PERFORMANCE APPRAISAL
By.Prof.Brijmohan Vyas
Introduction
After an employee has been selected for a job
and has been trained to do it and has worked
on it for a period of time, his performance
should be evaluated.
Performance appraisal is the process of
deciding how employees do their jobs. It
indicates how well an individual is fulfilling the
job requirements.
Performance Appraisal
Often the term Performance is confused with
efforts.
Performance is always measured in terms of results.
Example: A bank employee may exert a great deal
of effort while preparing for the CAIIB examination
but manages to get a poor grade.
Definitions
• Performance appraisal is a method of evaluating the
behavior of employees in the workplace, normally
including both the quantitative and qualitative
aspects of the job performance.
• It is a systematic and objective way of evaluating
both work-related behavior and potential of
employees.
• It is a process that involves determining and
communicating to an employee how he or she is
performing the job and ideally, establishing a plan of
improvement.
Features
• The appraisal is a systematic process.
• It tries to find out how well the employee is
performing the job and tries to establish a
plan for further improvement.
• It is done periodically, certainly not one shot
deal.
• It is not a past-oriented activity.
• It is not job evaluation-it is not finding how
much worth is job for the organization but it is
to find out how that job is carried out.
Continued..
• Performance is not limited to calling the fouls-
but it also focuses on employee development.
• Performance appraisal may be formal (more
objective and fair) or informal (subjective and
influenced by personal factors).
Objectives
It provides inputs to
a. Administration – for pay & promotion
decision.
b. Employees on his strengths & weaknesses by
Feedback.
c. Training, Counseling, Career Planning and
Succession Planning Systems
d. Organization restructuring issues.
Performance Appraisal Process
• Establish performance standards
• Communicate the standards
• Measure actual performance
• Compare actual performance with standards
and discuss the appraisal
• Taking corrective action, if necessary.
Methods of Performance Appraisal
METHODS
Traditional Modern
• Graphic Rating Scales • Behaviourally
• Ranking Method Anchored Rating Scales
• Paired Comparison (BARS)
• Forced Distribution • Management By
• Critical Incident Objectives
Method • 360 degree
• Essay or Free Form
Appraisal
Traditional
1.Graphic Rating Scale (GRS)
• Also called as linear rating scale or simple
rating scale
• This method lists a set of performance factors
such as job knowledge, work quality,
cooperation that the supervisor uses to rate
employee performance using an incremental
scale.
Contd..,
Graphic Rating Scale
Trait: _____ ____ Outstanding
____ Very Good
____ Good
____ Improvement Needed
____ Unsatisfactory
____ Not Rated
Contd..,
2.Ranking Method
• Employees are ranked from best to worst on
some characteristics.
• Alternation Ranking Scale
Trait: ____________
Highest-ranking employee
1. _________________ 4. ____________
2. _________________ 5. ____________
3. _________________ 6. ____________
Lowest-ranking employee
3.Paired Comparison Method
• In paired comparison the supervisor
compares each employee with every
other employee in the group and rates
each as either superior or weaker of the
pair. After all comparisons are made, each
employee is assigned a summary or
ranking based on the number of superior
scores received.
Contd..,
Paired Comparison Method
As Employee
compared
to
Arun Shyam Smita Riya
Arun + + -
Shyam - - -
Smita - + +
Riya + + -
1 3 1 1
4.Forced Distribution Method
• evaluator must place a fixed percentage of
employees in each performance category
• Example:
10% must be rated = Excellent
20% must be rated = satisfactory
40% must be rated = Neither Satisfactory nor
Unsatisfactory
20% must be rated = Unsatisfactory
10% must be rated = Poor
• comparing one employee to another
Contd..,
Forced Distribution Method
5.Critical Incident Method
• Unusual event that denotes superior or inferior
employee performance in some part of the job
keep a record of:
• critical incident
• work-related behaviors
• ratee’s involvement in it
6.Essay or Free Form Appraisal
• It is a narrative appraisal method and is based
on absolute standards
• It describes an employee’s actions rather than
indicating an actual rating
• The intent is to allow the rater more flexibility
than other rating methods do.
