Performance appraisal

Definition

It is the process of evaluating the performance

of employees, sharing that information with
them and searching for ways to improve their
performance’.
 Performance appraisal attempts to:
 Give feedback to improve subsequent performance
 Identify training needs
 Document criteria used to allocate rewards
 Form a basis for personnel decisions
 Provide the opportunity for development
 Facilitate communication
 Validate selection techniques and human resource
policies to meet federal EEO requirements.
 MeAning
• Performance appraisal is the step where the
management finds out how effective it has been at hiring
and placing employees .

• A “Performance appraisal” is a process of evaluating

an employee’s performance of a job in terms of its
requirements.
 What is Performance Appraisal ?
Performance Appraisal is the process of obtaining,
analyzing and recording information about the
relative worth of an employee.

Its Objectives:-
 To judge the gap between the actual and the desired
performance.
 To help the management in exercising organizational control.
 To diagnose the strengths and weaknesses of the individuals.
 To provide feedback to the employees regarding their past
performance.
Main Purposes of Performance Management

 Individual Rewards (Base and Incentive)

 Feedback for Sub-Ordinate (Plus and Minus)
 Recognition of Superior Performance
 Documentation of Weak Performance
 Personnel Decision-Making
 Future Goal Commitments (Planned
Achievements)
 Reasons for Appraisals
 Compensation "Pay for Performance"
 Job Performance Improvements
 Feedback to Subordinates
 Documentation for Decisions
 Goal Setting - Later Evaluation
 Promotion Decisions
 Identify Training Needs
 HR Planning
 Process

Setting
performance
Taking corrective standards Communicating
standards
standards

Discussing Measuring
results standards
Comparing
standards
Appraisal Formats

 Many different formats and procedures have

been tried to meet these multiple objectives.

 There are relatively few special rules or

special principles applicable only to the
specific purposes.

 There are common formats.

Issues with standard practice
 Despite its standard practice in most public and private
organizations for more than 50 years, performance appraisal still
has many problems.

 Raters show resistance to criticizing subordinates, and the

judgmental aspect of evaluating human performance is subject to
both covert (subjective and individual) and overt (prejudice and
bias) errors.
 Another consideration is that federal legislation, court decisions,
and guidelines of several federal agencies have targeted
performance appraisal as a validation procedure for employee
selection techniques and preventing discrimination in the
workplace.
 Organizations have been found in violation of civil rights laws in
failing to validate performance appraisal criteria and methods.
 Methods of Performance Appraisal
Traditional Methods Modern Methods
1. Paired comparison
1. Assessment Center
2. Graphic Rating scales
2. Appraisal by Results or
3. Forced choice Description method
4. Forced Distribution Method Management by Objectives
5. Checks lists 3. Human Asset Accounting
6. Free essay method 4. Behaviorally Anchored
7. Critical Incidents Rating scales
8. Group Appraisal
9. Field Review Method
10. Confidential Report
11. Ranking
Performance Appraisal Methods
 Performance appraisals take many forms.

 Written essays, the simplest essay method, is a

written narrative assessing an employee's strengths,
weaknesses, past performance, potential, and
provides recommendations for improvement.

 Types of performance appraisal methods include

comparative standards (such as, simple ranking,
paired comparison, forced distribution) and absolute
standards (such as, critical incidents, BARS, MBO).
Comparative Standards or Multi-person Comparison

 This relative, as opposed to absolute method, compares one

employee's performance with that of one or more others.
 In group rank ordering the supervisor places employees into a
particular classification such as "top one-fifth" and "second one-
fifth". If a supervisor has ten employees, only two could be in the
top fifth, and two must be assigned to the bottom fifth.
 In individual ranking the supervisor lists employees from
highest to lowest. The difference between the top two employees
is assumed equivalent to the difference between the bottom two
employees.
 In paired comparison the supervisor compares each employee
with every other employee in the group and rates each as either
superior or weaker of the pair. After all comparisons are made,
each employee is assigned a summary or ranking based on the
number of superior scores received.
Formats
 Critical Incidents. The supervisor's attention is
focused on specific or critical behaviors that separate
effective from ineffective performance.
 Graphic Rating Scale. This method lists a set of
performance factors such as job knowledge, work
quality, cooperation that the supervisor uses to rate
employee performance using an incremental scale.
 Behaviorally Anchored Rating Scales (BARS).
BARS combine elements from critical incident and
graphic rating scale approaches. The supervisor rates
employees according to items on a numerical scale.
 Formats
 Management by Objectives. MBO evaluates how well an
employee has accomplished objectives determined to be
critical in job performance.
 This method aligns objectives with quantitative measures
such as sales, profits, zero-defect units produced.
 360 Degree Feedback. This multi-source feedback method
provides a comprehensive perspective of employee
performance by utilizing feedback from the full circle of
people with whom the employee interacts: supervisors,
subordinates and co-workers. It is effective for career
coaching and identifying strengths and weaknesses.
Methods of Performance
Appraisal

