Sachith

Swathi
Manjushree
Nurturing turns
potential into
performance
Difference Between Performance
Management and Performance
Appraisals
Performance Performance
Management Appraisal
Processes used to The process of evaluating
identify, encourage, how well employees
measure, evaluate, perform their jobs and
improve, and reward then communicating that
employee performance. information to the
employees.
Performance Management Cycle

Development
Tool
Administrative
Tool
Types of performance
Information
Performance
 Traditional methods of
performance appraisal
1. Essay Evaluation Method
2. Straight Ranking Method
3. Paired Comparison Method
4. Critical Incident Method
5. Field Review Method
6. Checklist Method
7. Graphic Rating Method
8. Forced Distribution Method
 Essay Evaluation method -
Free Form method
Essay evaluation method is a non-quantitative technique in
which the appraiser prepares a written statement about the
employee being appraised.

Concentrates on describing specific strengths and weaknesses

in job performance.

The rater considers the employees :

o Job knowledge and potential
o Understanding of companys programs, policies, objectives etc
o Relation with co-workers and supervisors
o Planning, organizing and controlling ability
o Attitude and perception
Essay Evaluation method -
Free Form method
 Essay Evaluation method -
Free Form method
Pros:
Cons:
o Provides a good deal of
information about the o It is highly subjective; the
employee and also reveals supervisor may write a biased
more about the evaluator. essay.
o Less structured and o The appraiser is required to
confining find time to prepare the essay
o Process is open-ended and o Difficult to find effective writers
very flexible.
 Straight Ranking Method
man-to-man ranking
This method compares employees to each other,
ranking them from best to worst

o One of the oldest and simplest techniques

of performance appraisal
o It is quite useful for a comparative evaluation.

o Employee may be assessed by his/her superiors, colleagues,

subordinates or sometimes by his/her customers
o Traits like attitude, performance, regularity, accountability
and sincerity etc. are rated with scale from 1 to 10.
o All numbers chosen or marked will be added to determine
highest score gained by employee.
 Straight Ranking Method
man-to-man ranking
Employee name_________ Dept_______
Raters name ___________ Date________
______________________________________________________________________________
Exc. Good Acceptable Fair Poor
______________________5_______4________3__________2______1___________________
Dependability
Initiative
Overall output
Attendance
Attitude
Cooperation
___________________________________________________________________________
Total score
 Straight Ranking Method
man-to-man ranking
Pros:
Cons:
o Simple and Quick
Identification of Top
o Competition Versus
Performers
Teamwork
o Very effective when there are
o Poor Morale and High
relatively few jobs to be
evaluated. Turnover
o Improved Productivity and o Rank judgements are
Profitability subjective.
Paired Comparison method
o This method compares each employee with every other
employee in a group, one at a time

o The pairs of employees of same job

post or level are formed, following which
they are evaluated on the basis of
performance of each other.

o Subjects like skills, experience, team

player, behavior, etc. are tabulated and
then rank is assigned

o Basis of the overall comparisons, the

employees are given the final rankings
 Paired Comparison method
No. of comparisons(pairs) : N(N-1)/2, where N = No. of employees
 Paired Comparison method

Pros:
Cons:
o Systematic method of
o Not applicable for large
comparison and evaluation
group of employees
o Set priorities where there are
o Useful when objective data is
conflicting demands
unavailable
o Best in situations where only
o Useful where priorities are
one employee will be
promoted not clear.
Critical Incident Method
o Evaluator rates the employee on the basis of critical events
and how the employee behaved during those incidents.

o This technique of performance appraisal

was developed by Flanagan and Burns.

o The manager maintains logs on each

employee, whereby he periodically records
critical incidents of the workers behavior.

o At the end of the rating period, these recorded critical

incidents are used in the evaluation of the workers
performance
 Critical Incident Method
Ex: A fire, sudden breakdown, accident

