Professional Documents
Culture Documents
Structure
15.1 Introduction
15.2 Objectives of Performance Appraisal
15.3 Uses of Performance Appraisal
15.4 Planning the Appraisal
15.5 Approaches to Performance Appraisal
15.6 Components of Performance Appraisal
15.7 Types of Performance Appraisal
15.8 Concerns and Issues in Appraisal
15.9 Steps in the Appraisal Programme
15.10 Methods of Performance Appraisal
15.11 Errors in Performance Appraisal
15.12 Potential Appraisal
15.13 Self Appraisal
15.14 Performance Appraisal Assessment
15.15 Performance Appraisal Guidelines
15.16 Performance Appraisal in Practice
15.17 Performance Review and Feedback
15.18 Strategies to Improve Performance
15.19 Summary
15.20 Self-Assessment Questions
15.21 Case
15.22 Further Readings
15.1 INTRODUCTION
Performance appraisal is a systematic evaluation of present potential capabilities
of personnel and employees by their superiors, superior’s superior or a professional
5 4 from outside. It is a process of estimating or judging the value, excellent qualities or
status of a person or thing. It is a process of collecting, analysing, and Performance and
evaluating data relative to job behaviour and results of individuals. The appraisal Potential Appraisal
system is organised on the principle of goals and management by objectives.
Management decisions on performance utilise several integrated inputs: goals and
plans, job evaluation, performance evaluation, and individual history. It connotes
a two-dimensional concept - at one end of the continuum lies the goals set by the
authority, and at the other end, the performance achieved by the individual or any
given group.
Performance appraisal can be either formal or informal. Usage of former systems
schedule regular sessions in which to discuss an employee’s performance.
Informal appraisals are unplanned, often just chance statements made in passing
about an employee’s performance. Most organisations use a formal appraisal
system. Some organisations use more than one appraisal system for different types of
employees or for different appraisal purposes. Organisations need to measure
employee performance to determine whether acceptable standards of performance
are being maintained. The six primary criteria on which the value of performance
may be assessed are: quality, quantity, timelineness, cost effectiveness, need for
supervision, and interpersonal impact. If appraisals indicate that employees are
not performing at acceptable levels, steps can be taken to simplify jobs, train, and
motivate workers, or dismiss them, depending upon the reasons for poor
performance.
The results of appraisal are normally used to: (1) estimate the overall effectiveness
of employees in performing their jobs, (2) identify strengths and weaknesses in job
knowledge and skills, (3)determine whether a subordinate’s responsibilities can be
expanded, •(4) identify future training and development needs, (5) review
progress toward goals and objectives, (6) determine readiness for promotion, and
(7) motivate and guide growth and development.•
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Key HR Practices They require that manager and subordinate sit down at the start of each work
evaluation period and determine the work to be done in all areas of responsibility and
functions, and the specific standards of performance to be used in each area.
When introducing performance appraisal a job description in the form of a
questionnaire has to be preferred. A typical questionnaire addressed to an individual
would cover the following points:
l What is your job title?
l To whom are you responsible?
l Who is responsible to you?
l What is the main purpose of your job?
l To achieve that purpose what are your main areas of responsibility?
l What is the size of your job in such terms of output or sales targets, number of
items processed, number of people managed, number of customers? What
targets or standards of performance have been assigned for your job? Are there
any other ways in which it would be possible to measure the effectiveness with
which you carry out your job?
l Is there any other information you can provide about your job?
Activity A
What type of executive performance appraisal system exists in your organisation?
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Activity B
Are you aware of any potential appraisal system in practice? If so, give a brief
account of the same.
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Criteria
Periodicity of Appraisal (tick any one):
Quarterly Half-Yearly yearly
Performance Criteria (tick any one):
Activity C
Do you follow periodic performance review and give feedback to the assessee
during the appraisal process.
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Activity D Performance and
Potential Appraisal
What is the strategy of your organisation to improve overall performance of
employees?
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There is great degree of unhappiness all around with performance appraisals. Rarely
does one come across managers who are happy with the appraisal systems in their
organisations. But managers find it difficult to do without them because in the
absence of an appraisal mechanism, howsoever weak it may be, it is difficult to get
work out of people. It is a good mechanism to control people. In practice, a
development-oriented performance appraisal system has to be evolved by combining
certain key elements such as performance analysis, self-appraisal, performance
ratings, and counseling. Voltas have evolved a development-oriented appraisal
system on the basis of their own experiments and experiences over the years.
