Performance

Review and
Appraisal
Justine Mae De Roxas
Marvin Alvarez
 What is
Performance
Review and
Appraisal?
It is an ongoing
assessmeprocess
nt of employe
of obtaini
es’ job
ng,
researc
perform
hing,
anceanalyzin
levels during
g and recordi
a givenng
informa
period on
tionthe
about
basisthe
of worth
systema
oftic
an
uniform perform
employance
ee. standard.
One of the most important activities of an HR manager is
maintaining and enhancing the workforce. With all the
efforts and costs that recruiting and selection entail, it is
important to develop employees for them to use their
fullest capabilities, thus, improving the effectiveness of
the organization.
Performance review is the ongoing process of evaluating
and improving employees’ performance. It is a process
by which an individual’s work performance is assessed
and evaluated. It answers the question, “how well has
the employee performed during the period of time in
question?”
It is also entails determining and communicating to an
employee how he/she is performing on the job and
ideally, establishing a plan of improvement.
Performance is often confused with the effort that refers
to energy expended
Performance is measured in terms of result.
Performance may be defined then as the
accomplishment of an employee or manager’s assigned
duties and outcomes produced on a specified job
function or activity during a specified time period.
Performance review or evaluation refers to a systematic
description and review of an individual’s job
performance. The major contribution of performance
management is its focus on achieving results-useful
products and services for customers inside and outside
the organization.
Performance management redirects efforts away
from business toward effectiveness. It is an HRM
activity where the individual worker’s efficiency is
observed and appraised during a given period on
the basis of a systematic uniform performance
standard. It helps in identifying, collecting,
sharing, and using information about the
performance of people at work.
Performance management is an ongoing
communication process, undertaken in partnership
between an employee and his/her immediate
supervisor. It involves establishing clear
expectations and understanding about the
following:
a. The essential job functions the employee is expected
to do
b. How the employee’s job contributes to the goals of
the organization
c. What “doing the job well” means in concrete terms.
d. How the employee and supervisor will work together
to sustain, improve or build on existing employee
performance.
e. How job performance will be measured
f. Identifying barriers to performance and removing
them
g. Refers to total system of gathering information, the
review and feedback to the individual, and storing
information to improve organization effectiveness.
The primary goal of performance management is to
improve organizational performance. But one must take
note that performance appraisal is not performance
management. Evaluating performance is just one part of
performance management system.
WHY MEASURE PERFORMANCE

1. Managers cannot manage and define what is expected

and gives feedback and recognition without defining the
basis or performance measures. It allows management to
specify what must be done and to combine feedback with
goal setting.
2. On the part of the employee, he/she cannot improve
on what he/she is supposed to do without the necessary
data before and after to see if performance is actually
improving.

3. Creating high performance requires a definition of

clear goals so you will know it when you see it. In
addition, all high performers get there because they have
a clear picture of where they are going.
4. Pay for performance requires metrics. If the
organization will be giving pay based on performance,
there is a need to have some way of knowing when the
pay out has been earned.
EARLY APPROACHES TO PERFORMANCE APPRAISAL

1. Focusing on the employee’s past performance – this

is more on management of results.
2. Focusing on the employees; development – in here,
results become the driving force for management
development.
These two approaches are not without difficulties that is
why modern approaches to performance review takes a
much more strategic posture to link personal
development with organizational development and
continuous improvement measures.
Common Flaws Identified with Performance
Review System Design

1. Organizations limit performance review to make

employees accountable for past endeavor. This take the
view that making people accountable for poor
performance will automatically generate improvement.
Tying performance review to employee salary review.
This is trying to reinforce the power of management to
decide who are those entitled to receive increases,
showing who is boss, with the use of stick and carrot.
These flaws point to the fact that companies
must not only look at performance review as
the mechanical administration of personnel
evaluation forms.
The evaluator must be able to inform an employee
that his/her performance is less than the required
standard and less than what he/she is capable of
giving, or that he/she has an attitude or behavior
problem that is limiting his/her contribution or
aversely affecting his/her colleagues.
This is why there is a need to focus on performance
management rather than just evaluating the employees’
performance.
Managing performance is done with the employee
because it benefits the employee, the manager and the
organization and is best done in a collaborative ,
cooperative way.
 OBJECTIVES OF PERFORMANCE APPRAISAL