Workers Reaction Scale

A informed the supervisor 5

immediately

B Become anxious on loss of output 4

C Tried to repair the machine 3

D Complained for poor maintenance 2

E Was Happy to forced test 1

 Critical Incident Method

Cons:
Pros:
o Negative incidents may be
o Form of documentation that more noticeable than
reflect all data about positive ones
employee performances o Time consuming
o Periodical records are o May forget to mention any
maintained important incidents
o Maintaining logs helps in o Requires very close
preparing checklist supervision which is disliked
by the employees
Field Review Method
o This method of performance appraisal is conducted by the
rater who does not belong to the employees department.

o It can be a senior member of the Human

Resource department or a training officer.

o The interviewer prepares in advance the

questions to be asked

o They discuss and interview the supervisors

and appraise the employee on the basis of feedback received
from the superiors on the performance, behavior and skills of
the employee
 Field Review Method
Performance Peers Superior Customer
Dimension Subordin
ate
Leadership ^ ^

Communication ^ ^

Interpersonal Skills ^ ^

Decision Making ^ ^ ^

Technical Skills ^ ^ ^

Motivation ^ ^ ^
 Field Review Method

Cons:

Pros : o Very time consuming method.

o The rater is not familiar with
o Completely eliminates the employees, making it
issues that arise due to impossible for him to observe
raters biasedness their actual behavior
o The rater might feel aggrieved
in cases when employees try to
clarify any matter.
Checklist Method
o Another of the easiest methods of appraising employees
performance.

o Under this method, a checklist is prepared by the HR

manager and is forwarded to the rater.

o The checklist includes list of questions

depicting behavior and job performance of
employee
o Rater has to answer them in just YES
or NO form

o Carry some scores (equal or different), which is totaled at the

end of the procedure by the HR manager.
Checklist Method
 Checklist Method
Pros:
o Helps in evaluating degree of
uniformity of the rater by
giving him two similar
questions in different
manner.
o Helps to avoid making
exaggerated statements and
using inflammatory language
o Maintains Standardization
Cons:
o Manager may not devote
enough time to prepare for a
checklist-based appraisal
o Prone to raters biases
o Does not allow rater to give
relative ratings
Graphic Rating scale Method
o This is the very popular, traditional method of performance
appraisal.

o Under this method, core traits of employee pertaining to his

job are carefully defined

o These traits are allotted with

numerical scale to tabulate the scores
gained by appraisee

o These scores are then sum-up to

determine the best performer
Graphic Rating scale Method
 Graphic Rating scale Method

Cons:
Pros:

o Raters capricious mood may

o Less time consuming to
result in ineffective
develop.
evaluation.
o Allows for quantitative
o Different supervisors will
comparison.
use the same graphic scales
o Easy and simple method of
in slightly different ways.
performance appraisal as it o More validity comparing
does not require any writing
workers ratings from a single
skills
supervisor
Forced Distribution Method
o In around late 90s,Tiffenintroduced this new method of
performance appraisal in an attempt to eliminate the flaws
of the raters.

o It is assumed that the performance is

conformed to normal distribution.

o The manager is forced to distribute employees on the basis of

their performance on all points of the bell shaped scale

o Popular in big organizations especially in services-driven

sectors, which have large workforces.
o Top-ranked employees are considered high-potential
employees and are often targeted for a more rapid career and
leadership development programs.
Forced Distribution Method
Forced Distribution Method
Pros:
o Force reluctant managers to
make difficult decisions
o Create and sustain a high
performance culture in which
the workforce continuously
improves.
Cons:
o Assumption of normal
distribution,
errors of central tendency.
o It creates false competition
between employees.
o All employees might not fit
neatly into a category
o This system doesn't fit to
present trend of management
 Development
Modern Holistic
Methods Win-Win
 1. Assessment Centre
Conducted during the inception of a project.
Method
Assessment Centre
A group of employees drawn from different work units.
Work together on an assignment similar to the one they would be
handling when promoted.
Experienced managers with proven ability serve as evaluators.