Larsen & Toubro Limited is the first company in India to introduce a
development-oriented performance appraisal system almost a decade ago as a part
of an integrated human resource development system. The State Bank of India also
introduced such a system in some of its branches covering a large number of
officials. Any organisation interested in changing its appraisal system from
control-oriented confidential reports to a development oriented system is actually
initiating a change in its culture. Such a change is slow, and is likely to be resisted
even if it is good for the employees and, therefore, should be carefully planned
and monitored.
Exhibit 2
Performance Appraisal at Pepsi-Cola International
Pepsi-Cola International (PCI), with operations in over 150 countries, has
devised a common performance appraisal system that focuses on motivating
managers to achieve and maintain high standards of performance. Administrative
consistency is achieved through the use of a performance appraisal system of five
feedback mechanisms - instant feedback, coaching, accountability based
performance appraisals, development feedback, and a human resource plan. The
common system provides guidelines for performance appraisal, yet allows for
modification to suit cultural differences. For example, the first step of instant feedback
is based on the principle that any idea about any aspect of the business or about
an individual’s performance is raised appropriately and discussed in a sensitive
manner. The instant feedback message can be delivered in any culture; the important
thing is not how it is done but that it is done. The purpose of instant feedback is
always to improve business performance, not to criticise cultural styles. Using this
system, PCI tries to balance the cultural and administrative imperatives of
successful managing the performance of a diverse workforce.
15.19 SUMMARY
The performance appraisal system ideally is an organisation designed programme
involving both the organisation and the personnel to improve the capability of both.
The elements of performance management include: purpose, content, method, 7 3
Key HR Practices appraiser, frequency, and feedback. The appraisal process involves determining
and communicating to an employee how he or she is performing the job and
establishing a plan of improvement. The information provided by performance
appraisal is useful in three major areas: compensation, placement, and training and
development. Appraisal helps to improve performance by identifying the strengths
and weaknesses; it helps to identify those with a potential for greater
responsibility; and assists in deciding on an equitable compensation system. The
methods of performance appraisal include rating scale, critical incident, ranking
methods, and management by objectives. Several common errors have been
identified in performance appraisal. Leniency occurs when ratings are grouped at
the positive 7end instead of being spread throughout the performance scale. The
central tendency occurs when all or most employees are ranked in the middle of the
rating scale. The halo effect occurs when a manager allows his or her general
impression of an employee to influence judgment of each separate item in the
performance appraisal. A sound appraisal system involves assessing employee
performance on a regular basis. Performance appraisal can be done by superiors
who rate subordinates, subordinates who rate their superiors, and self-appraisal. A
suitable performance appraisal system has to be designed keeping in view the culture
and requirements of an organisation.
15.21 CASE
Johnson, age 25, has been with the advertising department as a copyman for three
years. His job is to design advertisements for use in newspapers and magazines. He
must work closely with the girls in the art department, with the members of the sales
department, and with the vice president, sales and promotion, who is in charge of the
whole division.
Johnson is an extremely enthusiastic worker with many good ideas. But he has
considerable trouble in dealing with people. He is too impatient with the girls in the
art department and constantly chasing them to finish his own work in time. He makes
it perfectly clear that his ideas are always best while dealing with the people in the
sales department. When the vice president was thinking loud during a
conference, Johnson cut short the speech of the vice president by an aggressive
answer. It was a good answer, and the vice president did not mind, but some of the
other people thought that Johnson had behaved badly. As a manager you are
concerned about the animosity he is creating in your department. As per the
company policy, each employee has to undergo an evaluation interview every six
months. There are no performance evaluation forms.
Discussion Questions
1. What should your strategy be in handling evaluation interview with Johnson?
2. What remedial measures do you suggest to tackle the situation?
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Performance and
15.22 FURTHER READINGS Potential Appraisal
Corner, Bernard J., The Communication of Merit Rating, Personnel, vol. 30,
No. 2, p. 88.
Davis, Keith, Human Behaviour at Work, Tata McGraw-Hill, New Delhi, 1977.
Fisher, M., Performance Appraisals, Kogan Page Ltd., London, 1995.
Pigors, P., and Myers, C.A., Personnel Administration, McGraw-Hill, Tokyo, 1973.
Richard Henderson, Performance Appraisal: Theory to Practice, Reston Publishing
Co., 1980.
Strauss, G., and Sayles, L.R., Personnel - The Human Problems of Management,
Prentice-Hall Inc., Englewood Cliffs, New Jersey, 1960.
Yoder, Dale, Personnel Management and Industrial Relations, Prentice Hall of
India, New Delhi, 1975.
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