PERFORMANCE

PERFORMANCEAPPRAISAL
APPRAISAL

PRESENTED BY:-PRIYANKA SAIKIA

ASSAM INSTITUTE OF MANAGEMENT
PGDBM; 4TH TRIMESTER
WHAT IS PERFORMANCE APPRAISAL?

PERFORMANCE APPRAISAL is a process of evaluating an

employee’s performance of a job in terms of its requirements.

Performance appraisal may be defined as a structured formal

interaction between a subordinate and supervisor, that usually takes
AAAA or in which the work
the form of a periodic interview,annual
performance of the subordinate is examined and discussed, with a
view to identifying weaknesses and strengths as well as
opportunities for improvement and skills development.
HISTORY OF PERFORMANCE APPRAISAL

Employee appraisal systems are said to have been used for the first
time during the 1st World War.

The US Army adopted the Man –To- Man rating system for
evaluating military personnel

During the 1920-30 period, rational wage structures for hourly paid
workers were adopted in industrial units. Under this system, the
policy of giving grade wage increment on the basis of merit was
accepted. These employee programs were known as Merit rating
programs.
 TRENDS IN EMPLOYEE APPRAISAL

Item former Emphasis PresentEmphasis

Terminogy Merit Rating Employee appraisal
Performance appraisal

Purpose Determine qualification Development of individual

for promotion, transfer, improved performance
wage increase etc. Emotional security.

Factors Personal traits Reults,Performance

Rated

Technique Rating Scales, statistical Mutual goal setting,

manipulation of data performance standards
 OBJECTIVE OF PA

1. To enable an organisation to maintain an inventory of the number and

quality of all managers and to identify and meet their training aspirations

2. To determine increments ,rewards,ad provide a reliableindex for grater

responsibility

3. To maintain individual and group deveopment by informing the employee

of his performance standards

4. To suggest employee ways of improvement during review period

5. To identify T&D need and its effectiveness

6. To plan career development ,HR planning based on potentialities

 AIMS OF PA

Performance Appraisal is being practiced in 90% of the organizations

worldwide

Typically, Performance Appraisal is aimed at:

· To review the performance of the employees over a given period of time.

· To judge the gap between the actual and the desired performance.
· To help the management in exercising organizational control.
· To diagnose the training and development needs of the future.
. To judge the effectiveness of the other human resource functions of the
organization such as recruitment, selection, training and development
. To reduce the grievances of the employees.
. To reduce the grievances of the employees.
 IMPORTANCE OF PA

PA is an important tool of personal managementIt is a judgement of the

charactritics,traits and performance of employees and has a wide range of
utility.\

I. It unifies the appraisal procedure so that all employees are rated in the
same manner so that ratings are comparable

II. These are information in the form of records which can be produced as
evidence

III. It serves t stimulate and guide employee development

IV. It makes a better employee-emoployer relation through mutual confidence

V. It gives the supervisor a more effective tool for rating their personnel.
 WHAT SHOULD BE RATED

There are SEVEN criteria

1. QUALITY

2. QUANTITY

3. TIMELINESS

4. COST EFFECTIVENESS

5. NEED FOR SUPERVISION

6. INTERPERSONAL IMPACT

7. TRAINING
 THE EVALUATION PROCESS

Establish performance standards

Communicate performance expectation to employees

Measure actual performance

Compare actual P with standards

Discuss with employee

Initiate corrective action

 METHOD OF PERFORMANCE APPRAISAL

There are two types.

Traditional & Modern

Traditional :-

Straight ranking method

Man-to-Man comparison

Paired comparison

Grading

Graphic rating

Checklist

Free essay
Modern Method :-

Assessment Centre

MBO

360 Degree Appraisal

Human asset accounting Method

Behaviouraly anchored rating method

1.MBO

Management by Objectives (MBO) is a process of agreeing upon objectives

within an organization so that management and employees agree to the objectives
and understand what they are in the organization.
The term "management by objectives" was first popularized by Peter Drucker in his
1954 book 'The Practice of Management‘

.
The essence of MBO is participative goal setting, choosing course of actions and
decision making. An important part of the MBO is the measurement and the
comparison of the employee’s actual performance with the standards set. Ideally,
when employees themselves have been involved with the goal setting and the
choosing the course of action to be followed by them, they are more likely to fulfill
their responsibilities.
Features and Advantages

Some of the important features and advantages of MBO are:

Motivation – Involving employees in the whole process of goal setting and
increasing employee empowerment increases employee job satisfaction and
commitment.

