Professional Documents
Culture Documents
CHAPTER 1
1. INTRODUCTION
“Performance Appraisal” has been identified as one of the most complex of man-
management activities. It is often a difficult and emotion laden process. Performance
appraisal has become part of organizational life. Every organization has some kind of
evaluating the performance of its personnel.
HISTORY
During and after World War I, systematic performance appraisal was quite prominent.
Credit goes to Walter Dill Scot for systematic performance appraisal technique of “man-to-
man rating system” (merit rating). It was used for evaluating military officers. Industrial
concerns also used this system during 1920s and 1940s for evaluating hourly paid workers.
However, with the increase in training and management development programs from 1950s,
management started adopting performance appraisal for evaluating technical, skilled,
professional and managerial personnel as a part of training and executive development
programmes. With this evolutionary process, the term merit rating had been changed into
employee appraisal or performance appraisal.
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MEANING
Performance Appraisal is a method of evaluating the behaviour of employees in the
work spot, normally including both the quantitative and qualitative aspects of job
performance. Performance here refers to the degree of accomplishment of the tasks the
makeup an individual’s job. It indicates how well an individual is fulfilling the job demands.
Often the term is confused with effort, which means performance is always measured in
terms of results.
TRADITIONAL METHODS
1. CONFIDENTIAL REPORT
A confidential report is a report prepared by the employee’s immediate
superior. It covers the strength and weakness, main achievements and failure, personality
and behaviour of the employee. It is descriptive appraisal used for promotions and
transfers of employees.
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In this technique, the evaluator assigns relative ranks to all the employees in
the same work unit doing the same job. Employees are ranked from the best to the
poorest on the basis of overall performance. The relative position of an employee is
reflected in this numerical bank.
Each employee is compared with all the others, in pair one at a time. The
number of times an employee is judged better than the others determine his rank.
Comparison is made based on overall performance. The number of comparisons to be
made can be decided based on the following: N (N-1)/2. Where N is the number of
person to be compared.
In this technique, the rate is required to distribute his rating in the form of a
normal frequency distribution. This method eliminates the rate bias of central
tendency. It helps to reduce bias involved in straight ranking and paired comparison.
7. CHECK LIST
Under this method, a group of evaluators assess the employees. This group
consists of the immediate supervisor of the employee, other supervisor having close
contact with the employee’s work, head of the department and a personnel expert.
The group determines the standards of performance for the job, measures actual
performance and offer suggestions for improvement in future.
In this method a training officer from the personnel department interviews line
supervisors to evaluate their respective subordinates, the interview prepares in
advance the questions to be asked. By answering these questions the supervisors gives
his opinion about the level of performance of his subordinate, the subordinate work
progress, his strength and weakness, promotion potential etc. The evaluator takes
detailed notes of the answers which are then approved by the concerned supervisor.
These are then placed in the employee personnel service file.
MODERN METHODS
1. Appraisal by results MBO
This method has been evolved by “Peter Drucker”. MBO is potentially a
powerful philosophy of managing and an effective way for operationalizing the
evaluation process.
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1. Environmental constraints
These are several environmental constraints, which may outside the control of worker
and to ignore this fact in judging his performance would be unjust. For example: The quality
of raw material in an organization may deteriorate over a period or the machinery may break
down unexpectedly. As a result, both productivity and quality may suffer. But if selection of
materials and maintenance of machinery are done at higher levels in the organization the
performance appraisal of the worker should not be affected.
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2. Organizational leadership
The style of the top leadership of an organization should also be looked into. It is
nature of leadership at the top, which determines largely the loyalty and commitment of
employees to the goals of an organization for better performance. Employees at every level
become highly performance conscious. Performance appraisal under such conditions is liked
by everybody but in opposite conditions it is considered as an imposition.
3. Interdependence of sub-systems
4. Organizational structure
Initiative, drive and innovation thrive best in a flexible structure. These qualities do
not receive encouragement in a rigid structure. This is because in this type of structure the
authority to approve innovation is often place several levels above the people who innovate.
This makes the proposal pass from person to person and robs the information reaching the
ultimate decision-makers of much of its logic and understanding. What is needed is a direct
relationship between the doer and approver. No matter how strategically wise or strong a
boxer is if he has to call New Delhi to clear each punch during his fight in Udaipur, he is
doomed. In rigid structures, ponderous planning and controls make people give up innovating
and become resigned and bitter. Rather than beg for the acceptance of their innovative ideas
they take their ideas and creativity home and become dead wood at work.
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7. In offering an appraisal, make it plain that this is only your personal opinion of the
facts as you see them.
8. Pass on appraisal information only to those who have good reason to want it.
9. Don’t imply the existence of an appraisal that has not been made.
Do not accept another’s appraisal without knowing the basis on which it was made.
