You are on page 1of 40

Table of Contents










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,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.

Performance appraisal is a systematic evaluation of present potential capabilities of personnel
and employees by their superiors, superior’s superior or a professional 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 evaluating data relative to job behaviour and results of
individuals. The 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, time lineness, 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.


Performance appraisal plans are designed to meet the needs of the organisation and the
individual. It is increasingly viewed as central to good human resource management. This is
highlighted in Cumming’s classification of performance appraisal objectives. According to
Cummings and Schwab (1973), the objectives of performance appraisal schemes can be
categorised as either evaluative or developmental. The evaluative purpose have a historical
dimension and are concerned primarily with looking back at how employees have actually
performed over a given time period, compared with required standards of performance.
The developmental performance appraisal is concerned, for example, with the identification of
employees’ training and development needs, and the setting of new targets.
The broad objectives of performance appraisal are:
1. To help the employee to overcome his weaknesses and improve his strengths so as to enable
him to achieve the desired _performance.
2. To generate adequate feedback and guidance from the immediate superior to an employee
working under him.
3. To contribute to the growth and development of an employee through helping him in realistic
goal setting.
4. To provide inputs to system of rewards (comprising salary increments, transfers, promotions,
demotions or _terminations) and salary administration.
5. To help in creating a desirable culture and tradition in the organisation.
6. To help the organisation to identify employees for the purpose of motivating, training and
developing them.
7. To generate significant, relevant, free, and valid _information about employees.
In short, the performance appraisal of an organisation provides systematic judgments to backup
wage and salary administration; suggests needed changes in one’s behaviour, attitudes, skills, or
job knowledge; and uses it as a base for coaching and counseling the individual by his superior.
Appraising employee performance is, thus, useful for compensation, placement, and training and
development purposes.


The appraisal systems do not operate in isolation; they generate data that can contribute to other
HRM systems - for example to succession planning and manpower planning.Some of the
common uses of appraisals include:
 Determining appropriate salary increases and bonuses for workers based on performance
 Determining promotions or transfers depending on the demonstration of employee
strengths and weaknesses.
 Determining training needs and evaluation techniques by identifying areas of
 Promoting effective communication within organisations through the interchange of
dialogue between supervisors and subordinates.
 Motivating employees by showing them where they stand, and establishing a data bank
on appraisal for rendering assistance in personnel decisions.
Organisations use performance appraisals for three purposes: administrative, employee
development, and programme assessment. Programme appraisal commonly serve an
administrative purpose by providing employers with a rationale for making many personnel
decisions, such as decisions relating to pay increases, promotions, demotions, terminations and
transfers. Valid performance appraisal data are essential to demonstrate that decisions are based
on job related performance criteria. An employee’s performance is often evaluated relative to
other employees for administrative purposes, but may be assessed in relation to an absolute
standard of performance. Performance appraisal for employee development purposes provides
feedback on an employee’s performance. The intent of such appraisals is to guide and motivate
employees to improve their performance and potential for advancement in the organisation.
Appraisal data can also be used for employee development purposes in helping to identify
specific training needs of individuals. Programme assessment requires the collection and storage
of performance appraisal data for a number of uses. The records can show how effective
recruiting, selection, and placement have been in supplying a qualified workforce. Performance
measures can be used to validate selection procedures and can also be used as”before” and
“after” measures to determine the success of training and development programmes. In brief, the
various uses of performance appraisal can be classified into two broad categories. One category
concerns the obtaining of evaluation data on employees for decision-making for various
personnel actions such as pay increases, promotions, transfers, discharges, and for selection test
validation. The other main use is for employee development including performance improvement
training, coaching, and counseling.
A meaningful performance appraisal is a two-way process that benefits both the employee and
the manager. For employees, appraisal is the time to find out how the manager thinks they are
performing in the job. For a manager, a formal appraisal interview is a good time to find out how
employees think they are performing on the job. The planning appraisal strategy has to be done:
Before the appraisal
1. Establish key task areas and performance goals.
2. Set performance goals for each key task area.
3. Get the facts.
4. Schedule each appraisal interview well in advance.
During the appraisal
1 Encourage two-way communication.
2. Discuss and agree on performance goals for the future.
3. Think about how you can help the employee to achieve more at work.
4. Record notes of the interview.
5. End the interview on an upbeat note.
After the appraisal
1. Prepare a formal record of the interview.
2. Monitor performance.
George Odiorne has identified four basic approaches to performance appraisal.
Personality-based systems: In such systems the appraisal form consists of a list of personality
traits that presumably are significant in the jobs of the individuals being appraised. Such traits as
initiative, drive, intelligence, ingenuity, creativity, loyalty and trustworthiness appear on most
such lists.
A typical questionnaire addressed to an individual would cover the following points:
 What is your job title?
 To whom are you responsible?
 Who is responsible to you?
 What is the main purpose of your job?
 To achieve that purpose what are your main areas of responsibility?
 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?
 Is there any other information you can provide about your job?