1. It provides information upon which promotion,

transfer, demotion, layoff , discharge, and salary
decisions can be made. It could justify reward decisions
including merit increases, promotions, and other forms
of rewards.
2. It provides an opportunity for the supervisor and
his/her subordinates to review and identify their
strengths and weaknesses or work-related behavior.
This in turn allows both of them to develop a plan for
correcting any deficiencies that the appraisal might
have unearthed or reinforce the things the subordinate
does right. This feedback clarifies for employees the job
expectations held by their supervisor.
3. It forms the basis in identifying the training needs of
employees as well as evaluating the success of training,
thus, development initiatives are not based on opinions
but rather on results.
4. It helps in the firm's career planning process because
it provides a good opportunity to review the person's
career plans in light of his/her exhibited strengths and
weaknesses. Thus, it could produce evidence and/or
opportunity for career progression.
5. It allows easy monitoring and supervision.

6. It helps evaluate the individual's share relative to the

team's contribution in achieving the organization's goal.

7. It provides information to evaluate effectiveness of

selection and placement decisions.
 PERFORMANCE CRITERIA

Deciding what to evaluate reflects the personal values of

the individuals who design the evaluation system. Most
people agree that quality and quantity of performance
are important dimensions to evaluate but there is less
agreement about traits such as appearance, initiative.
enthusiasm, and the like. Three criteria are suggested
here to be included in the construction of performance
evaluation:
1. Relevance — relevant performance dimensions are
determined by the duties and responsibilities contained
in the job description.
2. Reliability — produced consistent and repeatable
evaluation.
3. Freedom from contamination - should measure each
employee's Performance without being contaminated by
factors that an employee cannot control such as
economic conditions, material shortage. or poor
equipment.
 Indicators or Matrix that Can Help Measure
Employee Performance

According to Hakala (2008). a manager or supervisor can use the

following indicators of performance to appraise subordinates.

1. Quantity: The number of units produced, processed, or sold is

a objective indicator of performance.

2 Quality: The percentage of work output that must be redone or

is rejected one indicator of quality. In a sales environment. the
percentage Of inquiries converted to sales is an indicator of
salesmanship quality.
Timeliness: How fast work is performed; it might be the
number of unh produced per hour.

Cost-effectiveness: The cost of work performed should be

used as a means of performance only if the employee has
some degree of control over cost.

Absenteeism/Tardiness: An employee is obviously not

performing whet he or she is not at work.
Creativity: Supervisors and employees should keep track of
creative work examples and attempt to quantify them.

Adherence to Policy: This may seem to be the opposite of

creativity. but it is merely a boundary on creativity.
Deviations from policy indicate at employee whose
performance goals are not well-aligned with those of the
company.
Gossiping and other Personal Habits: They may not seem
performance related to the employee, but some personal
habits, like gossiping or rumor mongering. can disrupt job
performance and interfere with the performance of others.
The specific behaviors should be defined, and goals should
be set for reducing their frequency.

Personal Appearance/Grooming: Most people know how to

dress for work, but in many organizations, there is at least
one employee who needs to be told. Examples of
inappropriate appearance and grooming should be spelled
out, their effects upon the employee's performance and that
d others explained, and corrective actions defined.
 WHY SHOULD EVALUATE
PERFORMANCE?