Better communication and Coordination – Frequent reviews and interactions

between superiors and subordinates helps to maintain harmonious relationships
within the enterprise and also solve many problems faced during the period.

Clarity of goals
Limitations

1. It over-emphasizes the setting of goals over the working of a plan as a

driver of outcomes.
2. It underemphasizes the importance of the environment or context in which
the goals are set in .In1991 comprehensive review of thirty years of research
on the impact of Management by Objectives, Robert Rodgers and John
Hunter concluded that companies whose CEOs demonstrated high
commitment to MBO showed, on average, a 56% gain in productivity.
Companies with CEOs who showed low commitment only saw a 6% gain in
productivity.
3.It did not address the importance of successfully responding to obstacles
and constraints as essential to reaching a goal. The model didn’t adequately
cope with the obstacles of:
Defects in resources, planning and methodology,
The increasing burden of managing the information organization challenge,
The impact of a rapidly changing environment, which could alter the
landscape enough to make yesterday’s goals and action plans irrelevant to the
present.
4.Tug of war
2.3600 Feedback:

360-degree feedback, also known as multi-rater feedback,

multisource feedback, or multisource assessment Performance-
appraisal data collected from 'all around' an employee—his or
her peers, subordinates, supervisors, and sometimes, from internal and
external customers. Its main objective usually is to assess training and
development needs and to provide competence-related
information for succession planning—not promotion or pay
increase.

The results from 360-degree feedback are often used by the person
receiving the feedback to plan training and development. Results are
also used by some organizations in making administrative decisions,
such as pay or promotion. When this is the case, the 360 assessment is
for evaluation purposes, and is sometimes called a "360-degree
review."
LIMITATION

However, there is a great deal of controversy as to whether 360-degree

feedback should be used exclusively for development purposes, or should
be used for appraisal purposes as well
3.BEHAVIOURALLY ANCHORED RATING SCALE

BARS Behaviorally Anchored Rating scales is a method that combines elements

of the traditional rating scales and critical incidents methods. In order to construct
BARS seven steps are followed as mentioned below

•Examples of effective and ineffective behavior related to job are collected from
people with knowledge of job.
•These behaviors are converted in to performance dimensions.
•A group of participants will be asked to reclassify the incidents. At this stage the
incidents for which there is not 75% agreement are discarded as being too
subjective.
•Then the above mentioned incidents are rated from one to nine on a scale.
•Finally about six to seven incidents for each performance dimensions- will be
used as BARS.

This is by far the best method used for a performance appraisal method
 ADVANTAGES & LIMITATION

Advantages:-

•More accurate

•Clear standards

•Good for providing feedback

BARS technique is more time-consuming and expensive than

other appraisal tools.
4.HUMAN ASSET ACCOUNTING METOD

The HAAM refers to activity devoted to attaching money estimates to

the value of a firm’s internal human organization and its external
customer goodwill.

The current value of a firm’s human organization can be appraised by

periodic measurements of ‘Key causal’ & ‘Intervening enterprise’

Key causal variables

Organization's management policies
Business leadership
Strategies
Skills and behaviors
Decisions

Intervening enterprise variables

Loyalties
Attitudes
Motivations
Communication
Decision making
5.STRAIGHT RANKING METHOD

This is the most commonly used category rating method. The appraiser checks
the appropriate place on the scale for each task listed.it is giving a rank to a
person on his job performance against that of another member of a competitive group
by placing him as number one or two or three in total group.its a merit based rating.

6.PAIRED COMPARISON METHOD

Each employee’s every trait is compared with all others in pairs one at a time using
the same scale for performance. The numbers of times each individual is compared
with another is recorded in a paper .Thes numbers yield the rank order of the entirs
group.It makes judgement easier than ordinary ranking method.

It is not suitable when group is large.