The components that should be used in a performance appraisal system flow directly from the
specific objectives of appraisal. The following components are being used in a number of Indian
1. Key Performance Areas (KPAs) / Key Result Areas (KRAs)
2. Tasks/targets/objectives; attributes/qualities/traits
3. Self appraisal
4. Performance analysis
5. Performance ratings
6. Performance review, discussion or counseling
7. Identification of training / development needs
8. Ratings / assessment by appraiser
9. Assessment / review by reviewing authority
10. Potential appraisal.


There are two types of performance appraisal systems which are normally used in organisations:
 close ended appraisal system,
 open ended appraisal system.
In the close ended appraisal system, commonly used in government organisations and public
enterprises, a confidential report is submitted on the performance of the employee. Only where
an adverse assessment is made against an individual, the concerned individual is informed about
the same. The main shortcoming of this system is that an individual is not informed about his/her
inherent strengths and weaknesses and, therefore, is not given an opportunity to respond to the
assessment made on him/her. The employees are, therefore, in a constant dilemma as to how
their performance is viewed by the management. In the open ended appraisal system, unlike in
the close ended system, the performance of the individual is discussed with him, and he is ranked
in a five or ten point rating scale. The company uses this tool primarily for rewarding a good
performer or for other considerations like promotions. The main weakness of this system is that
all the employees are ranked in a particular scale, and whereas the good performers are
rewarded, there is no concerted effort to motivate the average performers in performing better.
Another weakness of the grading system is that the appraisal may turn out to be more subjective
in nature due to insufficient data maintained on the individual. This system also leads to
unnecessary comparisons made on different individuals performing similar jobs. Performance
appraisal can be a closed affair, where the appraises do not get any chance to know or see how
they have been evaluated; or it can be completely open, where the appraises have the opportunity
of discussing with their superiors during the evaluation exercise.


Traditional Performance Appraisal

Modern Performance Appraisal Methods

 Ranking Method

 Paired Comparison

 Grading Scale
 Management by Objectives (MBO)
 Forced Distribution Method
 Behaviourally Anchored Rating Scales (BARS)
 Forced Choice Method
 Assessment Centre Method
 Checklist Method
 360-Degree Appraisal
 Critical Incidents Method
 Human Asset (Cost) Accounting Method
 Graphic Scale Method

