PERFORMANCE

APPRAISAL

Presented by
Arun Lal V.L.
Hithesh Krishnan
 WHAT IS PERFORMANCE
APPRAISAL??????
Performance appraisal
 Evaluating an employee’s current or past
performance relative to the person’s
performance standards.
 Performance appraisal is the process of
obtaining, analyzing and recording
information about the relative worth of an
employee.
Performance appraisal
 It is a process to identify the strengths and
weaknesses of the employee.
 Meaning
 “Differentiate between individuals”

 First introduced in New York city in 1883.

 It involves

 Setting work standards

 Assessing the employee’s actual performance
relating to the standards
 Feedback
Purposes
 Identify the potential in employees.
 Determining training needs for further
improvement
 Motivating employees
 Establishing a basis for research.
Process of Performance Appraisal

 ESTABLISHING PERFORMANCE STANDARDS

 COMMUNICATING THE STANDARDS
 MEASURING THE ACTUAL PERFORMANCE
 COMPARING THE ACTUAL WITH THE
DESIRED PERFORMANCE
 DISCUSSING RESULTS
 DECISION MAKING
ESTABLISHING PERFORMANCE
STANDARDS

 used to as the base to compare the actual

performance of the employees
 setting the criteria to judge the
performance of the employees
 Standard should be clear, easily
understandable and in measurable terms.
COMMUNICATING THE STANDARDS
 Help to understand their roles
 Standards should also be communicated to
the appraisers
MEASURING THE ACTUAL PERFORMANCE

 continuous process which involves

monitoring the performance
COMPARING THE ACTUAL WITH THE
DESIRED PERFORMANCE

 Tells the deviations in the performance of

the employees
 It includes recalling, evaluating and
analysis of data related to the employees’
performance.
DISCUSSING RESULTS

 Focus is on communication and listening

DECISION MAKING

 Take the required corrective actions

relating to the appraisal
APPROACHES
 Traditional approach
 Modern approach
TRADITIONAL APPROACH
 Also called as overall approach
 Past oriented approach
 Tool for determining rewards
 Did not consider the developmental aspects
of the employee performance
Modern approach
 More formal and structured process
 It includes a feedback process
 Development process
Methods of
Performance
Appraisal
Methods of performance appraisal
 Numerous methods have been devised to
measure the quantity and quality of
employee’s job performance.
 Appraisal can be classified into two types:
 Past oriented method
 Future oriented method
Past oriented method
 Rating scales
 Check list
 Forced choice method
 Forced distribution method
 Critical incidents method
 Behaviorally anchored rating scales
 Field review method
 Performance test and observations
 Confidential records
 Essay method
 Cost accounting
 Comparative evaluation approach
 Paired-comparison method
Rating scales
 Simplest and most popular technique
 Job performance criterion such as
dependability, initiative, output, attendance,
attitude etc. are take as rating scales.
 Each scale ranges from excellent to poor.
 Rating scales offer the advantages of
adaptability, relatively easy use and low cost.
A large number of employees can be
evaluated in a short time and the rater does
not need any training to use the scale
Check list
 A checklist of statements on the traits of the
employee and his or her job is prepared in
two columns (Yes column or a No column).
 The rater can tick the Yes column if answer
is positive and no column answer is
negative.
 The advantages are economy, easy to
administration, limited training and
standardization.
Forced choice method
 The rater is given a series of statement about the
employee.
 These statements are arranged in blocks of two or
more and the rater indicates which statement is
most or least descriptive of the employee.
 Advantage of this method is the absence of
personnel bias in rating
 Disadvantage is that the statements may not be
properly framed i.e. they may not descriptive of the
ratee’s traits
Forced distribution method
 This method operates under an assumption that
the employee performance level conforms to a
normal statistical distribution.
 Generally assumed that employee performance
levels conform to a bell shaped curve.
 The major weakness is that employee performance
level always conform a normal distribution.
Cont…