7.GRADING METHOD

The rater considers certain features such as analytical

ability,self;expression,job knowledge, leadership etc. and marks them
accordingly to a scale.
The actual performance is then compared with these grades and he is
allocated the grade which best describes his performance.
.
8.GRAPHIC OR LINEAR RATING

The factors included in this rating system are Employee

Characteristics & Employee Contribution.
Employee Characteristics are:-
Initiative
Leadership
Dependability
Attitude
Enthusiasm
Loyalty
Creative ability
Emotional ability
Decisiveness
Employee Contribution:-
Quantity and quality of work
The responsibility assumed
Specific goals achieved
Regularity of attendance
Versatility etc.
These traits are evaluated to a continuous scale.
9.FORCED CHOICE DISTRIBUTION METHOD

It was evolved after a great deal of research conducted for the military
services during World War II

It attempts to correct a rater’s tendency to give consistently high or

low ratings to all the employees.

Eg-The employee is

a) Is puncual and careful

b) Is a hard worker and co-operative

c) Is dishonest and disloyal

d) Is disinterested in work.

The rater is asked to indicate which of the four phrases are most and
least descriptive of the employee.
10.CHECKLIST METHOD

Under this a rater does not evaluate employee performance ,he supplies reports
about is and the final rating is done by the personal department. A series of
questions are presented concerning an employee and checks to indicate if the
answer to a question about an employee is positive or negative.

Eg:-

1. Is the employee reall interested in his job ? yes/no

2. Does he show uniform behaviour to all ? yes/no

It is difficult to assemble ,analyse, and weigh a number of statements about

employee characterstics and contribution.
11.FREE EASSAY METHOD

Under this method ,the supervisor makes a free form,open-ended appraisal

of the employee in his own words and puts down his impression about the
employee.

No attempt is made to evaluate the employee in quantitative manner

DRAWBACKS

It’s a subjective evaluation

No common criteria for evaluation

Supervisor is required to devote considerable time and thought

12.GROUP APPRAISAL METHOD

Under this method,employees are rated by a group.it consists their

supervisor and three or four other supervisors who have some
knowledge of their performance.

Group discusses the standards and rate accordingly

Very simple

Devoid of bias

Time consuming
PROBLEMS OF APPRAISAL

1. Hallo effect

2. Leniency or strictness or constant error

3. The central tendency problem

4. Similarity error

5. Social differentiation
APPRAISAL SYSTEMS OF FEW COMPAANIES IN INDIA

1. ONGC

With a view to bringing about a performance driven culture within the

organization, ONGC has an annual objective oriented performance
appraisal system, which is implemented uniformly across the
Organization

The appraisal system used in ONGC is the oldest one.It is a three tier system where
an employee is evaluated in three stages by

By the Reporting Officer under whom employee is working.

 
By the Reviewing Officer
 
By the accepting officer

Self appraisal is also there.

2.NRL

The appraisal system implemented in NRL is CR.

At first KPI s are fixed

Then each employee is appraised by his DMGR

Here employees are appraised only by the superiors

But very soon the appraisal system of NRL is supposed to be changed

from CR to 360 degree appraisal.
3.IOC, 4.HPCL 5.BPCL 6.NTPC

The PMS used by M/s IOC, HPCL, SAP are IT enabled

PMS in BPCL ad NTPC are paper based

M/s IOC follows a no pen – no paper approach only for executives.

At IOC and at HPCL, the IT enablement has been achieved using separate
servers with offline linkages to HR Master data. The package used is
customer specific with in house / consultants support.
At IOC, the database used is Oracle and Java is the programming language,
package developed by third party solution provider. In absence of ERP
payroll, the performance based incentives are paid by extracting information
from data base.
7 DABUR INDIA LIMITED

In Dabur India Limited they have the system of performance appraisal of their
employees.

The main objective of this performance appraisal system is to evaluate the

performance, promote their employees and to arrange for their various training
programmes if they require for enhancing their skills in their respective areas and
in contribution enhancement.

Employees are evaluated by how well they accomplish a specific set of objectives
that have been determined to be critical in the successful completion of their job.
This approach is frequently referred to as

management by objectives.
8.MARUTI UDYOG

The company has introduced a unique 360-degree feedback system,

starting with its senior leadership from the year 2007.

It is for the top management such as chief general managers and general
managers, whose performance is assessed based on feedback from their
peers and junior management employees within the same department.

Till lthe year 2006, their performance was being appraised only by the
Directors and the
9. PERFORMANCE APPRAISAL ANALYSIS OF BPO

INDUSTRY

In most of the BPO indusstry ithe PA method which is being

used is

MBO
 
THANK YOU