 Essay Evaluation Method

 Field Review Method

 Confidential Method
traditional performance rating, newer-rating method, and result-oriented appraisal. A brief
description of each is as follows:
(a) Traditional Performance Rating: Traditional rating involves a completion of a form by the
immediate supervisor of the individual who is being evaluated. In some cases, attempts are made
to accomplish the rating by a committee consisting of the immediate supervisor, the supervisor’s
superior and one or two more officers of the company who are familiar with the rates. Although
ratings by the committee bring several viewpoints together and overcome the superior’s bias, if
any, they are highly time-consuming. The conventional rating scale form incorporates several
factors, such as, job knowledge, judgment, organising ability, dependability, creativity, dealing
with people, delegation, and leadership. The rating is assigned by putting a tick mark
horizontally. Frequently, descriptive phrases are given in the form to guide the rater while
evaluating the rates. This method is very simple to understand and easy to apply. On the basis of
ratings on specific factors, it is possible to identify areas in which the individual requires further
development. The ratings on specific factors can be summated to obtain a composite
performance score. The merit-rating scales are frequently criticised from the standpoints of
clarity in standards, differing perceptions, excessive leniency or strictness, the central tendency,
the halo effect, and the impact of an individual’s job. The basic criticism of the traditional
performance rating is concerned with its emphasis on personality traits instead of job
performance. Such rating is highly subjective in the absence of objective standards.Other
criticisms of traditional performance rating relates to: First, there is a divergence of opinion
among raters as to what is meant by such standards as “unsatisfactory”, “good” and so on.
Second, there may be divergent perceptions and accordingly, different standards of judgments
among the raters. Third, the raters may be susceptible to excessive leniency or strictness error.
Fourth, there is an error of central tendency involving a cluster of ratings near the middle of the
scale. Fifth, there is a chance of the occurrence of a halo effect. Sixth, there is a tendency on the
part of the raters to assign high ratings to individuals holding high paid jobs.
(b) Results-Oriented Appraisal: The results-oriented appraisals are based on the concrete
performance targets which are usually established by superior and subordinates jointly. This
procedure has been known as Management by Objectives (MBO). MBO: The definition of
MBO, as expressed by its foremost proponent, Dr. George S. Odiorne, is: “Management by
objectives is a process whereby the superior and subordinate managers of an organisation jointly
identify its common goals, define each individual’s major areas of responsibility in terms of the
results expected of him, and use these measures as guides for operating the unit and assessing the
contribution of each of its members.” Much of the initial impetus for MBO was provided by eter
Drucker (1954) and by Douglas McGregor (1960). Drucker first described management by
objectives in 1954 in the Practice of Management. Drucker pointed the importance of managers
having clear objectives that support the purposes of those in higher positions in the organisation.
McGregor argues that by establishing performance goals for employees after reaching agreement
with superiors, the problems of appraisal of performance are minimized. MBO has many
benefits, since it:
1. Provides a way for measuring objectively the performance of subordinates.
2. Co-ordinates individual performance with company goals.
3. Clarifies the job to be done and defines expectations of job accomplishment.
4. Improves superior-subordinate relationships through a dialogue that takes place regularly.
5. Fosters increased competence, personal growth, and opportunity for career development
6. Aids in an effective overall planning system.
7. Supplies a basis for more equitable salary determination, especially incentive bonuses.
8. Develops factual data for promotion criteria.
9. Stimulates self-motivation, self-discipline and self-control.
10. Serves as a device for integration of many management functions.
MBO has certain potential problems, such as:
1. It often lacks the support and commitment of top management.
2. Its objectives are often difficult to establish.
3. Its implementation can create excessive paperwork if it is not closely monitored.
4. It concentrates too much on the short run at the expense of long-range planning.
5. It may lead to excessive time consuming.
Traditionally, in most performance evaluations a supervisor evaluates the performance of
subordinate. Recently, a new approach has been enunciated by the western management gurus,
which is known as 360 degree appraisal - a performance management in which people receive
performance feedback from those on all sides of them in the organisation - their boss, their
colleagues and peers, and their own subordinates, and internal and external customers. The list
can grow to include vendors and consultants, human resource professionals, suppliers and
business associates, even friends and spouses. The 360 degree feedback refers to the practice of
using multiple raters often including self-ratings in the assessment of individuals. Thus, the
feedback comes from all around. It is also a move towards participation and openness. Many
American companies are now using this 360 degree feedback. Companies that practice 360
degree appraisals include Motorola, Semco Brazil, British Petroleum, British Airways, Central
