Performance Appraisal
Compiled by
Dr. M.Venkatesan
Performance Appraisal
Systematic assessment and descriptions of an
employees accomplishments in the assigned
tasks and assessment of job related strengths
and weaknesses.
Why appraisal?
Organization needs to know how an employee
has performed just as an employee needs to
know how his performance has been viewed by
the organization.
Multiple Objectives
It provides inputs to
a.
Administration for pay & promotion
decision.
b.
Employees on his strengths & weaknesses
c.
Training, Counseling, Career Planning and
Succession Planning Systems
d.
Organization restructuring issues
Appraisal Methods
APPRIASAL METHODS
Absolute Method
Relative Standards
Objectives
Absolute Methods
Essay type
Critical Incident Appraisal
Checklist
Graphic Rating Scale
Forced Choice
Behaviourally Anchored Rating Scales
(BARS)
Relative Standards
Group Order Ranking
Top one fifth
Second one fifth
Individual Ranking
Paired Comparison
by taking total of [n(n-1)]/2
Objectives
MBO
Expression of expectations before beginning of
appraisal year
Periodic reviews and feedback
Year end data collection, final appraisal &
feedback
Self Appraisal
Appraisal discussion and final appraisals
Objectives
360 Appraisal
Inputs from appraisers, peers, subordinates and
customers outside organizations.
Problems in Performance
Appraisal
1.
a.
b.
c.
d.
Relating to SystemHow to evolve measure to assess managerial
tasks.
Generate data on performance
Understanding of system at the top management
level.
Reliable technique for measuring comparative
merit and performance.
Problems in Performance
Appraisal
2. Relating to Appraisera.
b.
c.
d.
e.
f.
Playing God creates anxiety.
Evaluation of personality traits.
Bias and halo effect
Recency of incidents
Central Tendency
Too harsh too easy
Problems in Performance
Appraisal
3. Relating to AppraiseeHis perspective on system depends on how he
earns recognition vis--vis others. His criteria are
rarely explicit.
Some Persistent issues
1.
Linkage with
a.
b.
Development plans
Reward Decisions
2.
What gets evaluated: Performance or Person
3.
Ethical issues in evaluation Power Carries
obligation
4.
Subjectivity Objectivity
Performance Appraisal :
Performance Appraisal (PA) refers to
all those procedures that are used to
evaluate the personality,
performance, potential, of its group
members
Relationship between jab
analysis and performance
Job
analysis
performance
performance
appraisal:
standards
Describes work
& Personnel
Requirement
Of a particular
job
appraisal
Translate job
Into levels of
To acceptable
Or unacceptable
performance
Describes the
Job relevant
strengths and
weakness of
Each individual
Question arises?
Why do we measure performance?
Effective performance appraisal
systems
How do we measure performance?
Characteristics
It is a step by step process
It examine the employee strengths and
weaknesses
Scientific and objective study
Ongoing and continuous process
Secure information for making correct
decisions on employees
Needs and Objectives:
Provide feedback about employees
Provide database
Diagnose the S & W of individuals
Provide coaching, counseling, career planning
to subordinates
Develop positive relation and reduce grievance
Facilitates research in personnel management
Appraisal Benefits
(cont.)
Appraisals offer
employees:
Direction
Feedback
Input
Motivation
Appraisal Benefits
Appraisals offer the
company:
Documentation
Employee Development
Feedback
Legal protection
Motivation system
Why Appraisals Are
Important
Recognize
accomplishments
Guide progress
Improve performance
Why Important
(cont.)
Review performance
Set goals
Identify problems
Discuss career advancement
Steps in performance
Establishing job standards
appraisal
Designing an appraisal programme
Appraise performance
Performance interview
Use appraisal data
For appropriate purpose
Process of
PA
Taking corrective
standards
Setting
performance
standards
Discussing
results
Communicating
standards
Measuring
standards
Comparing
standards
Issues in appraisal
system
Formal and informal
What methods?
Whose performance?
When to evaluate? Appraisal Design?
Who are the raters?
What problems?
What to evaluate?
How to solve?
What to evaluate? (Philip
Model)
H
Potential
L
L
Problem
children
stars
Planned
separation
Social
citizen
Performance
How PA contribute to firms
competitive advantages
Improving
performance
Making correct
decision
Values and behavior
Competitive
advantage
Minimizing dissatisfaction
And turnover
Ensuring legal
competence
Problems in performance
appraisal
1.
Errors In rating
Halo effects
Stereotyping
Central tendency
Constant error
Personal bias
Spill over effect
Problems in performance
appraisal (Contd)
2.