1.Manager/Supervisor Appraisal- Hierarchical arrangement

of formal authority in most organizations gives the
supervisor or the manager legitimate authority to evaluate
subordinates. They are in the best position to observe
employees. and they should have a better understanding of
the job performed.
2. Self-appraisal - The employee appraises his or her own
performance in many cases comparing the self-appraisal to
management's review. Often self appraisals can highlight
discrepancies between what the employee management
think are important performance factors and provide
mutual feedback for meaningful adjustment of
expectations. This is considered valuable for personal
development and the identification of training needs, but
not for evaluative purposes. This is useful when combined
with other forms of appraisal.
3. Subordinates Appraisal — Provides unique information
because subordinates know better than anyone else whether
leadership is good or bad. It makes the workplace more
democratic and responsive to human needs and it increases
the flow of communication as well. Subordinates can also
provide useful insights in the appraisal of their seniors,
particularly in identifying developmental needs. Usually,
such inputs are used by companies which have instituted
360-degree appraisal for their middle and senior-level
managers.
4. Peer Appraisal — Research on peer
evaluation has found to be success and
yielded good reliability and validity.
This method is based assumption that
co-workers are most familiar with an
employee's performance peer appraisals
are often effective at focusing an
employee's attention on' undesirable
behaviors and motivating change. This
method often places greater emphasis on
team performance and team rewards.
5. Customer/Supplier — Customers, vendors, or
suppliers can be potential evaluators. This kind of
appraisal would be more relevant for service-oriented
companies such as banks, where the inputs provided by
external customers can be useful for staffing.
6. Team Appraisal — Similar to peer
appraisal in that members of a team,
who may hold different positions, are
asked to appraise each other's work
and work styles. This approach
assumes that the team's objectives and
each member's expected contribution
have been clearly defined.
7. Center — The employee is appraised by professional
assessors who may evaluate simulated or actual work
activities. Objectivity is one advantage of assessment
centers , which produce reviews that are not clouded by
personal relationships with employees.
8. 360-Degree or "Full-Circle" Appraisal — The
employee's performance is appraised by everyone with
whom he or she interacts, including managers, peers,
customers, and members of other departments. This is
the most comprehensive and expensive way to measure
performance, and it is generally reserved for key
employees.
Remember, performance appraisal program
can never be perfect. It would depend much on
the evaluator or on the employee, to be
effective and responsive in meeting the
dynamic and changing organizational and
employee needs.
 GOAL SETTING

PERFORMANCE STANDARD SETTING

INFORMATION DISSEMINATION

ACTUAL PERFORMANCE MEASUREMENT

FEEDBACK EVALUATION RESULTS

REWARDING EXEMPLARY PERFORMANCE

CORRECTING SUBSTANDARD
PERFORMANCE
 SOURCES OF DATA IN APPRAISAL

1. Production Data — evaluate the degree of dependable

task accomplishment by measuring quantity and
quality of performance, Examples include number of
units produced per hour. peso volume of sales, profit,
return on investment. and the like. These are
considered the best measures of performance because
they are directly observable and they can be counted.
2. Personnel Data — type of information found in an
individual's personnel files. Examples include
absenteeism, tardiness, training program completed, and
critical incidents. Except for critical incidents, these data
are directly observable and can be reliably measured.
3. Judgment of Others - Many of the spontaneous and
innovative behaviors that are important to organizational
effectiveness can only be assessed by the judgments of
others and ought to be obtained in every evaluation.
 PERFORMANCE APPRAISAL METHOD

Multiple Appraisal Methods

1. Ranking Method — ranking the employee from the

most efficient to the least capable on each trait or quality
to be used in judging the employees' performance or just
simply ranking the employee from best to worst.
This can be very difficult to do if the supervisor is asked to
rank a large number of subordinates and many traits are
involved.
Ranking system has also the potential to cause unwanted
side effects.
Because ranking method compares colleagues in a very
real sense, it pushes people to compete with each other. It
can encourage people to work harder to come out on top
but it can also encourage people to passively interfere with
the work of others.
2. Paired comparison method — consists of asking an
evaluator to consider only two individuals at one time and
to decide who is better. Then another pair of names is
presented to the evaluator for another evaluation. An
employee's position in the final ranking is determined by
the number of times that employee is chosen over the
other employees. With large number of subordinates, this
can be very tedious. A supervisor with 20 employees to
evaluate will have to process 190 comparisons.
2. Forced distribution — Forced ranking is a method of
performance appraisal that ranks employees through
forced distribution. The rater is asked to rate employees in
some fixed distribution of categories such as superior.
above average, average, below average, and poor. It
assumes that the relative percentages would be
approximately 10%, 20%, 40%, 20%, and respectively.
This system is based on social science statistics Of the
normal curve, which presents a bell-shaped graph where
one end of the scale represents the best job performance
and the other end represents the worst performance.