 Management by Objectives (MBO)

 360-Degree Appraisal

 Behavioral Observation Scale

 Behaviorally Anchored Rating Scale (BARS)

 Examples of 360 degree performance appraisal method

These companies are using 360 Degree Performance

Appraisal Method

Wipro Maruti Udyog

Infosys HCL Technologies
Reliance Industries Wyeth Consumer
Health (WCH)
 ADvAntAges

provide a record of
performance over a
period of time.

Can be motivational provide an

with the support of a opportunity for a
good reward and manager to meet &
compensation discuss performance

Provide an
opportunity for an Provide the employee
employee to discuss with feedback about
issues and to clarify their performance
expectations
 DisADvAntAges
If not done appropriately, can
be a negative experience.

very time consuming,

especially for a manager

subject to rater errors &

biases.

If not done right can be a

complete waste of time.

Can be stressful for all

involved
 SUMMARY GUIDELINES FOR APPRAISALS
1. Appraisal standards are job related
2. Standards are clearly communicated to employees in advance
3. Standards are responsive to actual worker behavior or effort
4. Activities performed and results achieved are both appraised
5. Acceptable vs. unacceptable results can clearly be discerned
6. Appraisal criteria are consistently applied
7. Raters are able to consistently observe work performance
8. Raters are trained in appraisal and how to feedback results
9. Developmental feedback is separated from judgmental appraisal
10. An appeal process exists to resolve (judgmental) rating disputes
360 Degree Appraisal
Introduction to
3600 Appraisal
360 - Degree Appraisal is a system or process in
which employees receive confidential, anonymous
feedback from the people who work around them.
 What are 3600 Measures ?
 360 degree measures behaviors and
competencies.

 360 degree addresses skills such as listening,

planning, and goal-setting.

 360 degree focuses on subjective areas such as

teamwork character, and leadership
effectiveness.

 360 degree provides feedback on how others

perceive an employee.
Background
360-degree methods have roots as early as the 1940s, however, there is some
disagreement regarding the exact genesis of the technique.

Despite these disagreements, one point that most scholars can agree on is 360-
degree performance appraisal has historical roots within a military context.

During the 1950s and 1960s this trend continued in the United States within
the Military service academies.

At the United States Naval Academy at Annapolis, the midshipmen used a

multi-source process called “peer grease” to evaluate the leadership skills of
their classmates.

In the corporate world during the 1960s and 1970s, organizations like Bank
of America, United Airlines, Bell Labs, Disney, Federal Express, Nestle, and
RCA experimented with multi-source feedback in a variety of measurement
situations.
The Concept
Participants
 Superiors
 Subordinates
 Peers/Colleagues
 Direct Reports
 Customers
 Self
 Advantages
To the individual: To the team:
Helps individuals to understand how Increases communication.
others perceive them. Higher levels of trust.
Better team environment.
Uncover blind spots. Supports teamwork.
Increased team effectiveness.
Quantifiable data on soft skills.

To the organization:
 Reinforced corporate culture by linking survey
items to organizational leadership competencies
and company values.

 Better career development for employees

 Improves customer service by involving them.

Disadvantages
It is the most costly and time consuming type of appraisal.

These programs tend to be somewhat shocking to managers at

first.

The problems may arise with subordinate assessments.

The organization implementing this type of performance

appraisal must clearly define the mission and the scope of the
appraisal.

Organizations must consider other issues like safeguarding the

process from unintentional respondent rating errors.
5 things to consider before you start
360 degree appraisal.
1. Purpose-
 clarify why and what.
 communicate to everyone.

2. Culture – are you ready?

 Do you have a mature enough team dynamic?
 Are you open enough?
 Those involved need to feel comfortable & supported.

3. Timing of introduction – also link with the planning cycle.

4. Roll out – champion?

 How to generate buy-in?
 Involve everyone early.

5. Confidentiality for appraisees and raters–non-attributable.

Companies using 3600 Performance
Appraisals.

Bell Atlantic
Bell-Core (1980)
International IBM (1980)
Ltd (1998)

Johnson & Xerox

Johnson Ltd (1980s)
(1980s) Wipro
Technologies Ltd
(Dec17th 2002)
Any Questions ???

Thank You