A process that unites goal setting, performance appraisal, and development into a single, common system whose aim

is to ensure that the employees performance is supporting the companys strategic aims.

Performance Appraisal is a process of evaluating an employees performance in terms of its requirements.

Performance appraisal, is considered to be one part or phase of performance management system. It can also be defined as a difference between an event and a year round activity. Performance Management ensures continuous improvement in employees capacity and that he possesses the required training and skills to achieve his targets along with feed back.

Broader Than Performance Appraisal

Begins with a look at goals & strategies of the organization

Researchers found that companies that used performance management programs had greater profits, better cash flow, stronger stock market performance, greater stock value and higher sales per employee (or productivity) than companies that didnt.

A leading edge organization seeks to create an efficient and effective performance management system to: Translate agency vision into clear measurable outcomes that define success, and that are shared throughout the agency and with customers and stakeholders; Provide a tool for assessing, managing, and improving the overall health and success of business systems; Continue to shift from prescriptive, audit- and compliance-based oversight to ongoing, forward-looking strategic partnership involving agency headquarters and field components; Include measures of quality, cost, speed, customer service, and employee alignment, motivation, and skills to provide an in-depth, predictive performance management system; and Replace existing assessment models with a consistent approach to performance management

Employee performance management includes:

Provide information about the performance ranks basing on which decisions regarding salary fixation, confirmation, promotion, transfer and demotion. Provide feedback information about the level of achievement and behavior of subordinate. This information helps to review the performance of the subordinate, rectifying performance deficiencies and to set new standards of work, if necessary. Superior uses them as a base for coaching and counseling the individual. Provide information which helps to counsel the subordinate. Provide information to diagnose deficiency in employee regarding skill, knowledge, determine training and development needs and to prescribe the means for employee growth provides information for correcting placement. To prevent grievances and in disciplinary activities.

To create and maintain a satisfactory level of performance. To contribute to the employee growth and development through training, self and management development programs. To help the superiors to have a proper understanding about their subordinates.' To guide to job changes with the help of continuous ranking. To provide fair and equitable compensation based on performance. To facilitate for testing and validating selection tests, interview techniques through comparing their scores with performance appraisal ranks To provide information for making decisions regarding lay off, retrenchment etc. To ensure organizational effectiveness through correcting employee for standard and improved performance, and suggesting the change in employee behavior.

At the first stage, performance standards are established based on job description and job specification. The second stage is to inform these standards to all employees including appraisers. The third stage is following the instructions given for appraisal measurement of employee performance by the appraisers through observations, interview, records and reports. The fourth stage is finding out the influence of various internal and external factors on actual performance of the employee and others.

The fifth stage is comparing the actual performance with the standards and finding out the deviations. The sixth stage is communicating the annual performance of the employee and other employees doing the same job and discuss with him about the reason for positive or negative deviations. The seventh stage is suggesting necessary changes in standards, job analysis, and internal and external environment. The eighth stage is follow-up of performance appraisal report.

Supervisor Peers Subordinates Self Appraisal Customers

Graphic rating scale. Ranking method. Forced distribution method. Critical incident method. Essay method. BARSbehaviorally anchored rating scale. MBOmanagement by objectives.

Graphic or Trait Rating Scales

Ratings are based on traits or characteristics of the job incumbent Examples: Dependability, Honesty, Team Player, Job Knowledge, etc. Ratings are usually on a Liker-type scale (1-5) Usually the least helpful or accurate

Forced Distribution Method

Just like a bell curve in academia Categories are just like in Trait Scales Difficult for supervisors to use and VERY difficult to justify to employees Standards for ratings have to be crystal clear in order to work properly

Behaviorally Anchored Rating Scales (BARS) Provides concrete examples for the desirable, acceptable, and unacceptable behaviors Very easy to use for supervisors, and valid to employees Legally defensible Expensive and time-consuming to develop

Management By Objectives (MBO) Based on achievement of goals/objectives Feedback is given frequently over the goalsetting period Adjustments are made to the goals and time tables as feedback is given Rewards are typically given for meeting goals Problem: setting low, unchallenging goals

360 r Feedback
Method uses multiple raters (e.g., supervisor, peers, subordinates, customers) to gather feedback on those aspects of performance well-known to the rater All information is compiled into one feedback report that is presented to the employee A self-improvement plan is developed to overcome weaknesses and capitalize on strengths Usually used for development; generally not used for salary increases because of political reasons

1. 2. 3. 4.

INTERVIEW An interview in which the supervisor and subordinate review the appraisal and make plans to remedy deficiencies and reinforce strengths. There are four types of appraisal interviews. Satisfactory Promotable Satisfactory Not promotable Unsatisfactory Correctable Unsatisfactory - Uncorrectable

Halo Effect: Appraising based on single characteristic. Horn Effect : The raters bias is in the other direction, where one negative quality of the employee is being rated harshly. Leniency Effect : Depending on raters own mental make-up at the time of appraisal , raters may be rated very leniently. Stringency Effect : Depending on raters own mental make-up at the time of appraisal, raters may be rated very strictly Regency Effect : The rater gives greater weight age to recent occurrences than earlier performance.

1. Environmental constraints. 2. Organizational leadership 3. Interdependence of sub-systems 4. Organizational structure

To improve the performance of the employees of the organization one should have to follow these recommendations:

The first step should be that every department and employee of every department should clearly know about the goals and mission of the company. It is suggested that individual employees may be informed about his /her performance rating. A report on the assessment may be given to the individual concerned to know about his strength and weakness. This will give an opportunity to the employee to improve up on his strength and overcome his weakness for further development. Strong commitment from top management is required. Each employee knows about the rules and regulations of the company. There should be some standards made for comparing the present performance of each employee against that performance. The performance standard should be different from level to level. The reporting officer should contact with his/her subordinate worker after every week so that if he/she have any problem, it can be tackled out or through this if the worker is not working well the supervisor can guide him/her for improving the performance

The incentives given to the employees should be basis on the right decision. Appraisal form could be provided so that everyone can know about his/her performance. The employees hired for the job should have the abilities which are required by the organization. The reporting officer should have keep the performance data of each subordinate. The reporting officer should give monthly feedback to the subordinates regarding their performances and thereby giving suggestions to improve. Guideline should be given to every employee in this regard. Follow the rule of right people on the right job is necessary for the performance. The performance appraisal system in the organization is conducted once in a year and this is used mostly for administrative purpose like promotions, salary increases etc., it is suggested that performance appraisal could be done at more frequent intervals, so that it will provide feedback on a continuous basis.

Developing an effective performance appraisal system requires strong commitment from top management: if the system does not provide the linkage between employee performance and organizational goals, it is bound to be less than completely effective. An effective system of performance appraisal is a major component of an organization that allows every employee to feel that his/her contribution has contributed to the success of the organization and a desire to add to that success.

Thank You