and non-performers and

their development towards better performance

 Opportunity to prepare employees for assuming

higher responsibilities
 For the Ma nagement

 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
 Bene fit s of Perfo rma nc e Appra is al

For the Organization

 Improved performance throughout the organization

 Creation of a culture of continuous improvement and

success

 Conveying the message that people are valued

Pe rfo rm ance App rais al - Indi vidual
Eval uatio n M ethod s

 Con fi dential re port

 Ess ay evaluati on
 Cri ti cal incidents
 Ch eck li sts
 Grap hi c r ati ng scale
 Behaviora lly anch ored ratin g sc al e
 Force d choi ce metho d
 MBO
Perf or manc e A ppr ai sa l - Mult ipl e Pers on
Eval uatio n M ethod s

 Ran ki ng

 Pa ired comp ari son

 Force d distrib ution

 Othe r metho ds

 Pe rf orm ance tes ts

 Field rev iew tec hniq ue

 Conf iden tia l Re po rt

Descriptive report
 Prepared at the end of the year
 Prepared by the employee’s immediate supervisor
 The report highlights the strengths and weaknesses of
employees
 Prepared in Government organizations
 Does not offer any feedback to the employee
 Ess ay Eva lua tio n

 Th e ra ter is ask ed to exp ress t he str ong as wel l as

weak po in ts of emp lo yee ’s beh avi or
 Th e ra ter co nsi de rs th e empl oyee ’s :
 Job kn ow ledg e and p oten tial
 Understa ndin g of comp any’ s pr ogr ams, p ol ici es, ob jec ti ves
etc
 Rel ati on with co-work ers an d sup ervi sors
 Plan ni ng , org ani zi ng and contr ollin g abil ity
 Atti tud e and p ercepti on
 Ess ay Eva lua tio n

 Thi s method h as t he f ollowin g li mi ta tions :

 Hig hly subject ive
 Sup erv is or may wri te bias ed es say
 Dif fi cu lt to fi nd eff ecti ve wri ters
 A busy app rai ser m ay wri te th e es say h ur ri edly withou t
as ses sing prop erl y the actual p erf ormance o f the work er
 If th e ap pr aiser ta kes a lon g time it bec ome s
uneconomi ca l fr om the vi ew poi nt of the fi rm
 Cri ti cal Inc id ent T echnique

 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

employee’s behavior
 Crit ic al Inc ident Technique
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 manager’s call thrice. He is lazy, negligent,
stubborn and uninterested in work
 Crit ic al Inc ident Technique

 Limi tat io n o f thi s tech niqu e are:

 Negati ve i ncid ents may be more n oticea ble th an pos itive
inci den ts .
 Sup ervi sors have a tend ency to unl oad a se ri es of comp lai nts
abou t in cid ents .
 Res ults i n very cl ose supervi sion which may not b e l iked by the
employ ee.
 The re cord ing of i ncidents may be a chore for th e man ager
concern ed who ma y be too bus y or for get to do it.
 Che ckl is t

 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
 Graphic Rat ing Sc ale

 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

Behavi or ally Anc hored Ra ting Sc al e

Co mbi nat io n of rat in g scal e and cr it ical incid en ce

 Steps:
 Col lect criti ca l in cid ents

 Identif y perf ormance d imens ion s

 Reclas sification of inci den ts

 Ass ig nin g sc al e values to in cid ent s

 Prod uci ng th e fin al ins tru men t

 Forc ed Cho ic e Method

 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

Mana ge ment by Objec tives (MBO)

 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

 Key El ement s Of MB O

 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
 Mult ip le Pers on E va luat ion Met hods

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
 Forc ed Dis tri buti on Methods

 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.
 Group Appra is al

 Emp loye e is ap pr aise d by a gr oup of app rai ser s.

 Th e gr oup co ns ist s o f
 Immed iate sup ervi sor of the emp loyee
 Other superv isors who hav e clos e contact wi th th e
emp loy ee’s work.
 Ma nager or hea d of th e dep artments .
 Con sultan ts o r C li ents
 Field Review Tec hn iqu e

 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

 360 o Appr ais al Sys tem

 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

Appra is al Intervi ew and Fee dba ck - Le t
the Empl oy ee Know Where He St ands

 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