PERFORMANCE APPRAISAL

What is Performance:
Job performance represents the contribution that individuals make
to the organization that employs them.

Performance Appraisal
It is the process of measuring and providing feedback about
employee contributions to the organization.

It is a formal system of review and evaluation of individual or

team task performance.

Dale Yoder, “ It is a formal procedure to evaluate personalities,

contributions and potentials of group members in a working
organization.”
•Appraisal should be more than a past-oriented
activity that criticizes or praises workers for their
performance in the preceding year.

•Rather, appraisal must be future-oriented view of

what workers can do to achieve their potential in
the organization.

•It must enable the workers to higher levels of

performance
 Determinants of Job Performance
There are three basic determinants of the job they are as
following:

•Willingness to perform: performing tasks and

responsibilities in the organization with willingness lead to
high performance.

• Capacity to Perform: basic qualifications abilities and

skills required performing specific tasks are possessed by
the employees

•Opportunity to Perform: Favorable circumstances and

opportunities to perform the challenging tasks contribute
towards achievement of the organization’s mission and
objective
 Elements of job performance

Task performance: Citizenship behavior: Counterproductive

when employees How contributes by Organizational
Behavior: This is
perform actions building a positive behavior that is
that transform raw organizational harmful to the
materials into environment. organization.
goods and Examples volunteering
Example: taking
services. to take on tasks that are unauthorized breaks.
not part of one’s job, destroy the assets of
an organization, steal
materials and
products.
Organizations tend to follow one of two approaches in
measuring performance.

Merit-Based Systems – process of recognizing and

rewarding high performance.

Which means certain percentage of employee will receive

the highest rating, a majority will be ranked in the middle,
and a few will receive the lowest.
Examples:
• Exceed Standards,
• Meets Standards,
• Does Not Meet Standards.

The merit-based approach is most beneficial for organizations

pursuing a Free Agent HR strategy.
Parity-Based Systems – encourage cooperation and
allow everyone who meets a certain standard to be
classified as a high performer.

Parity-based performance measures frequently focus on

processes rather than outcomes.

High performance is defined as following guidelines and

performing behaviors assigned by supervisors.

For organizations using a Loyal Soldier HR

strategy, success comes from cooperative
employees who work with maximum
efficiency.
Uses of Performance appraisal

Most managers rely on Performance appraisal

techniques as a basis
•to provide feedback,
•encourage performance improvement,
•make valid decisions,
•justify terminations,
•identify training and development needs,
•defend personnel decisions such as payment
Features/ characteristics of Performance appraisal
a)It is a continuous process.
b)It is a systematic examination of an employees'
strength and weakness in terms of job.
c)It is a scientific study.
d)It is arranged periodically according to a
definite plan.
e)It helps in securing information necessary for
making objective and correct decision on
employees.
f)It is an impartial rating of an employee
excellence.
Objectives of the performance appraisal:
1.To improve the job performance of employees
2.To diagnose the strength or weakness of individuals
3.to access the area in which training is required.
4.To prevent grievance and indisciplinary activities of the personnel.
5.To evaluate the success of training programmes
6.To motivate the employee to perform well.
7.To provide coaching, counseling and career planning to employees.
8.To test the effectiveness of recruitment, selection, placement and rotation
process.
9.To provide counseling and career planning.
10.To establish harmonious relationship between employer and employees.
11.To provide valid information for deciding promotion, transfer, placement,
punishment, etc.
Performance Appraisal Process
 Defining objectives

Appraisal is used for different purposes

•Motivating
•Controlling the behaviours
•Providing rewards
•Salary revision
•Promotion
•Training and development

What is your objective?

 2. Defining appraisal norms

Performance norms are to be specified for the period

for which the appraisal is conducted.
 3. Designing appraisal programme

Who are the appraisers?

•Generally the lower level employees are kept out.
•Superiors are involved in the appraisal
•However, the present trend in appraisal suggests the
concept of 360 degree appraisal, which involves appraisal by
the apprises himself known as self appraisal.

What is the appraisal methodology

•Should it be a structured forms
•Questionnaire
•personal interview
•or a combination of all
•What is the time period
 4. Implementation

•In implementing appraisal programme, the appraisal is conducted by the

appraisers and they may also conduct interview if it is provided in the
appraisal system.

•The results of the appraisal are communicated to HR department for follow

up actions which should be oriented towards the objectives of the appraisal.