Televisions, and so on. Barring a few multinational companies, in India this system of appraisal
is uncommon.
This form of performance evaluation can be very beneficial to managers because it typically
gives them a much wider range of performance-related feedback than a traditional evaluation.
That is, rather than focusing narrowly on objective performance, such as sales increase or
productivity gains, 360 degree often focuses on such things as interpersonal relations and style.
Of course, to benefit from 360 degree feedback, a manager must have thick skin. The manager is
likely to hear some personal comments on sensitive topics, which may be threatening. Thus, a
360 degree feedback system must be carefully managed so that its focus remains on constructive
rather than destructive criticism.
Balance Score Card: The Balance Score Card (BSC) creates a template for measurement of
organisational performance as well as individual performance. It is a measurement based
management system, which enables organisations to clarify vision and strategy before initiating
action. It is also a monitoring system that integrates all employees at all levels in all departments
towards a common goal. BSC translates strategy into performance measures and targets, thus
making it operational and highly effective. It helps cascade corporate level measures to lower
level so that the employees can see what they must do well to improve organizational
Effectiveness and helps focus the entire organisation on what must be done to create
breakthrough performance. BSC was introduced in 1992 by Dr. Robert Kaplan and David Nortan
and has been successfully adopted by numerous companies worldwide. Assessment Centre
Experts from various departments are brought together to evaluate individuals or groups
specially their potentials for promotions.
The quality of an appraiser is much more crucial than the appraisal methods. It is desirable to
make the immediate superior a party to the appraisal programme. The assessment can be
accomplished by an individual or by a combination of the immediate superior, other managers
acquainted with the assessee’s work, a higher level manager, a personnel officer, the assessee
himself, and the assessee’s subordinates. Training of appraisers has been largely stressed as a
measure to improve performance appraisals. Appraisers can be trained with a view to improving
their ability to evaluate subordinates and discuss evaluations with them effectively.
The following questions can provide an assessment of performance appraisal system:
1. What purposes does the organisation want its performance appraisal system to serve?
2. Do the appraisal forms really get the information to serve the purposes?
3. Are the appraisal forms designed to minimise errors and ensure consistency?
4. Do the processes of the appraisal serve the purpose of effective communication between the
appraiser and the _appraisee?
5. Are supervisors rewarded for correctly evaluating and developing their employees?
6. Are the evaluation and developmental components separated?
7. Are superiors relatively free from task interference in doing performance appraisal?
8. Are the appraisals being implemented correctly?
The following questions serve as guidelines for assessing the end-product of performance
1. Did the appraisal session motivate the subordinate?
2. Did the appraisal build a better relationship between the supervisor and the subordinate?
3. Did the subordinate come out with a clear idea of where he or she stands?
4. Did the superior arrive at a fairer assessment of the subordinate?
5. Did the superior learn something new about the subordinate?
6. Did the subordinate learn something new about the superior and pressures he or she faces?
7. Does the subordinate have a clear idea of what corrective actions to be taken to improve
his/her own performance?
Traditionally appraisals are carried out by the supervisors of the employees. Some companies do
follow self appraisal and compare the same with the traditional appraisal of the supervisors. A
new approach has been recently enunciated by the western management gurus, which is known
as 360 degree appraisal whereby appraisals are required to be carried out not only by the
supervisors, but also by those supervised (subordinates) and peers. This approach also needs a re-
look in the context of leadership concepts being practiced universally. If one requires to be
appraised on how well he performs the leadership role, the appraisal should originate from the
followers (bottom to top approach) and not from their supervisors alone.
While the supervisors can appraise, on the performance standards, goals, targets, achievements,
the leadership attributes need to be appraised only by those being supervised. This argument is
quite valid for higher level executives including CEOs. Therefore, all the three approaches, top-
bottom, bottom-top and peer level appraisal will be very relevant. Perhaps, appropriate
weightage is required to be assigned for appraisals being carried out in the 360 degree system,
which is yet to take off seriously in many organisations.
It is quite disappointing to note that appraisals are not being carried out with the due importance
and seriousness they deserve though the systems provide scope for periodic and timely
appraisals. Normally appraisals are being carried out once a year or at the most twice a year as
per the existing practice. Many organisations do follow monthly and quarterly appraisals for
management trainees till they are confirmed, and follow the by-annual or annual appraisal
system thereafter.Appraisal is a continuous process, to be scientifically carried out day in day
out, if one has to seriously carry out appraisals.