Evaluation
1. All employees evaluated both individually and collectively
by using simulation techniques like role playing, business
games and in basket exercises.
2. Employees are evaluated on job related characteristics
considered important for job success.
3. Evaluates observe , evaluate and rank the performance of
all the participants
 Pros Cons
1. Fair and Objective 1. Evaluator Panel
2. Suitable for Team Creation 2. Time Consuming
3. Encapsulates Diversity (Skills, 3. Requirement of Consultant
Abilities , Ethnicities Knowledge
4. Recreated for Various other jobs 4. Cost
 2.Human Resource Accounting Method

1. Human resources are a valuable asset of any

organization
2. Valued in terms of money.
3. When competent, and well-trained employees leave an
organization the human asset is decreased and vice
Performance
versa. is judged in terms of
1. Costs
1. Expenditure on Human resource planning
2. Recruitment, selection
3. Induction
4. Training
5. Compensation
2. Contribution of employees.

Contribution
Money value of labour productivity
Value added by human resources
 Contribution calculations

Pros
1. Financial Metrics is Given
Preference
2. Accuracy w.r.t Budget
3. Easy to Put Checks and
Controls
Cons
Measurement of Performance in
monetary terms is not very
Critically Acclaimed
 BARS (Behaviourally Anchored
Rating
Represents the latest Scale)
innovation in performance appraisal
Combination of Critical incident techniques and Rating scale
methods of Evaluation
Critical incidents serve as anchor statements on a scale
Rating form usually contains 6-8 specifically defined performance
dimensions.
Step 1: Collect Critical Step 3: Tasks and
Incidents Reclassification
Job holder and Supervisor are 1. Prioritize
probed on incidents that are 2. Assign Weightage to each
the most critical pertaining to task.
the job 3. Discard Task with less than
Step 2: Identify the 75% Weightage
Performance Dimensions Step 4: Assigning Scale
Key Performance requirements Value to the individual
of the jobs Tasks
Technical Competence 1. Tasks are rated on a 1 -7 or
Liaison with other 1-9 to represents
department performance level .
Quick analysis of 2. 1 - ineffective performance;
information 3. Top scale - effective
Day to Day activity performance.
 Critical Incident:
When a Customer detects a Defective Merchandise on a
shop Floor
 Ratings of the Behaviour During
the Incident

Pros
Addresses the Critical
Cons
Performance Behaviour. Time Consuming
Qualitative and Consultant Review
Quantitative. Cost
Directly relates the Org
 MBO
Developed by Peter Drucker in 1954.
Originally Coined as Management by objectives and self control.
An effective and operational technique of performance appraisal .
Also known as Work Planning and Review or Goal setting approach to
appraisal.
Process where superior and subordinate managers of an
organization jointly identify its common goals.
Process :
1. Set company objectives
2. Cascade objectives to the Departments
3. Communicate to employees
4. Brainstorm and Monitor individual Goal and Target
Setting
5. Evaluate performance
6. Reward performance

MBO involves appraisal of performance against clear, time bound and mutually
 MBO
Exercise

Organisational
MBO

1. Achieve cash flow

of 2 Crore per
month

2. Decrease OPEX
by 5%

3. Increase Gross
Margin by 10%.

4. Achieve payback
Construct the Score Card
 360 Degree Appraisal Review
360 Degree is a system or process in which employees receive
confidential, anonymousfeedbackfrom the people who work
along with them.

Key Features
Organisations focus on employee
development.

Multi-Rater.

For middle and senior level.

Complexity of Roles enables the

need for sufficient data from
all stakeholders for a
meaningful assessment.

Also used by the person receiving

the feedback to plan Training
and development
 360 Degree Assessment
Competencies

7. Communication
1. Team Work
8. Mentorship
2. Communication
9. Leadership
3. Developing self & others
10. Result Orientation
4. Integrity and Ethics
11. Innovation & Risk
5. Change Management
assessment
6. Planning & Organising
12. Relationship Building
 ERRORS IN WRITING PERFORMANCE
EVALUATIONS

o The halo effect

o The pitchfork effect or recency effect.
o Stereotyping
o Comparing
o Mirroring
o Managers and supervisors want to avoid being the
bad guy.
QUALITIES OF A GOOD APPRAISAL

It is Factual

It is Fair

It describes the Whole Period

It describes the Whole Job

It has no Surprises
Thank you for listening