3.
4.
5.
6.
Incompetence
Negative approach
Multiple objectives
Resistance
Lack of knowledge
Essentials of an effective
Mutual trust
appraisal
system
Clear objectives
Standardizations
Training
Job relatedness
Documentation
Feedback and participation
Individual differences
Post appraisal review
Review and appeal
Appraisals and
Discrimination
Title VII
ADA
Other fair employment
Laws
Discrimination (cont.)
Failure to communicate standards
Failure to give timely feedback
Failure to allow employees to
correct performance
Inconsistency in measuring
performance
Failure to document performance
objectively
Appraisal Forms
Define performance expectations
Describe measurement tools
Use a rating system
Cover specific examples
Set measurable goals
Measure Performance
Measurement systems need to be:
Specific
Fair
Consistent
Clear
Useful
Measure Performance
(cont.)
Systems can be:
Numerical
Textual
Management by Objective (MBO)
Behavior oriented
Document Performance
Make sure documentation is objective
Document performance of all
employees
Provide complete and accurate
information
Document performance on a regular
basis
Set Goals.
Based on job requirements
Realistic
Measurable
Observable
Challenging
Prioritized
Employee
Input
Employees take an active role:
Setting goals
Designing action plans
Identifying strengths and
weaknesses
Employees participate in the PA
meeting
Preparatio
n
Employees:
Review performance
Think about new goals
Preparation
(cont.)
Supervisors:
Review performance
Complete written appraisal
Think about new goals
Schedule time and place
Start the
Meeting
Lay out agenda
Talk about money
Encourage input
Give good news
first
During the Meeting
Review performance:
Based on previous goals
Noting strengths and
accomplishments
Identifying areas for improvement
Presentation
Focus on the professional
Tips
Give objective examples
Invite response
Listen actively
Create we mentality
During the Meeting
Set
(cont.)
goals: Based on company goals
Building on areas that need
improvement
End the Meeting
Encourage good performance
Lay out action plan
Communicate outcome of goals not
met
Confirm understanding
Continuous Feedback
Formal appraisals
Informal appraisals
Open
communication
Recognize Good
Verbal
Performance
Public
Tangible
Monetary
Identify Poor
Performance
Act early
Take the right approach
Deal with employee reaction
Handle continued poor
performance
Discipline Poor
Performance
Recognize problems
Talk with employee
Follow company policy
Handle Hard Cases
Reviewing highly emotional
employees
Rating former peers
Key Points to Remember
You must conduct objective appraisals on a
scheduled basis.
Appraisals tell employees how theyre doing and
how they can improve.
Appraisals help create a system of motivation
and rewards based on performance.
Performance Appraisal
Methods
Individual Evaluation Methods
Confidential report
Essay evaluation
Critical incidents
Checklists
Graphic rating scale
Behaviorally anchored rating scale
MBO
Critical Incident method
Ex: A fire, sudden breakdown, accident
Workers
reaction
A
B
C
D
E
informed the supervisor immediately
Become anxious on loss of output
tried to repair the machine
Complained for poor maintenance
was happy to forced test
scale
5
4
3
2
1
Checklist method
Simple checklist method
Weighted checklist method
Forced choice method
Simple checklist method:
Is employee regular
Is employee respected by subordinate
Is employee helpful
Does he follow instruction
Does he keep the equipment in order
Y/N
Y/N
Y/N
Y/N
Y/N
Weighted checklist
method
weights
Regularity
Loyalty
Willing to help
Quality of work
Relationship
0.5
1.5
1.5
1.5
2.0
performance rating
(scale 1 to 5 )
Forced choice
method
Criteria
1.Regularity on the job
Always regular
Inform in advance for delay
Never regular
Remain absent
Neither regular nor irregular
Rating
Most
Least
Graphic Rating Scale
Continuous Rating Scale
Discontinuous Rating Scale
Employee name_________
Deptt_______
Raters name ___________
Date________
-----------------------------------------------------------------------Exc. Good Acceptable Fair Poor
5
4
3
2
1 _
Dependability
Initiative
Overall output
Attendance
Attitude
Cooperation
Total score
Continuous Rating Scale
Indifferent
Enthusiastic
Attitude
No
Interest
Interested
Discontinuous Rating Scale
Very
enthusiastic
BARS( behaviorally Anchored
rating scale)
Step 1.
Identify critical incidents
Step 2.
Select performance dimension
Step 3.
Retranslate the incidents
Step 4.
Assign scales to incidents
Step 5.