1. Identifying job responsibilities and duties and performance dimensions,
standards and goals.
2. Prioritizing and weighing performance dimensions and performance goals.
3. Determining appropriate methods for appraising performance.
4. Developing suitable appraisal instruments and scoring devices.
5. Establishing procedures that enhance fair and just appraisals of all
6. Providing performance feedback to all employees.
7. Relating observed and identified performance to the rewards provided by
8. Designing, monitoring and auditing processes to ensure proper operation of
the system and to identify areas of weakness.
9. Granting employees opportunities for appeal whenever and wherever such
action is appropriate.
10. Training of employees in all phases of the appraisal system.
The basic issues addressed by performance appraisal are:
 What to appraise?
 How to appraise fairly and objectively?
 How to communicate the appraisal and turn the total process into a motivator?
 How the performance appraisal results can be put to good use?
 How to implement the performance appraisal system smoothly?


Appraisee Survey

1. Expectations from Appraisal System :

Respondents were asked to rank the various options according to their preference. (Rank
1 being most preferred and rank 6 being least preferred). Then scoring was given on the
basis of ranks. 1 mark was allotted to rank 1, 2 marks for rank 2 and so on.

Particular Score Overall Rank

Salary Administration and Benefits 87 1
Determination of promotion or transfer 109 2
Assistance in goal 228 3
Guideline for training plan 254 4
An insight into your strengths and weakness 312 5
Decision to layoff 354 6

From the above table it can be seen that employees expect “Salary Administration and
Benefits” to be the main reason for conducting a Performance Appraisal. “Decision to
layoff” is of least importance as per the appraisee.

2. Awareness about Responsibilities :

Awareness about
No Responsibilities


From the graph it can be seen that majority of employees are aware about their
responsibilities, which implies that the appraisers have efficiently communicated to the
appraisees all the parameters that will be taken into account during appraisal.
3. Satisfaction Level among appraise regarding Appraisal System :

Satisfaction Level
5% 2%
Fully Dissatisfied
23% 28%
Partially Dissatisfied
Partially satisfied
Fully satisfied

From graph it can be seen that majority of the respondents are satisfied with the appraisal
system. Only a meager 30% were dissatisfied with the Performance Appraisal programs.
4. Awareness about performance ratings :

Awarness about Performance



This clearly shows that majority of the employees are not aware about the performance
ratings that are taken into account while conducting a performance appraisal.
5. Alowing Self ratings :

Self Rating Should be allowed


From graph it can be seen that majority of respondents want self rating to be a method of
conducting the appraisals .

6. Chance to rate your own performance

Rate your own performance



From the graph we can see that majority of the employees are not given a chance to rate
their own performance in the organization.
7. Timing of Appraisals

Timing of Appraisal
2% 3%


84% Half Yearly


This shows that most of the organisations conduct their Performance Appraisal programs
annually. A very small percentage of the organisations conduct Performance Appraisals
on a half yearly basis. The share of the quarterly and monthly appraisals are extremely

8. Credibility of Appraiser

Credibility of Appraiser



This shows that according to the employees/appraisees the credibility of the appraiser is
extremely important and it has an effect on the overall Performance appraisal program.
9. Complaint channel for employees

Complaint Channel for


73% No

This shows that there is no proper complaint channel existing in the organisations for the
employees who are dissatisfied with the performance appraisal system.

10. Standards communicated to employees

Standards Communicated to


From this it can be seen that there is a clear majority among the employees who say that
the standards on the basis of which the performance appraisal is carried out is not
communicated to the employees before hand.
11. Performance Appraisal

Performance Appraisal
9% 0% Immediate
Peer appraisal

91% Rating committee

Self Rating

Almost all the Performance Appraisals are carried our by the Immediate Supervisor in
these organisations. In very few organisations, Rating committees carry out the
performance appraisals. None of the organisations use Peer Appraisals, Appraisals by
subordinates and Self rating as a method of Performance Appraisal.

12. Clear understanding of Appraisee’s job

Clear understanding of
Appraisee's Job

77% No
This shows that the performance Appraisal programs are successful in giving a clear
understanding of the appraisee’s job to both appraiser and appraisee.

13. Objectives of Appraisal System

Objective of Appraisal System

50% 50%

From the figure we can derive that the objective for conducting the Appraisal system is
clear only to half of the employees. The remaining half are not clear about the objective
for which the Performance Appraisal is carried out.

14. Good communication between top management and business goals

Good communication
between Top management
and Business goal

78% No
This shows that the appraisal systems do not provide a good communication flow of the
top-management plans and business goals to the staff below.
15. Comments and suggestions to be considered

Comments and suggestion to

be considered


Almost all the employees expect that their comments and suggestions should be taken
into consideration while conducting the Performance Appraisal.
16. Post Appraisal interview

Post Appraisal Interview


70% No
As per the response from the employees we can see that there is no interview conducted
after the appraisal program for majority of the employees.