5. Appraisal feedback

Appraisal feedback is the most crucial stage in appraisal process.

If they are rated high or performance highly applauded, naturally they are
happy and feel their self - esteem is high.

On the other if they are rated low they resent, cry and may even be ill-
tempered.

Their weaknesses may be put clearly through counsellors and advised.

Giving Employee Feedback
Essential requirements of performance appraisal:
•A good atmosphere should exist in the organization to create confidence and
mutual trust among employees.
•The objectives of the performance appraisal must be definite and clear.
•Well defined performance standards should be developed. Procedures and
techniques adopted in appraisal is also standardized.
•Proper training should be imparted to appraisers.
•The appraiser should focus on job related behavior and performance of
employees.
•Proper documentation of appraisal should be done.
•There should be feedback regarding the performance and participation in
fixation of standards.
•The size, number of employees and organization set up must be considered
while designing the appraisal system.
•There must be post appraisal review.
•A review committee should be constituted for reviewing and appeal against
METHODS OF PERFORMANCE
APPRAISAL
1.Rating scales method-

Employee who scored more points will be treated as top

performer following descending scored employees will be
treated as low performer and the least scored employee
will be treated as non-performers.
 2. Graphic Rating Scale.
Directions: Please circle the number that you feel best describes this worker’s
performance for each work dimension.
3. Paired comparison

The paired comparison method makes the ranking method more

precise.
For every trait (quantity of work, quality of work, and so on), you
compare every employee with every other employee.

With, say, five employees to rate, you use a chart of all possible
pairs of employees for each trait. Then choose who the better
employee of the pair is.
4. Essay Method

• This traditional form of appraisal, also known as

“Free Form method” involves a description of the
performance of an employee by his superior.

• Under this method The rater describes the strengths

and weakness and makes recommendations.

• Essay evaluation Is a non-quantitative technique The

appraiser is asked to compose a statement that
describes the employees best.

Usually it is combined with other methods

5. Critical incident method

• Developed by – ‘Flanagan and burns’

• This method involves identifying and describing

specific incidents where the employee did something
really well or something that needs

• For example A filing cabinet containing classified

documents is left unlocked . The employees comes
back to the office and locks it.
6. Forced ranking, occurs when a rater is required
to rank all employees.
Such as an office manager being asked to rank the
office’s five secretaries in order from highest performer
to lowest performer.
The forced ranking technique eliminates central
tendency error and provides guidance for
organizations in giving promotions and pay raises
to top performers
Management by Objectives (MoB)

Employees establish objectives in consultation with the superiors. They are

evaluated based on the objectives.

Setting objectives in the organisation gives a sense of direction

•Managers and employees work together to set objectives
•It is done for all levels of organisation
•It is concerned with converting organizational objectives into a
personal objective
•Objectives are matched with the resources
•Objectives provide guidelines for actions.
Steps

•Define organisational goals – it comes from vision and mission

•Define departmental objectives (SMART –I.E. Specific, Measurable, Acceptable,
Realistic, Time-bound)
•Define employee’s objective
•Continue monitoring the performance
•Performance evaluation
•Providing feedback
360 Degree Appraisal
•It is a technique which is
systematic collection of
performance data on an
individual group, derived
from a number of
stakeholders like immediate
supervisors, team members,
customers, peers and self.

•In fact anyone who has

useful information on how an
employee does a job may be
one of the appraisers.
 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.
The Concept
 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.

Common Problems Within the Performance Appraisal Process

Bias
Bias is simply a personality-based tendency, either for or against something. We
all have biases. Biases make the evaluation process subjective rather than
objective.

Stereotyping
. Though stereotyping is almost always assumed to Stereotyping is mentally
classifying a person into an affinity group and then identifying the person as
having the same assumed characteristics as the groupbe negative, there are many
incidents of positive stereotypes.

Halo Error
Halo error occurs when the evaluator forms a generally positive impression of an
individual and then artificially extends that general impression to many of that
individual's categories of performance to create an overall evaluation of the
individual that is positive. Horn Error
Central tendency error, which is the pattern of placing
almost everyone in the middle of the scale

Recency error.
Which arises when raters place too much emphasis
on recent behaviors and outcomes.

Primacy error
This occurs when a rater places too much emphasis
on the behavior that is first observed.
Contrast Error

This error occurs when a rater unintentionally compares

people with one another.
This is called contrast error.