The Appraisal System.

Concepts of Appraisal & Appraisal Methods

 CONTENTS

Definitions

Meaning

Objectives of Performance Appraisal

Methods of Performance Appraisal

360 degree performance appraisal

Issues in appraisal system

Advantages
Disadvantages

Conclusion
 Definitions
According to Newstrom, “It is the process of evaluating
the performance of employees, sharing that
information with them and searching for ways to
improve their performance’’.
 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.
Objectives of Performance Appraisal
According to:
Employee Organization

Concrete and tangible

Measuring the efficiency
particulars about their work
Maintaining organizational
Assessment of
control.
performance
Aims at:
Mutual goals of the
 Personal development employees & the organization.
 Work satisfaction Growth & development
 Involvement in the
Increase harmony & enhance
organization.
effectiveness
Methods of Performance Appraisal
Traditional Methods Modern Methods
1. Paired comparison
1. Assessment Center
2. Graphic Rating scales
3. Forced choice Description 2. Appraisal by Results or

method Management by
4. Forced Distribution Method Objectives
5. Checks lists 3. Human Asset
6. Free essay method Accounting
7. Critical Incidents 4. Behaviorally Anchored
8. Group Appraisal Rating scales
9. Field Review Method
10.Confidential Report
11.Ranking
 Paired Comparison Method

• Ranking employees by making a chart of all

possible pairs of the employees for each trait
and indicating which is the better Employee of
the pair.
• It is useful where priorities are not clear
• This method is not appropriate if a large
number of employee are required to be
evaluated.
 Ranking employees by paired comparison Method

For the Trait “Quality of For the Trait “Creativity”

work”

Person rated Person rated

As compared to A B C As compared to A B C

A - + +
A + - + -
+ - + + +

B + - +
B -- ++ -- - + -

C ++ -- ++ C ++ -+ +-
 Graphic or Linear Rating Scales

• A scale that lists a number of traits and a

range of performance for each. The employee
is then rated by identifying the score that best
describes his or her performance for each
trait.
• It includes the employee characteristics and
employee contribution
 Graphic or Linear Rating Scales
Attitude
0 5 10 15 20

No interest Careless: Interested in Enthusiasti Enthusiastic

In work: In-different work: c about job opinions &
consistent Instructions Accepts & advice
complainer opinions & fellow- sought by
advice of workers others
others
Decisiveness
0 5 10 15 20

Slow to Take Takes Take Take

take decisions decisions decisions in decisions
decisions after careful promptly consultation without
consideration with others consultation
whose views
he values
 Forced choice method

Criteria Rating

1.Regularity on the job Most Least

•Always regular
•Inform in advance for delay
•Never regular
•Remain absent
•Neither regular nor irregular
 Forced distribution method

No.
of 40% 20%
employees 10% 20% 10%
poor Below average good Excellent
average

Force distribution curve

 Critical Incident method

Ex: A fire, sudden breakdown, accident

Workers Reaction scale

A Informed the supervisor immediately 5

B Become anxious on loss of output 4
C Tried to repair the machine 3
D Complained for poor maintenance 2
E Was happy to forced test 1
Specimen of Staff Assessment Form [Descriptive Essay Type]

Staff Appraisal
Name . . . . . . . Job Title . . . . . . .
Department . . . . . . . . . . . . Date of Review . . . . . . .
Age . . . . . .. . Years in present job
Section I Appraisal Of Performance
Note to Appraiser
1. Appraisal must cover the period of the preceding 12 months
2. Consideration to every function & responsibility of the job
3. An objective factual assessment of an employee’s improvement or
deterioration

Section II Promotability & Potential

Promotability
1. Promotion now
2. Within 2 years
3. Within 5 years
4. Unlikely to qualify for promotion
Section III Career Development
Section IV Notes on Interview with employee

Section V Comments on & Endorsement by Reviewing Authority

 Field review method

Performance subordinate peers superior customer

Dimension

Leadership ^ ^

Communication ^ ^

Interpersonal skills ^ ^

Decision making ^ ^ ^

Technical skills ^ ^ ^

Motivation ^ ^ ^
 Management By Objectives

The MBO concept, as was conceived by Drucker, reflected

a management philosophy which values and utilizes
employee’s contributions. Application of MBO in the field
of performance appraisal is a very recent thinking.
 MBO Process

Set organizational goals

Defining performance target
Performance review
Feedback
 Behavioral Anchored Rating Scales
Performance Points Behavior
Extremely 7 Can expect trainee to make valuable suggestions
good for increased sales and to have positive
relationships with customers all over the
country.
Good 6 Can expect to initiate creative ideas for improved
sales.
Above average 5 Can expect to keep in touch with the customers
throughout the year.
Average 4 Can manage, with difficulty, to deliver the goods
in time.
Below average 3 Can expect to unload the trucks when asked by
the supervisor.
Poor 2 Can expect to inform only a part of the
customers.
Extremely poor 1 Can expect to take extended coffee breaks &
roam around purposelessly.
360 degree performance appraisal
360 degree performance appraisal
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)
 Issues in appraisal system
Formal and informal

What methods?
Whose performance?

When to evaluate? Appraisal

Who are the raters?
Design

What problems?
What to evaluate?

How to solve?
 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
Conclusion
 Because many of the more conventional performance
appraisal methods have often proved unpopular with those
being appraised and evaluators a like, 360 is gaining popularity
with many managers and employees.
 It offers a new way of addressing the performance issue.
 When used with consideration and discipline, feedback
recipients will feel that they're being treated fairly.
 In addition, supervisors will feel the relief of no longer carrying
the full burden of assessing subordinate performance.
 The combined effect of these outcomes should result in
increased motivation, which in turn improves performance.