Appraiser Survey

1. Purpose of Appraisal

Purpose of Appraisal System


An insight into your strengths and weakness 81

Guideline for training Plan 69

Assistance in goal 72

Decision on layoff 42

Determination of promotion or transfer 24

Salary Administration and Benefits 27

Respondents were asked to rank the various options according to their preference. (Rank
1 being most preferred and rank 6 being least preferred). Then scoring was done on basis
of these ranks. 1 mark was allotted to rank 1, 2 marks for rank 2 and so on. Then the total
score for each purpose was calculated and overall ranking was given.
Particular Score Overall Rank
Determination of promotion or transfer 24 1
Salary Administration and Benefits 27 2
Decision to layoff 42 3
Guideline for training plan 69 4
Assistance in goal 72 5
An insight into your strengths and weakness 81 6

From table it can be seen that appraiser considers “Determination of promotion or

transfer” & “Salary administration and Benefits” as two important factors for conducting
an Appraisal.
2. Appraisal System

Appraisal System
0% 0%
13% 1
60% 4

In this question appraiser was asked to rate how helpful the appraisal system is, from the
graph it can be seen that majority of appraisers have rated 5,4 & 3 which implies that
Performance Appraisal system is very helpful in Planning their work. Also most of the
appraisers are satisfied with the appraisal system.

3. Support from subordinate

Support from Subordinate


This question was asked to find out how helpful appraisal system is in communicating the
support that apprasier needs from appraisee. From results it is seen that the performance
appraisal system is very helpful in communicating the support and help needed by the
appraiser from the appraisee.

4. Type of Appraisal System

Type of Appraisal System

0% 14% Assessment centre


73% BARS

360 degree

From results its clear that majority of companies prefer to use “360 degree feedback”
system for Performance Appraisal. As 360 degree feedback gives feedback of appraisee
from everyone interacting with him, it is more reliable and hence most preferred.

5. Performance Appraisal criteria

Performance Appraisal
20% 20% outcome criteria
Qualitative process
process criteria

From results we can see that Qualitative Process is considered as the most important
criteria for which the Performance appraisal programs are carried out, which shows that
companies consider Qualitiy of product & service and Customer satisfaction as most
important factors.

6. Timing of Appraisals

Timing of Appraisal
0% 0%
13% Annual
Half Yearly
87% Monthly

From graphs we can see that most of companies conduct appraisals on annual basis.
Some companies conduct quaterly also.

7. Effect of poor Appraisal System

Effect of Poor Appraisal
0% Retention

It can be seen from results that most of the employees get De-motivated because of a
poorly conducted appraisal. To some extent employees dont coordinate with their team
members. Thus resulting in reduction of output.

8. Communication between top management and staff

Good Communication
between Top Management
and Staff

100% No

All appraisers totally agree that performance appraisal helps in communicating the top
management plans and business goals to staff at lower level.

9. Insight to Apprasiee’s strength and weakness

Insight into Appraisee's
Strength and weakness


It is evident from the results that performance appraisal system doesn’t help the appraiser
in understanding strength and weakness of apraisee.

10. Appraisee’s comment and suggestion

Appraisee's comment &



87% No

From the results it can be seen that appraisee’s comments and suggestion are not taken
into consideration before Performance Appraisal. Performance Appraisal system is
designed by appraiser without consulting appraisee.
11. Performance Appraisal

Performance Appraisal
0% Immediate
Peer appraisal

100% Rating committees


It is evident from the results that performance appraisal is conducted by the Immediate
Supervisor in all the companies.

12. Understanding of Apprasiee’s Job

Understanding of Appraisee's


From this it is clearly seen that according to appraiser there is a clear and joint
understanding of the appraisee’s job.
13. Standards for Performance Appraisal

Standards for Performance



87% No

From results it is evident that Performance appraisal standards are very well
communicated to Appraisee before the Appraisal is carried out.