For e.g.
The assumed distribution exist as
excellent 10%, good 20%, average 40%,
below average 20%, unsatisfactory 10%.
Critical incidents method
 It focuses on certain critical behavior of an
employee that make all the difference
between effective & non-effective
performance of a job.
 Such incidents are recorded by the superiors
as and when they occur.
 Advantage is that the evaluation is based on
actual job behavior, giving job related
feedback to the ratee is easy.
Behaviorally anchored rating scales
 Sometimes called behavioral expectation scales.
 Are rating sales whose scale points are determined
by statements of effective & ineffective behaviors.
 The rater is expected to indicate which
behavior on each scale describes employees
performance.
 Developed to provide results which
subordinates could use to improve
performance
Field review method
 This is an appraisal by someone outside the
assessee’s own department.
 The outsider reviews the employee records
and holds interviews with the ratees and his
or her superior.
 The method is primarily used for making
promotional decisions at the managerial
level
Performance tests and observations
 Here employee assessment may be based
upon a test of knowledge or skills.
 The test may be oral, written or actual
demonstration of skills.
 The test must be reliable and valid.
 The performance test are apt to measure
potential more than actual performance.
Confidential records
 Are maintained mostly in govt. departments.
 A typical confidential report should have 14 items:
 Attendance
 self-expression
 ability to work with others
 leadership
 Initiative
 technical ability
 ability to understand new material
 ability to reason
 originality and resourcefulness
 areas of work that suits the person best
 Judgment
 Integrit
 responsibility
 indebtedness.
Essay method
 The rater must describe the employee within a
number of categories such as:
1. The rater’s overall impression of the employees
performance.
2. The promotability of the employee.
3. The jobs that the employee is now able or
qualified to perform.
4. The strength and weakness of employee.
5. The training and development required by the
employee.
Cont…
 Its extremely useful in filling information gaps
about the employees.
 The strength of the essay method depends
on the writing skills and the analytical ability
of the writer.
 It consumes much time because the rater
must collect the information necessary to
develop the essay.
Cost accounting method
 It evaluates performance from the monitory
returns the employee yields to his or her
company.
 The performance of the employee is
evaluated based on the relationship between
cost & benefit.
Comparative evaluation approach
 It compare one worker’s performance with
his or her co-workers.
 Usually conducted by supervisors.
 This can result in a ranking from best to
worst.
 They are useful in deciding promotions &
rewards.
Paired-comparison method
 Appraiser compares each employee with
each other employee, one at a time.
 For e.g. there are 5 employees named A, B,
C, D & E. The performance of A is compared
with the performance of B & a decision is
made about who is better. Then A is
compared with C D & E in that order. The
same procedure is repeated for other
employees.
Cont…
 The number of comparisons may be calculated
with the help of the formulae:
N (N-1) / 2
where N= No. of employees to be
compared.
 FUTURE ORIENTED APPRAISALS
Future oriented appraisals
 Performance can be assessed by focusing on
employee potential or setting future performance
goals.
 The commonly used future oriented techniques
are:
1. MBO
2. Psychological appraisals
3. Assessment centers
4. 360 degree appraisal
MBO
 MBO process seems to be most useful with
managerial personal and employees who
have a fairly wide range of flexibility & self-
control in their jobs.
. It is a process by which the superiors and
subordinate managers of an organization
jointly identify common goals.
Disadvantages of M.B.O
 Takes more time
 Incompatibility due to the higher expectations
of the supervisor.
Psychological appraisals
 The Psychologist evaluate the employee’s
intellectual, emotional, motivational & other related
characteristics that suggest individual potential &
may predict future performance.
 The quality of the appraisal depends largely
on the skills of the Psychologist.
 The approach is slow & costly.
Assessment centers
 It’s a central location where managers may
come together to have their participation in
job related exercises evaluated by trained
observers.
 Its now used for evaluating executive or
supervisory potential.
 The problem with the assessment centers is
their cost.
360 degree appraisal
 Here multiple raters are involved in
evaluating performance.
 Its understood as systematic collection of
performance data on an individual or group,
derived from supervisors, team members,
colleagues & self.
 Its effective in identifying and measuring inter
personal skills, customer satisfaction & team
building skills.
 What should be rated?
 One of the steps in designing an appraisal
programme is to determine the evaluation
criteria .It is obvious that the criteria
should be related to the job.
 The six criteria for assessing
performance are:
 1. Quality: employee should care upon
the quality of work.

 .
 2. Quantity: The amount produced, expressed
in monetary terms, number of units, or number
of competed activity cycles.
 3. Timeliness: The degree to which an activity
is completed or a result produced, at the
earliest time desirable from the standpoints of
both coordinating with the outputs of others
and of maximizing the time available for other
activities.
 4. Cost of Effectiveness: the degree to which
the use of the organizations resources
 e.g. human, monetary, technological and
material) is maximized in the sense of getting
the highest gain or reduction in loss from each
unit or instance of use of a resource.
 5. Need for supervision: The degree to
which a job performer can carry out a
job function without either having to
request supervisory assistance or
requiring supervisory intervention to
prevent an adverse outcome.
 6. Interpersonal impact: The degree
to which a performance promotes
feeling of self-esteem, goodwill
and cooperation among co-
workers and subordinates
Appropriate weightages
Superiors

Peers Self Appraisal Citizens-Clients

Subordinates
Weightages depend on the Department and
nature of work
 From subordinates (10% to 20%)

 From peer group (only when in a functional peer

network; not for supervisory level officers
functionally not connected) (0% to 10%)

 From customers/clients ( 20% to 30%)

 From superior officers (50% to 70%)

Problems
 Central tendency
Tendency to rate all employees in
the same way
ie. average
 Strictness
rate all subordinates high or low
 Halo effect
 rating based on specific rate
qualities
 That affect the other qualities.
 Affect the rating
 Leniency or severity:
 Leniency or severity on the part of the
rater makes the assessment a subjective.
Subjective assessment defeats the very
purpose of performance appraisal
 Another factors that affect the appraisal are
 Age
 Sex
 Race
 Character etc..
How to avoid appraisal problems?
 Learn the problem
 Use right appraisal tool
 Train supervisors to reduce rating errors
 Diary keeping
 Another method to avoid problem is using the
appraisal software
The appraisal interview
 An interview in which the supervisor and
subordinate review the appraisal and make
plans to remedy deficiencies and reinforce
strengths.
Types of interviews


performance employee objective

satisfactory Promotable Make

development
plans
satisfactory Not Maintain
promotable performance

Unsatisfactory correctable Plan

correction
Performance management
 Managing all elements of the organizational
process that affect how well employees
perform.
 It encompass goal setting.
 Who should appraise?
 Supervisor

It may be direct supervisor

He should give the feedback
 Rating committee

It contains one direct supervisor and 2

or 3 other supervisors
 Peer appraisal

rating by the employees who has same

rank
 Self appraisal

But it will be higher than that rated by

supervisor
 Subordinate
 It is a reverse process
 Superiors are rated with respect to their
work.
 Eg. Feedback given by the students for the
performance of a teacher.
uses
 Determinig individual and group training
needs
 Assessing potential for promotion
 Increasing job satisfaction
 Mutual understanding b/w managers and
subordinates.
 Primary step
 set standards and measure the
performance of the employee..
 Second step
 Give notice to the employee minimum
before 10 day of appraisal
 Third step
 determine the place and date
 References
 HUMAN RESOURCE MANAGEMENT –9th
edition , GARY DESLER

 THE MANAGEMENT OF HUMAN

RESOURSE- 2nd edition , N. RAMASWAMI