Develop final instrument
MBO Process
Set organizational goals
Defining performance target
Performance review
feedback
Performance Appraisal
Group Appraisal
Methods
Ranking
Paired comparison
Forced distribution
Performance tests Field review
technique
Ranking method
Employee
Rank
Paired comparison
method
A
B
C
D
E
A
Final Rank
+
3
No of Positive evaluation
Total no. of evaluation * 100 = employee superior evaluation
Forced Distribution method
No.
of
employees
10% 20%
poor
40%
20%
Below average good
average
Force distribution curve
10%
Excellent
Field review method
Performance
Dimension
subordinate
peers
Leadership
Communication
Interpersonal skills
superior
customer
Decision making
Technical skills
Motivation
Performance criteria for
executives
For top managers
Return on capital employed
Contribution to community development
Degree of upward communication from middlelevel executives
Degree of growth and expansion of enterprise.
For middle level managers
Departmental performance
Coordination among employees
Degree of upward communication from
supervisors
Degree of clarity about corporate goals and
policies
For supervisors
Quality and quantity of output in a given period
Labor cost per unit of output in a given period
Material cost per unit in a given period
Rate of absenteeism and turnover of employees
No of accidents in a given period
Performance Appraisal system is a part of
ongoing management process, the purposes of
which are to:
Provide for systematic planning by allowing the
manager to identify critical job elements &
objectives.
Conduct a systematic review of employees
overall performance & provide constructive
feedback.
Provide objective information to guide
management decisions on promotions etc.
Establish an objective basis for determining
annual performance.
Establishing Performance Standards
Communicating Performance Standards to
employees
Measuring Actual Performance
Comparing Actual Performance with
Standards
Discussing appraisal with the employees
Taking Corrective Action
The following criteria should be followed to
make the performance appraisal more effective:
Make performance appraisal part of an ongoing
process
Look at all aspects of an employees
performance
Make specific and constructive judgments
Criticize work habits & behavior, not the person
Dont let marginal employees slide
Keep complete written records for all
performance appraisals.
Developing Business Plans
Establishing aspects of performance that need
to be measured
Setting up Systems to Monitor & Evaluate
Defining the General Performance Expectations
of Employees
Agreements on Specific Performance Objectives
Developing an Internal Communications System
Ensuring that the performance Appraisal
System is well understood & is working
effectively
Supporting employees to help them perform
well
Seeking Performance improvement
Recognizing & Rewarding good performance
Capabilities
Jobs
Technical
Managerial
Human
Concept
ual
Skilled workers,
Very much
operators, clerks,
essential
typist, foreman, etc.
Not needed Some
desirable
Some
essential
Not
Needed
First level
supervisor, junior
Very essential
A few are
desirable
Some
desirable
Some
essential
Not
Needed
Junior & middle
level manager
Some
important
many not
essential
Important
Some
essential
A few
are
useful
Junior &
middle
level
manager
Some
important
many not
essential
Important
Some
essential
A few are
useful
Senior
managers,
Head of
Dept./Sec
A few are
desirable
Very
essential
Many are
needed
Some are
important
Desirable
Unit Heads,
GM etc.
A few are
desirable
Very
essential
Many are
essential &
important
Essential
Chief
Executives
Not needed
Important
Very
essential
Most
Essential
Traditional
Modern
Graphic Rating Scales
Confidential Report
Straight Ranking Method
Paired Comparison Method
Forced Distribution Method
Grading System
Checklist Method
Critical Incident Method
HR Scorecard
HR Accounting
Competency Mapping
Assessment & Development
Centre
360 degree Appraisal
540 degree Appraisal
Management by Objective (MOB)
Behaviorally Anchored Rating
Scale (BARS)
Identifying Job Families
Identifying Competencies
Defining Competencies
Strategizing Competencies
Defining Measurement Scale
Position Profiling
Person Profiling
Development of Reward
Strategy
Business Strategy
Satisfy need and expectations of stake holders
Provide added value to customers
HR Stratery
.
Obtain, develop and retain the skilled, motivated & committed people the organization needs
Reward Strategy
Define what the organization wants & is prepared to pay for encourage & support desired behavior
Develop & maintain competitve pay policies which will attract & retain high quality people.
Adopt a total rewards approach which includes a mix of rewards the best meets & individuals needs.
Reward Management Process
Non Financial
Rewards
Employee
Benefits
Market
Surveys
Business
Strategy
Reward
Strategy
Pay
Structures
Pay Levels
& relativities
Total
remuneration
Improved
performance
Job Evaluation
Performance Pay
Perfomance
Mangement
Employee
development