14. Self rating in Performance Appraisal

Self Rating in Performance


From results it can be clearly seen that the Appraisee is not given a chance to rate his own

15. Action after Performance Appraisal

Action after Performance



This shows that most of the companies act upon the results of their Performance Appraisal


 ………….has separate appraisal system for each level of employees. These appraisal
systems differ on the factors on which a person is rated and the nature of duties
handled by him.
 …………it is seen that the employees are not satisfied with the way they are
appraised or they haven’t been appraised properly. For this matter, almost all the
companies have interview and discussion.
 The frequency of appraisal in all organisations is yearly. Where appraisal is based on
Key Result Areas, a mid-term review is also undertaken. This data is then compiled
and the final appraisal is conducted at the end of the year.
 In most of the cases the immediate supervisors is the appraiser but sometimes it is
also the HR department or the HOD.
 All organizations have goal setting as part of appraisal. The performance is evaluated
against these targets.
 On an average 85% of the employees in an organization are motivated by
performance appraisal.
 …………….use the data that is maintained for every employee to compare the
performance over a period of time. Some companies also use this data for making
decision regarding job rotation, succession planning. Very few companies make use
of this data for retrenchment as proof of poor performance.
 A good deal of respondents felt that appraisal is likely to be more successful when it
is linked with financial and semi-financial incentives like promotion, bonus,
increments. This increases the commitment from the parties concerned the appraisal
and the appraisee.
 360o degree feedback system is not very popular in the Indian companies. Among the
companies under study, this system has been implemented in ………….. This system
can be adopted and is successful only in the presence of an open organisational
 Most of the companies have a separate appraisal system for the new employees, who
are on probation. This basically to confirm them.
 ………….. is satisfied with the current performance appraisal system and do not
require any changes…………they would like to provide more training to appraisers,
weightage to few traits of employee need to be rewarded, if possible appraisal form
should be standardised.
 In most of the organizations training is provided for the appraisal system one to two
weeks before the appraisal and also when new or revised Performance appraisal
system is introduced.
 Performance appraisal is surly a good indicator (about 80%) for the training and
developmental need of the employees.
 No monitoring is done to find out any loop holes in the performance appraisal system
and if it exists, it is on informal basis (feedback every year).
 Awareness sessions about the performance appraisal (objectives and importance) are
conducted. It is normally done for new employees.

Conclusions and Suggestions

 Performance appraisal should not be perceived just as a regular activity but its
importance should be recognized and communicated down the line to all the
 There should be a review of job analysis, job design and work environment based on
the performance appraisal.
 It should bring more clarity to the goal and vision of the organisation.
 It should provide more empowerment to the employees.
 New methods of appraisal should be adopted so that both appraiser and the appraisee
take interest in the appraisal process.
 The employees who have excellent performance should be used as a mentor for other
employees which would motivate others to perform better.
 Employees should be given feedback regarding their appraisal. This will help them to
improve on their weak areas.
 Financial and non-financial incentives should be linked to the annual appraisal system
so that employees would be motivated to perform better.
 New mechanisms should be evolved to educe the time factor involved in the
procedure of appraisal. Introducing online-appraisal can do this.
 The frequency of training program for the appraiser should be increased and these
sessions should be made interactive.
 The awareness sessions for the employees/appraisees should be made more
interactive and the views and opinion of the appraisees regarding appraisal should be
given due consideration.
 Assistance should be sought from specialists for framing a proper appraisal system
that suits the organisation climate. Constant monitoring of the appraisal system
should be done through discussions, suggestions, interactions.
 Combining the different methods of appraisal can minimize the element of biasness in
an appraisal. Like the Rating method combined with assessment center method would
give an evidence of poor/unfavorable or outstanding behaviour of the appraisee, if
 Use of modern appraisal techniques like 360o appraisal, assessment centers which are
more effective.
 More transparency should be brought about in the appraisal system.
 The appraisal system should cover all employees in the organisation both white collar
and blue-collar jobs.
 Recognizing the good performers i.e., appraisees who have accomplished the targets
for the year can help in getting more commitment from the employees.
 Information regarding the performance of the employees should be kept in proper
 Some of the performance appraisals should be conducted by the top management so
that they can understand the employees and their needs, behaviour better and to find
out the loopholes.
 Performance appraisal should be effectively link to the performance management
system of the organisation.
 …………….still follow the traditional methods of appraisal that should be
transformed into the modern one.
Questions for Appraisee

Name: ___________________________ Contact No: __________________________

1. What do you expect from a Performance appraisal :

(Rank the options from 1 to 6; 1 being most preferred & 6 being least
Detail Rank