Contd…,
The process
• A job is broken into various general
dimensions. Each dimension is followed by
some space where the rater has to write an
essay on that dimension
• These essays concentrate on performance
strengths and weaknesses, identify
developmental needs and also suggest
courses of remedial action
• These essays can either be composed alone
or in collaboration with the appraisee.
Modern Methods
1. Behaviourally Anchored Rating Scales (BARS)
• Developed by Patrica Cain Smith & Lorne
Kendall
• A series of continuous graphic rating scales
arranged vertically
• Behavioural descriptions exemplify various
degrees of each dimensions serve as anchors
on the scale
• Designed to allow superiors to be more
comfortable while giving feedback
Contd..,
BARS Dimension:
Quality of group member input
Effective Group member has read all documents, agreed
upon material
Group member has read all documents, some
agreed upon material
Group member participates in discussion, though
not always prepared
Group member does little work and offers no
valuable ideas or feedback
Ineffective Group member does not attend any meeting
Contd..,
Steps in BARS development
• Generate Critical Incidents: Ask persons who know
the job (job holders, supervisors) to describe specific
illustrations of effective and ineffective performance.
• Develop Performance Dimensions: Cluster the
incidents into a smaller set of 5 or 10 performance
dimensions
• Reallocate Incidents: Another group of experts
reallocate the original critical incidents.
– They get the cluster and critical incidents in a
jumbled manner
– They reassign each incident to the cluster they think
it fits best.
Contd…,
• Scale the Incidents: Rates the behavior
described by the incident as to how effectively
or ineffectively it represents performance on
the dimension
• Develop a Final Instrument: 6-7 incidents
used as behavioural anchors for each
performance dimension
Management By Objectives
• The use of MBO was first widely advocated in
the 1950’s by the management theorist Peter
Drucker.
• MBO methods of performance appraisal are
results-oriented i.e., they seek to measure
employee performance by examining the
extent to which predetermined work objectives
have been met.
Contd..,
Management by Objectives (MBO)
1. Set the organization’s goals
2. Set departmental goals
3. Discuss departmental goals
4. Define expected results (individual)
5. Performance reviews: measure the results
6. Provide feedback
Contd..,
Performance Appraisal under an MBO Program
Step 5a:
Step 1: Inappropriate
Organization goals
goals deleted
Step 5b:
Step 2: New inputs
are then
Department Step 3: provided
goals Supervisor
lists goals for
subordinate Step 4:
Mutual
agreement of
Step 3: goals
Subordinate
proposes
Step 7: goals
Review of
organization
performance Step 5:
Step 6:
Final Interim
review review
360 degree Performance Appraisal
SUPERIOR
CUSTOMERS
CONSULTANT
PEERS SELF
SUBORDINATES
Performance Appraisal Process
Identify Specific Performance
Appraisal Goals
Establish Performance Criteria
(Standards) and Communicate
Them To Employees
Examine Work Performed
Appraise the Results
Discuss Appraisal with
Employee
Steps for Introducing Performance
Appraisal System
• Role Descriptions-roles should be defined.
• Assessing the Qualities needed to perform
the roles
• Setting up the ‘Key Result Areas’
• Choosing appropriate Rating Methodology
• Setting up the Feedback system.
Essentials of Effective Appraisal System
• Reliability and validity
• Job relatedness
• Standardization
• Practical viability
• Legal sanction
• Training to appraisers
• Open communication
• Employee access to results
• Due process
Why Performance Appraisal May Fail
Mgr not taking
Lack
PA seriously
Unclear appraisal
Language skills
Mgr not Mgr not
honest or prepared
sincere
Insuff.
No on-going Rewards
feedback
Ineffective Mgr Lacks
discussion Infor.
