HRM-Performance Appraisal

& Management

Chapter-1
Introduction to performance
Appraisal Management
 What is Performance Appraisal?

A performance appraisal is a regular review of

an employee's job performance and overall
contribution to a company. Also known as an
annual review, performancereview or evaluation, or
employee appraisal, a performance
appraisal evaluates an employee's skills,
achievements, and growth--or lack thereof.
 
A performance appraisal, also referred to as a
performance review, performance evaluation,
development discussion, or employee appraisal is a
method by which the job performance of an
employee is documented and evaluated.
 What is Performance ?

The accomplishment of a given task measured against

preset known standards of accuracy, completeness, cost,
and speed. In a contract, performance is deemed to be the
fulfillment of an obligation, in a manner that releases the
performer from all liabilities under the contract.

In the performing arts, a performance generally comprises

an event in which a performer or group of performers
present one or more works of art to an audience. In
instrumental music (and in drama), performance is typically
described as "play". Usually the performers participate in
rehearsals beforehand.
 What is Appraisal?

An appraisal is a formal opportunity to analyse your

performance at work, which also offers you a chance to talk
to your employer about your career plans. Appraisalscan be
used to evaluate pay increases and bonuses. You should be
given a written record of your appraisal meeting.
 
An appraisal is a valuation of property, such as real
estate, a business, collectible, or an antique, by the
estimate of an authorized person. The authorized appraiser
must have a designation from a regulatory body governing
the jurisdiction of the appraiser.
 
 
Continuous Performance
Management(CPM)
 Purpose...

The purpose of a performance
appraisal system is to evaluate how well
an employee performs her job duties and
tasks, her supervisory and leadership
capabilities and other soft skills, and how
well she manages workplace relationships
and conflict resolution.
 Purpose of Appraisal

Rewards and Bonuses

Performance appraisal systems, including disciplinary
reviews, are used for a variety of reasons. Many employers
use appraisal systems to determine how to reward
employees, either with salary or wage increases or
bonuses. For example, the graphic rating scale average
might be used to determine the percentage by which the
employee's hourly rate will increase. A 5 rating on a scale
of 1 to 5 could mean the employee will receive the highest
increase the company is awarding that year.
 Purpose of Appraisal

• The Management by Objectives (MBOs)

Management by objectives (MBOs) typically are used for
managers and other leadership positions in which the
previous year's evaluation contains goals and objectives
to accomplish by year end. At evaluation time, the
manager's supervisor reviews the previously agreed to
goals, and assesses achievements during the appraisal
period.
Appraisal system can help determine salary increases or
bonuses for managers. Those who complete all their
goals within the evaluation period might receive a raise;
managers who go above and beyond the agreed-to goals
and excel at their jobs might receive generous bonuses.
 Purpose of Appraisal

• Challenges of Giving MBO Feedback

A manager's goals might include refining the job descriptions
in his department. The resources available are current job
descriptions, and incumbent employees who provide input on
their actual job duties and tasks. A possible challenge could
be two employees who failed to provide their list of tasks in a
timely manner, and in this case, the manager's MBO for this
portion of the evaluation would be (%) percent completion.
Managers who are evaluated using MBOs may have several
goals – five to seven is a reasonable range of management
goals for a one-year period.
.
 Purpose of Appraisal

• Appraisals From an Employee Perspective

From the employer's standpoint, performance appraisal
systems serve many purposes in the workforce planning
function for HR. But the purpose of performance appraisal
systems might be far more important from the employee's
perspective. From where the employee sits, a performance
appraisal is a critical measure of how well he is doing in his
job. While a perfect score on a graphic rating scale is well-
received by any employee, there also comes a certain amount
of pride in knowing your supervisor recognizes your hard work.

Conversely, an employee who excels in some areas but needs

improvement in others benefits from an honest performance
appraisal so he knows where he could benefit from supervisory
guidance, training or support.
.
 Purpose of Appraisal

Is an Employee Right for the Job?