Salary Administration and Benefits

Determination of promotion or transfer

Decision on layoff

Assistance in goal

Guideline for training Plan

An insight into your strengths and weakness

2. Do you know what exactly is expected from you at work?

a. Yes b. No

3. Are you satisfied with the appraisal system?

1 2 3 4 5
(1 = Least satisfied; 5 = Most satisfied)

4. Are you aware of performance ratings?

a. Yes b. No

5. Do you think you should be given an opportunity to rate your own

a. Yes b. No

6. Are you given a chance to rate your own performance?

a. Yes b. No

7. Timing of Appraisals
a. Monthly
b. Quarterly
c. Half Yearly
d. Annual
e. Anytime

8. Does the credibility of Appraiser affect the Performance Appraisal System?

a. Yes b. No

9. Is there a complaint channel for the employees who are dissatisfied with the
performance appraisal system?
a. Yes b. No

10. Are the standards on the basis of which the performance appraisal is carried
out communicated to the employees before hand?
a. Yes b. No

11. Who conducts the performance appraisal”?

a. Immediate supervisor
b. Peer appraisal
c. Rating committees
d. Self-rating
e. Appraisal by subordinates

12. Is the performance Appraisal successful in giving a clear understanding of the

appraisee’s job to both appraiser and appraise?
a. Yes b. No

13. Are the objectives of appraisal system clear to you?

a. Yes b. No

14. Does the appraisal system provide a good communication between the top-
management plans and business goals to staff below?
a. Yes b. No

15. Do you want your comments and suggestions to be taken into consideration
during appraisal?
a. Yes b. No

16. Is there a post appraisal interview conducted?

a. Yes b. No
Questions for Appraiser

Name: ___________________________ Contact No: __________________________

1. Purpose of Performance appraisal :

(Rank the options from 1 to 6; 1 being main purpose & 6 being last
Detail Rank

Salary Administration and Benefits

Retain performing employees

Determination of promotion or transfer

Decision on layoff

Assistance in goal

Guideline for training Plan

2. Is the Performance Appraisal helping you to plan your work well?
1 2 3 4 5
(1 = Least helpful; 5 = Most helpful)

3. Does the system provide you a chance to communicate the support you
need from your subordinate to perform the job well.

a. Yes b. No
4. Which appraisal system is being employed in the company?
a. Assessment centre
b. MBO
d. 360 degree feedback
e. Balance scorecard
5. Performance Appraisal criteria
a. Quantitative outcome criteria (Sales volume, Sales price, Productivity,
Goal accomplishment rate)
b. Qualitative process criteria (Quality of product or service, Customer
c. Quantitative process criteria (Efficiency, Cost/expenses, Attendance)
d. Qualitative process criteria (Judgment, Work attitude, Leadership,
Conduct /Trait)
6. Timing of Appraisals
a. Monthly
b. Quarterly
c. Half Yearly
d. Annual
e. Anytime

7. What do you think is the effect of a poor appraisal system

a. De-motivation
b. Retention
c. Ineffective teamwork

8. Does the appraisal system provide a good communication between the top-
management plans and business goals to staff below?
a. Yes b. No

9. Does it give insight to appraisee regarding his strength or weakness?

a. Yes b. No

10. Are employee’s comments and suggestions taken into consideration

before the appraisal?

a. Yes b. No

11. Who conducts the performance appraisal”

a. Immediate supervisor
b. Peer appraisal
c. Rating committees
d. Self-rating
e. Appraisal by subordinates

12. Is the performance Appraisal successful in giving a clear understanding of the

appraisee’s job to both appraiser and appraise?
b. Yes b. No

13. Are the standards on the basis of which the performance appraisal is carried
out communicated to the employees before hand?
a. Yes b. No

14. Do you give an opportunity to the appraisee to rate his own performance?
a. Yes b. No
15. Do you act upon the results of your performance appraisal?
a. Yes b. No
16. If yes, then mention the remedial measures taken?

Human resource management – Aswathappa

Human resource management – V. S. Rao

Human resource management – Gary dessler

Personnel management - C.B.mamoria

Evaluating management training and development - B.R.virmani premila seth
Strategic human resource management – Srinivas.R.Kandula