PERFORMANCE APPRAISAL

Performance Appraisal is an objective assessment of

an individual’s performance against well defined
benchmarks.
Objectives:
Effect promotions on competence and performance
Confirm the services of probationary employees
Assess Training & Development needs
Decide on pay rise (unorganized sector) where
regular pay scales are not included
Improve communication
Determine whether HR programme’s such as
selections, training & transfers has been effective or
not.
Performance Appraisal &
Competitive Advantage
Improving Performance
Making Correct Decisions
Ensuring Legal Compliance
Minimizing Dissatisfaction & Turnover
Values & Behavior
Strategy & Behavior
A P P R A IS A L P R O C E S S
Objectives of Performance Appraisal

Establish Job Expectations

Design an Appraisal Programme

Appraise Performance

Performance Interview
Performance
Management

Archive Appraisal Data

Use Appraisal Data for Appropriate Purposes

Design Appraisal Programme
Formal v/s Informal
Whose Performance should be rated
Who are the Raters
Immediate Supervisors
Subordinates
Clients
 360 degree system of appraisal
 Rating Committees
 Self- Appraisal
Problems of Rating:
Leniency or Severity
Central Tendency
Halo Error
Rater Effect
Primacy or Recency Effect
Perceptual Set
Performance Dimension Order
Spillover Effect
Status Effect



What should be rated:
Quality
Quantity
Timeliness
Cost effectiveness
Need for Supervision
Interpersonal impact
Community Service
 Methods of Appraisal
Past – oriented Methods
Rating Scales
Checklists
Forced Choice Methods
 In the forced choice method the rater is forced to
select statements which are readymade
Forced Distribution Methods
 It operates under an assumptions that employee
performance level conforms to a normal statistical
distribution.
Critical Incidents Method
Behaviorally Anchored Rating Scales
 The scales represent a range of descriptive statements
of behavior varying from the least to the most
effective.


Field Review Method
 It is an appraisal by someone outside the assessee’s
own department, usually from corporate office or the
HR department
Performance Test & Observation
Confidential Records
Essay Method
Cost Accounting Methods
 Evaluates performance from the monetary returns the
employee fields to his/her organization
Comparative Evaluation Approaches
Ranking Method
Paired – comparison Method

Future – oriented Appraisals
Management by objective
Psychological Appraisals
Focus on future potential and not actual
performance. Industrial Psychologists are
employed for conducting appraisals.
Assessments Centers
It is a central location where managers may
come together to have their participation in
job-related exercises evaluated by trained
observers. Mostly used for executive hiring,
they are now used for evaluating executive
or supervisory potential.
Job Evaluation
Job Evaluation:


 It seeks to determine the relative worth of each

job so that salary differentials can be established.
In job evaluation only jobs are rated unlike in
performance appraisal where only job holders are
rated.
Job Evaluation Performance Appraisal
The job is rated, keeping in view such Employee is rated on his/her
factors as responsibility, qualification, performance
experience, working conditions etc
required to perform the job.

A job is rated before the employee is Evaluation takes place after the employee
appointed to occupy it. has been hired and placed on the job

The purpose is to establish satisfactory The purpose is to effect promotions, offer

wage differentials reward, assess training needs, transfers
etc
 Objectives of Job
Evaluation

Job Analysis

Job Specification
Job
Description

Job Evaluation
Programme

Wage Survey

Employee
Classification
Methods of Job Evaluation:
Non Analytical Methods:
Ranking Methods:
 It is simple, non-quantifiable
Factors Influencing Employee Remuneration:
External Factors:
Labour Market
Going Rate System
Productivity
Cost of Living
Labour Unions
Labour Laws
Society
The Economy
Internal Factors:
Business Strategy
Job Evaluation & Performance Appraisal
The Employee
Business Strategy Market Position & Remuneration Blend of
Maturity Strategy Remuneration

Invest to grow Merging or growth Stimulate High cash with

rapidly entrepreneurship above average
incentive for
individual
performance, Modest
benefits
Manage Earnings- Normal growth to Reward management Average cash with
Protect markets maturity skills moderate incentives
on individual, unit or
corporate
performance,
Harvest earnings- No real growth or Stress on control Standard benefits.
Below-average cash
Reinvest elsewhere decline with small incentive
tied to cost control.
Standard benefits