Appraisal systems can also determine whether the employee
is in the right job. For example, an employee who is
consistently performing below expectations may not be a bad
hire, but may be in the wrong job. An assessment of the
employee's current performance, skill set and interests might
reveal that she is better suited for another position particularly
if he/she excels in areas that aren't quantifiable, such as
developing collaborative working relationships and
demonstrating true effort in performing assigned duties.
Reductions in workforce, based on employee performance,
are another purpose for performance appraisal systems. That
said, if your company is reducing the workforce, you might not
have the ability to lay off of terminate only those employees
whose performance is below your expectations.
 Purpose of Appraisal

• Appraisals From an Employee Perspective

From the employer's standpoint, performance appraisal
systems serve many purposes in the workforce planning
function for HR. But the purpose of performance appraisal
systems might be far more important from the employee's
perspective. From where the employee sits, a performance
appraisal is a critical measure of how well he is doing in his
job. While a perfect score on a graphic rating scale is well-
received by any employee, there also comes a certain
amount of pride in knowing your supervisor recognizes your
hard work.
Conversely, an employee who excels in some areas but
needs improvement in others benefits from an honest
performance appraisal so he knows where he could benefit
from supervisory guidance, training or support.
 Purpose of Appraisal
• Overall Expectations from Appraisal
Williams and Krane identified certain features that define the state of an
ideal performance
• Risk-taking ability
• Not being performance-oriented
• Focusing on work
• A sense of self-confidence
• A sense of adapting to various situations
• A sense of time and space management without affecting the work
• Motivation, task-relevant attention, positive self-talk, and cognitive
regulation are other related factors. Crisis handling, stress management,
problem-solving ability, possessing proper skills, agile management
adapting to situations, and including body fitness of eight factors that
determine an individual performance.
 Methods for Evaluating Job
Performance

The method of organization uses to evaluate

employee job performance should vary according
to the position and role within the company. All
the methods begin with performance standards,
however. Simply put, performance standards
aren’t able to fullfil the organizational expectations
and goals.
 Methods for Evaluating Job
Performance
For example, basic job performance expectations are that the
employee will be present at work which is very simple such as
attendance, working remotely, perform the basic functions of her
job and sustain positive working relationships with co-workers.
Attendance is easy to evaluate, and evaluating whether the
employee is performing her job duties also is relatively easy.
That said, evaluating the quality of work and the extent to
which she cultivates good working relationships is highly
subjective and requires an intuitive and astute supervisor to
render a fair, honest evaluation. These evaluations generally
require the supervisor to construct a narrative assessment that
accompanies the quantitative portion of the evaluation concerning
attendance and productivity.
 
Types Of Performance
Appraisal
Method Of Performance
Appraisal
 Method Of Performance
Appraisal
• The 360-Degree Appraisal
This method involves giving out a
questionnaire with questions regarding the
performance of a colleague and they need
to fill it up. This feedback can be
considered by the manager while
evaluating the performance at the end of
the quarter/year.
 Method Of Performance
Appraisal
• General Performance Appraisal
This method involves continuous
interaction between the employee and his
manager continuous setting of goals and
achieving them. Whether the employee
has been able to do justice the entire
process or not is evaluated at the end of
the year.
 Method Of Performance
Appraisal
• Technological/Administrative
Performance Appraisal
This appraisal technique concentrates on
technical more than any other aspect of
performance on the job as the employees
involved have specialized skills. They’re
judged on the skills they possess and the
activity they complete.
 Method Of Performance
Appraisal
• Manager Performance Appraisal
The performance of a manager should
also be appraised and this includes not
just his/her performance on the job but
also relationship management with clients
at his/her disposal. Generally, anonymous
feedback forms are received which are
then considered for appraisal.
 Method Of Performance
Appraisal
• Employee Self-Assessment
This method is very unpopular among
employees as nobody can deal with rating
himself or herself. The self-assessment
sheet is compared with the one filled up
by the manager and the differences are
discussed.
 Method Of Performance
Appraisal
• Project Evaluation Review
This method involves performance
appraisal of the team members involved at
the end of every project and not at the
end of every year. This helps the team
and its members develop with each
passing project.
 Method Of Performance
Appraisal
• Sales Performance Appraisal
A salesperson is evaluated on the basis of
his/her sales skills and accomplishment of
financial goals set previously. Goals set in
case of sales should be realistic and ways
of achieving them should be decided by
the employee and the manager
concerned.
 Performance Appraisal
Techniques
• Graphic Rating Scale
A graphic rating scale rates employees on a fixed scale as per the
qualities they are required to possess. The final score obtained
classifies employees into various tiers and helps in their
performance evaluation at the end of the year. It is
understandable and easily usable. Behaviors can be quantified
and appraisal can be simplified using this method.
There are demerits to this method too. Temperament varies from
person to person. A few evaluators can be very strict and a few
can be very lenient based on their fixed agenda. Though it helps
to identify the best and the worst performing individuals, it does
not separate average individuals.
 Performance Appraisal
Techniques
• Essay Performance Appraisal Method