Primary objective:
Secondary objective:
To examine the usefulness of SPAS for the goal setting, to the employees.
To evaluate the impact of the feedbacks of the reporting managers towards the
development of the employees.
To ascertain the effectiveness of review process for the periodical and
continuous improvement in the performance.
To analyse the suitability of the appraisal method being adopted by the
organisation.
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The study has been conducted with respect to effectiveness towards performance
appraisal system existing in the organization.
This study is useful to known whether the goal setting effective or not, feedback is
given in appropriate period so it helps to improves performance, periodical review
helps to known the employee progress, through current appraisal method we can
express our views and thoughts. Therefore, the management can update system with
necessary changes.
These findings of the study can be used for conducting further study.
This study helps in giving suggestion to improve the effectiveness of the organization.
CHAPTER 2
REVIEW OF LITERATURE
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Moulder (2001) states that performance appraisals are valued for defining
expectations and measuring the extent to which expectations are met. She goes on to state
that appraisals can make clear to employees where they are having success and where they
need to improve performance. Moulder indicates that appraisals are useful in setting goals
and in fostering improved communications among work groups and between employees and
supervisors.
Before the 1960’s, performance evaluations were designed primarily as tools for the
organization to use in controlling employees (Eichel and Bender, 1981). Eichel and Bender
go on to state that past performance was used to guide or justify management’s actions in
dealing with the employee. At the time, according to these authors, performance
appraisal provided the basis for salary, retention, discharge, or promotional decisions.
Vroom (1990) states that formal performance appraisal plans can be designed to meet
the following key needs: (a) the organization; (b) the supervisor; and the employee. He
stresses the need for effective evaluation as it can effectively serve these critical areas.
ICMA (2005) states that almost all employees are eager to know how well they are doing in
their jobs, but many dread the meetings in which their performance is to be discussed.
The amount of research regarding the topic “Effectiveness of Performance Appraisal”
is so vast. The topic is literally not new; it is as old as the formation of the organizations.
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Before the early 1980’s, majority of theoretical studies emphasized on revamping the rating
system within the organization.The actions were a great thing to reduce the chaotic of
employee’s performance appraisal (Feldman, 1981). With the passage of the time the methods
and rating system among the employees got enhanced and received an immense appreciation
and attentions of the managers.
Behavioural Observation Scale (BOS) is one of the best techniques utilized by the
managers to arte the employees. The dilemma was on the peak in the 1960s and 1970s. In the
same period couple of new innovated rating scales were introduced, which was Behaviourally
Anchored Rating Scale (BARS) and the Mixed Standard Scale (MSS). The innovations were
dominant one which condensed the errors and improved the observation skills from the
performance appraisal practice. According to the research of Arvey and Murphy (1998), there
were hundreds of thousands of researches had been taken place between the periods of 1950
to 1980, which merely focused on the different types of rating scales.
Landy and Farr (1980) reviewed and researched the methods of performance appraisal
in totally a different manner, in which they understand the rater and process in an
organizational context. Other Performance appraisal reports include the rater characteristics
in their report like race, gender and likeability. After the year 1980 the biasness among the
performance appraisal system occurred outrageously and appraisal had been granted on the
favouritism or race and gender basis rather examined the knowledge, skills and style of the
work of the employee. The accuracy criteria among the performance appraisal system
clutched its grip in the start of the 1980s, where the researches were emphasized on common
psychometric biases which include the diversified rating errors like leniency, central tendency
and halo, which were termed as rating errors in the appraisal method. It has been observed
that the bias free appraisals were inevitably true or more precisely we can say more accurate,
but the concept was totally refused by the research of Hulin in 1982. According to them the
biasfree appraisals were not necessarily accurate (Murphy &Balzer, 1989).
Researches which had been done in the year 1980 were found the most dominating
one which contributed the appraisal system in a great deal. The researches of the1980 also
helped out to clarify some presumed assumptions regarding the performance appraisal, just
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like the work of Murphy (1982). Research has included the measure of employee attitudes
towards the system of performance appraisal and its acceptance (Roberts, 1990). Bernardian
and Beatty (1984), suggested in their research that behavioural and attitudinal kinds of
measure ultimately prove to be better anticipator as compared with the traditional
psychometric variables, which we have declared earlier as well, like leniency, halo and
discriminability. A Performance Appraisal system is totally ineffective in practice due to the
dearth of approval from the end users (Roberts, 1990).
CHAPTER 8
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Appendices
Dear respondent,
Personal details
4) Employee level : FS FL JM MM SM TM
5) Work experience (in years): 5&below 6-10 11-15 16-20 20 & above