Steps of Performance appraisal
1. Establish performance standards
2. Design appraisal program
3. Measure actual performance
4. Compare actual performance with set standard
5. Discuss the appraisal with employee
6. Initiate corrective action
Different appraisal Program
BARS :
1. Identify Performance Dimensions: These dimensions should be observable and measurable. For
example, in a customer service role, performance dimensions could include "active listening,"
"problem-solving," and "professionalism.“
2. Generate Critical Incidents: Critical incidents are specific examples of behavior or actions that
demonstrate performance on each dimension. These incidents are gathered through
observation, interviews, or feedback. For example, a critical incident for "active listening" could
be "Repeating back customer concerns to ensure understanding."
3. Anchor Incidents with a Rating Scale: In this step, each critical incident is assigned a rating scale
or level of performance. For example:
Level 1: Ineffective Active Listening - Rarely repeats back customer concerns.
Level 2: Developing Active Listening - Sometimes repeats back customer concerns.
Level 3: Proficient Active Listening - Consistently repeats back customer concerns to ensure
understanding.
Level 4: Exemplary Active Listening - Actively listens, paraphrases, and clarifies customer
concerns, demonstrating exceptional understanding.
LATIKA BAJETHA (HRM) SEM-2 (SRCC)
4. Appraise Performance: The evaluator refers to the critical incidents and selects the most
appropriate description that aligns with the observed behavior. They rate the employee's
performance as "Developing Active Listening" because the employee sometimes repeats back
customer concerns.
Rater Biasedness
1. Leniency: Leniency occurs when a rater consistently rates employees higher than their actual
performance warrants. This can lead to inflated ratings and a lack of differentiation between
high and low performers.
2. Strictness/Severity: Strictness or severity is the opposite of leniency. It occurs when a rater
consistently rates employees lower than their actual performance. This can result in
undervaluing high performers and discouraging employee morale.
3. Central Tendency: Central tendency error happens when a rater avoids extreme ratings and
tends to rate all employees as average or close to the middle of the scale. This leads to a lack of
differentiation and fails to identify and reward exceptional or poor performance.
Halo and Horn Effect:
4. Halo Effect: The halo effect occurs when a rater's overall impression of an employee influences
their evaluation of specific traits or behaviors. For example, if a rater perceives an employee as
highly skilled in one area, they may tend to rate them positively in other areas as well, even if
the evidence does not support it.
5. Horn Effect: The horn effect is the opposite of the halo effect. It occurs when a rater's negative
impression of an employee influences their evaluation of specific traits or behaviors. For
example, if a rater perceives an employee as lacking in one area, they may tend to rate them
negatively in other areas, even if the evidence does not justify it.
Recency Effect and Primacy Effect:
6. Recency Effect: The recency effect refers to the tendency of a rater to give more weight to the
employee's most recent performance or behavior when making evaluations. This can
overshadow the employee's performance over a longer period and may not provide an accurate
representation of their overall performance.
7. Primacy Effect (First Impression): The primacy effect is the opposite of the recency effect. It
occurs when a rater's initial impression of an employee influences their evaluation throughout
the appraisal period. The rater may remember and rely heavily on the employee's early
performance, disregarding subsequent improvements or changes.
Contrast Error, Stereotyping, and Spill-over Effect:
8. Contrast Error: Contrast error happens when a rater's evaluation of an employee is influenced by
comparing them to other employees rather than objective criteria. For example, if an employee
LATIKA BAJETHA (HRM) SEM-2 (SRCC)
is rated higher or lower based on their performance relative to their peers rather than their own
individual performance.
9. Stereotyping: Stereotyping occurs when a rater assigns certain characteristics or traits to an
employee based on preconceived notions or generalizations about a particular group. This can
lead to biased evaluations that do not consider the individual's unique abilities and
performance.
10. Spill-over Effect: The spill-over effect refers to the carryover of a rater's feelings or perceptions
about an employee from one performance aspect to another. For example, if an employee
performs exceptionally well in one area, the rater may unconsciously rate them positively in
other areas, even if their performance is average or below average.
Similarity Error and Personal Bias:
11. Similarity Error: The similarity error occurs when a rater gives higher ratings to employees who
are similar to themselves in terms of background, personality, or characteristics. This can lead to
biased evaluations that favor employees who are perceived as more similar to the rater.
12. Personal Bias: Personal bias refers to a rater's subjective opinions, beliefs, or preferences that
influence their evaluation of an employee. It can stem from personal relationships, favoritism, or
negative perceptions that may not be based on objective performance criteria.
Status Effect:
13. Status Effect: The status effect occurs when a rater's evaluation of an employee is influenced by
their position or status within the organization. Employees in higher-ranking
LATIKA BAJETHA (HRM) SEM-2 (SRCC)
