Performance appraisal & Potential appraisal

Presented by
Maharaj Singh Mamta kumari Rayees ahmad ittoo (MBA-MDU-2)

Definition Performance appraisal characteristics Performance appraisal objectives Benefit to employees and company Process Performance appraisal methods Definition of Potential appraisal Potential appraisal attributes.

Performance appraisal
The identification, measurement, and management of human performance in organizations.

According to Flippo ³Performance appraisal is the systematic ,periodic and an impartial rating of an employee¶s excellence in matters pertaining to his present job and his potential for a better job´

Relationship between job analysis and performance appraisal:
Job analysis performance standards performance appraisal

Describes work & Personnel Requirement Of a particular job

Translate job Into levels of to acceptable Or unacceptable performance

Describes the Job relevant strengths and weakness of Each individual

Question arises?
Why do we measure performance? Effective performance appraisal systems How do we measure performance?

It is a step by step process It examine the employee strengths and weaknesses Scientific and objective study Ongoing and continuous process Secure information for making correct decisions on employees

HR programs


Administrativ e uses

Constructive criticism and guidance

PA Objectives

Personal development

Pay scales & Pay raise

Documentatio n

Training and development


Appraisal Benefits
Appraisals offer employees: 
Direction Feedback Input Motivation

Appraisal Benefits
Appraisals offer the company: 
Documentation Employee Development Feedback Motivation system

Why Appraisals Are Important ?
‡Guide progress ‡Improve performance ‡Review performance ‡Set goals ‡Identify problems ‡Discuss career advancement

Process in performance appraisal
Job analysis and job specification Establishing standards of performance Communicating performance standards to employees Measuring actual performance Comparing actual performance with standards Initiating corrective action , if necessary

Issues in appraisal system
Formal and informal What methods? Whose performance? Who are the raters? What problems?

When to evaluate? Appraisal

What to evaluate?

How to solve?

Essentials for good appraisal system
Reliability and Validity Periodic review Practical viability Standardization Training to appraisers Open communication

Problems in performance appraisal
1. Errors In rating  Halo effects  Stereo typing  Central tendency  Contrast error  Personal bias

Problems in performance appraisal (Cont¶d) 2. Negative approach 3. Resistance 4. Lack of knowledge

Performance Appraisal Methods
Individual evaluation methods
Confidential report Essay evaluation Critical incidents Checklists Graphic rating scale Behaviorally anchored rating scale (BARS)  MBO 

Critical Incident method
Ex: A fire, sudden breakdown, accident Workers A B C D E reaction informed the supervisor immediately Become anxious on loss of output tried to repair the machine Complained for poor maintenance was happy to forced test scale 5 4 3 2 1

Checklist method
‡Simple checklist method ‡Weighted checklist method

Simple checklist method:
Is employee regular Is employee respected by subordinate Is employee helpful Does he follow instruction Does he keep the equipment in order Y/N Y/N Y/N Y/N Y/N

Weighted checklist method

weights Regularity Loyalty Willing to help Quality of work Relationship 0.5 1.5 1.5 1.5 2.0

performance rating (scale 1 to 5 )

Graphic Rating Scale
Employee name_________ Deptt_______ Rater¶s name ___________ Date________ -----------------------------------------------------------------------Exc. Good Acceptable Fair Poor 5 4 3 2 1 _ Dependability Initiative Overall output Attendance Attitude Cooperation Total score Continuous Rating Scale

MBO Process
Set organizational goals Defining performance target Performance review feedback

Performance Appraisal Methods
Group Appraisal 
Ranking Paired comparison Forced distribution Performance tests Field review technique

Ranking method
Employee A B C D E Rank 2 1 3 5 4

Paired comparison method
A B C D E A * + + B * + C * D + + + * E Final Rank + 3 + + + * 2 1 4 5

No of Positive evaluation Total no. of evaluation * 100 = employee superior evaluation

Forced Distribution method

No. of employees 10% 20% 40% 20% 10% Excellent

poor Below average good average Force distribution curve

Performance criteria for executives
For top managers 
Return on capital employed  Contribution to community development  Degree of upward communication from middle-level executives  Degree of growth and expansion of enterprise.

For middle level managers

Departmental performance Coordination among employees Degree of upward communication from supervisors Degree of clarity about corporate goals and policies

For supervisors

Quality and quantity of output in a given period Labor cost per unit of output in a given period Material cost per unit in a given period Rate of absenteeism and turnover of employees No of accidents in a given period

Potential appraisal
Identification of the hidden talents and skills of a person. The person might or might not be aware of them. Potential appraisal is a future ±oriented appraisal whose main objective is to identify and evaluate the potential of the employees to assume higher positions and responsibilities in the organizational hierarchy.

Why Potential appraisal
Inform employees about their future prospects ; Help the organization chalk out of a suitable succession plan; Update training efforts from time to time ; Advise employees about what they must do to improve their career prospects .

Potential appraisal attributes
Analytical power Creative imagination Effective leadership Conceptual skills Commercial skills Communication skills Problem solving and decision making

Steps in good potential appraisal system
Role descriptions Qualities needed to perform the roles Rating mechanism - Rating by others - Tests - Games - Records

Organising the system - Weightage to merit in place of seniority in promotions? -Weightage in performance dimensions -Mechanism of assessing individuals Feedback

Thank you «

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