Performance Appraisal
Dr. Sonia Nongmaithem
RGIIM Shillong
Concept of Performance Appraisal
• Performance appraisal refers to an assessment of an
employee’s performance, including the measures of:
Productivity, which quantifies the outputs and inputs of an
employee and expresses the two as a ratio. Generally, the ratio
is expressed as output to input;
Effectiveness, which determines the relationship of an
employee’s outputs to organizational goals and objectives;
Quality, which examines an output or the process by which
an output is produced. Quality is indicated by attributes such as
accuracy (or error rate), thoroughness, and complexity; and
Timeliness, which evaluates the time, involved producing
an appropriate output.
Performance Appraisal
• “Performance Appraisal is the process of evaluating and
managing both the behaviour and human outcomes in
workplace”.
(Carrell, Elbert and Hatfield)
• “Performance Appraisal may be defined as any procedure that
involves (1) setting work standards; (2) assessing the
employee’s actual performance relative to these standards;
and (3) providing feedback to the employee with the aim of
motivating that person to eliminate performance deficiencies
or to continue to perform above par”.
(Dessler)
Performance appraisal requires the following:
• Clearly defined organizational goals and
objectives;
• Individual or team objectives or management
targets;
• Properly defined standards of performance and
the skills and competency required to meet them;
• Regular formal review of progress; and
• Systems of feedback and approvals for
improvement.
Objectives of Performance Appraisal
• The major objectives of performance appraisal are as
follows:
1. Setting and monitoring performance objectives
2. Feedback on individual performance
3. Provides basis for self-evaluation
4. Rationale basis of HR related decisions
5. Identifying potentialities
6. Maintaining fairplay and justice
7. Increases individual accountability and ownership
Benefits of Performance Appraisal
Determining whether the set targets have been achieved
and whether laid down standards have been adhered to;
Compensation according to achievement;
Detection and elimination of problem areas in jobs or the
work environment;
Placement of employees according to their knowledge,
skill and ability; and
Identification of excellent performers with the aim of
rewarding people who are ready for promotion;
Identification of those who need some type of support to
improve and increase their work performance.
Appraisal techniques
Management-by-objectives
This technique involves the following processes-
• Identifying common goals jointly by the superior and the sub-
ordinate;
• Establish clearly and precisely defined statements of objectives;
• Decide the criteria for measurement of objectives by mutual
agreement;
• Performance of the job;
• Need based intermittent review of performance;
• Measurement of objectives;
• Periodical review and taking corrective action when required;
• Preparation for future objectives
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Merits
• One of the strengths of the MBO method is the clarity of
purpose that flows from a set of well-articulated
objectives.
• Establishes link between organizational and individual
performance.
• Easy to implement and measure as the criteria and
parameters are set clearly in the beginning.
• Measures performance and not personality of employees.
• Employees are judged according to real outcomes, and
not on their potential for success, or on someone's
subjective opinion of their abilities.
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Demerits
• The extensive amount of time is involved in the
process, especially on the part of the manager who
has to deal with a large number of subordinates
directly under his control.
• Sometimes, conflict can arise as a manager would
always like to set higher goals whereas the
subordinate would be inclined to set lower targets so
that he may be able to achieve them easily and be
rated as a good performer.
• There is crucial criticism about its sole emphasis on
results rather than on quality traits in the performer.
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360 degree appraisal method
• 360-degree feedback is a full circle system of
obtaining information from peers, subordinates, and
internal and external customers, about the employee's
performance.
• 360-degree assessment is based on the assessment of
an individual's management styles, competencies and
behaviour by colleagues horizontally and vertically
by involving his boss, peers and direct reports in the
organization.
Prerequisites
• Top management support.
• Confidence of employees on the appraisal
methodology.
• Objectives need to be measurable with
performance requirements clearly stated.
• A detailed plan of implementation.
• Collaboration between superior and subordinates.
• Some prior experimentation and positive
experiences.
Procedure
• Questionnaire is developed to measure different
dimensions of job performance such as communication,
leadership teamwork, judgement, etc.
• Ensure confidentiality
• Provide training/orientation to all employees
• Administer the questionnaire
• Analysis of data which may include performance
dimension summary, summary- performance vs.
expected, etc.
• Develop and distribute results.
Merits
• Excellent employee development tool
• More objective as it is a multi-rater system
• Legally more defensible.
Demerits
• Time consuming and costly
• Keeping confidentiality may pose challenge in small
organizations.
• Sensitive to organizational culture.
Thank you