It is also called the “Free Form method.” It includes a fact-

based performance description of employees with
instances to support it and based on the staffs evaluated
on the job.
It is a qualitative technique and not a quantitative
technique. So, evaluation using this method is difficult.
Moreover, one needs to have detailed knowledge
regarding the job and the firm in order to use this method.
 Performance Appraisal
Techniques
• Checklist Scale
A checklist is prepared on the basis of Yes or No
with regard to the traits of an employee. If an
employee has a particular trait then it is marked
as yes or else no. The evaluation of the rater
and the actual HR evaluation are two separate
things altogether and it is not a detailed
evaluation.
 Performance Appraisal
Techniques
• Critical Incidents
The manager has to prepare a list of
important incidents highlighting the
behavior of an employee. These incidents
help decide the best or the poorest
behavior of an employee and s/he is
evaluated. The only disadvantage of this
method is it can be very biased.
 Performance Appraisal
Techniques
• Work Standards Approach
The management of a firm establishes fixed
standards and the final deliverable
prepared by the team involved has to be as
per those points and then, each member is
evaluated. So, the employee knows his/her
job and its terms clearly. It just does not
help in making individualistic appraisals.
 Performance Appraisal
Techniques
• Ranking Appraisal
A manager is required to rank employees
put into the same job and then evaluate
them. The employees are ranked
chronologically in either increasing or
decreasing order. The problem is it cannot
be used on a very large team and its
members.
 Necessary Steps in Process Of
Performance Appraisal
Step 1: Establish performance expectations and
standards
Appraisal processes start with establishing standards and
expectations. The essence of this is to make it easy for you
to identify particular output, skills, and accomplishments
that will be assessed.
This first step is basically about setting the specific criteria
that will assist you as a manager to determine whether or
not the performance of the employees are satisfactory as
well as the levels of contribution towards goals and
objectives of the organization.
 Necessary Steps in Process Of
Performance Appraisal
Step 2: Providing regular feedback
This is simply about establishing effective communication between you
and the employees in regards to standards and expectations. It is an
important aspect because it helps in ensuring that employees perform
their roles by the goals and objectives of the organization. Feedback can
be provided formally or can be communicated informally.
Feedback should also be consistently given to help employees in keeping
tabs on particular activities that they are doing as well as performing
them in the right manner. Feedback should never be a preserve for
special occasions but rather need to be given instantly; whether positive
or negative provided that it helps the employee in performing better.
Employees need to get feedback in regards to standards expected of
them, and if possible, the standards can be revised to reflect the feedback
acquired from your workers.
 Necessary Steps in Process Of
Performance Appraisal
Step 3: Measure actual performance
This stage incorporates measuring of employees’ actual
performance based on information obtained from different reports
such as written, oral and statistical as well as through personal
observation. This is the stage that calls for a careful choice of the
ideal methods that are used in measuring performance.

It is of utmost significance to ensure that you do not make

appraisal judgment based on what you feel towards the employee.
It is only appropriate to make a sound measurement of findings,
facts, and objectivity. The essence of this is that what is measured
supersedes the manner in which it is measured hence the need for
ensuring that objectivity is adhered to.
 Necessary Steps in Process Of
Performance Appraisal
Step 5: Discuss results of appraisal
As earlier mentioned, Process Of Performance Appraisal is a
continuous process that takes time. As a manager, the next thing
you need to do is to ensure that you communicate the feedback of
appraisal to your employees on a one-on-one basis.

It is always challenging for managers to present truthful appraisal

to the employees and enable them to constructively accept the
results, especially if it reflects more negatives than positives. But
what you need to know is that discussing feedback together is a
better approach of allowing them to understand their strengths and
weaknesses. This ultimately has an impact on how they will
perform in future depending on how you communicate the
feedback whether positive or negative.
 Necessary Steps in Process Of
Performance Appraisal

Step 6: Come up with corrective measures

This is the final stage in appraisal processes. Initiating

some effective corrective measures should be executed
according to the results of the appraisal. Carefully examine
the results and identify areas that require improvement and
then come up with corrective action that will make it possible
for employees to improve performance. At this stage.
 Performance Appraisal and
Development
While the term performance appraisal has meaning for
most small business owners, it might be helpful to consider
the goals of an appraisal system. They are as follows:
•To improve the company's productivity
•To make informed personnel decisions regarding
promotion, job changes, and termination
•To identify what is required to perform a job (goals and
responsibilities of the job)
•To assess an employee's performance against these goals
 Performance Appraisal and
Development
• Size of staff
• Employees on an alternative work schedule
• Goals of company and desired employee behaviors to help
achieve goals
• Measuring performance/work
• Pay increases and promotions
• Communication of appraisal system and individual
performance
• Performance planning
THE END