CHAPTER 9

APPRAISING AND
MANAGING
PERFORMANCE
 PERFORMANCE APPRAISAL

Performance appraisal is the objective assessment of

an individual’s performance against well-defined
benchmarks such as job knowledge, quality and
quantity of output, initiative, leadership abilities,
supervision, dependability, co-operation, judgement,
versatility, health, and the like.

Assessment should consider potentials of the

employee for future performance and must not be
confirmed to past performance alone.
NEED/ ADVANTAGES/ OBJECTIVES

1. Effect promotions based on competence and

performance
2. Confirm service of probationary employees
3. assess employees’ training and development needs
4. Decide upon pay rise
5. Employees know where they stand – constructive
criticism – guidance
6. Improves communication and understanding
between superior and subordinate
7. Determine effectiveness of HR programs such as
selection, training and transfer.
 COMPETITVE ADVANTAGE

1. Improving performance – by directing or

monitoring
2. Making correct decisions – promotion, pay rise,
training, transfer, etc
3. Ensuring legal compliance – legal battle diverts
focus - avoids performance related litigation
4. Minimizing job dissatisfaction and turnover –
motivated and satisfied employees gives comp. edge
5. Consistency between organizational strategy and
behavior – both positive and negative consequences
 PERFORMANCE APPRAISAL PROCESS

• Objectives of performance
1 appraisal

• Establish job expectations

2

• Design an appraisal program

3
 PERFORMANCE APPRAISAL PROCESS

4 • Appraise performance

5 • Performance interview

6 • Archive appraisal data

• Use appraisal data for appropriate
7 purposes
 ESTABLISH JOB EXPECTATIONS

1. Informing the employee what is expected from him

on the job.
2. A discussion with his superior is held to review the
major duties contained in the job description.
3. Employee shouldn’t be expected to start working
before he understands what is expected from him
4. Formal/informal assessment of new career – first
6-12 weeks of joining – assess fitment to role
5. Followed by regular assessment.
 DESIGN AN APPRAISAL PROGRAM
1 5

Formal or informal appraisal How to solve the problems?

2 6

Whose performance is to be assessed? What should be evaluated?

3 7

Who4are the raters? When to evaluate?

Methods of appraisal

What problems are encountered?

FORMAL OR INFORMAL APPRAISAL

Formal Appraisal Informal Appraisal

Occurs at specified time Occurs whenever supervisor
periods (once/twice a feels the need of
year) communication.
Required by organization Eg, if employee consistently
for the purpose of exceeds standards, and
employee evaluation informal appraisal may be
Primary evaluation done to recognize this fact.
o u r a ge Private discussions – from
l ly e n c
Usua b o t h . canteen to office.
t u r e of
mix u s t N O T Helpful for performance
tt e r m er.
La h ef o r m feedback.
c e t
repla
 WHOSE PERFORMANCE IS TO BE ASSESSED?

Employees at 3 levels :
1. Individual level
2. Group level –
(i) when there is high group cohesiveness i.e., co-
operation and understanding to accomplish interrelated
tasks. Attempt to evaluate at individual level will –
undermine cohesiveness and promote competition.
(ii) when the interdependence of tasks makes it difficult
to identify individual contribution
3. Both:
(i) individual level – to assess training needs
(ii) group level – for merit pay increases
WHO ARE THE RATERS
 WHO ARE THE RATERS?
IMMEDIATE SUBORDINATE can PEERS can evaluate
SUPERVISOR is the assess employee’s facts like
most fit candidate to ability to contribution to
evaluate because communicate, workgroup,
 Most familiar with delegate, allocate interpersonal
subordinate’s resources, disseminate effectiveness,
performance info, resolve intra- communication,
 If evaluated by
personal conflict, and reliability, initiative.
deal with all fairly. ADV – accurate
someone else,
assessment due to
superior authority
CLIENTS – internal or closeness of working
is undermined relationship
external – direct
 Training is linked DIS-ADV – (i)
contact/ use output of
with appraisal ratee -assess interest, friendship and
which is the dependability, animosity (ii)cause
responsibility of innovativeness, conflict (iii) may get
the supervisor. courtesy together and rate
each other high.
 WHO ARE THE RATERS?
COMMITTEES consist Employee’s SELF APPRAISAL –
of immediate service employee evaluates his
supervisor and 3-4 determines own performance. ADV
more supervisor that perception of – (i) scope for MBO
have direct contact CUSTOMERS which motivates
with ratee. ADV – which managers. (ii) managers
(i)objectivity in rating ultimately are less defensive. (iii)
(ii) raters at different matter to the best suited when
level observe different organization. executive development
facets of performance. Hence, their is the purpose. DIS-
DIS-ADV – evaluation is ADV – (i) linient
diminishes role of most valid. compared to other
immediate supervisor sources (ii) more viable,
(training needs). TIO N biased and less in
MB I NA
CO agreement with other’s
OF MOST judgment.
S
METHOD
 Status Eff
a n c e ect is
Perf o r m – o v errating of
O r d e r high level
Di m e n s i o n
ions
PROBLEMS OF jo b h eld in high
e d im e n s esteem
2 or mor c h other RATING – a n d u n d errating of
o ll ow e a lo
that f d e s c r i b e RATER’S ERROR
wer level jo
b held in
r ot a t e o r lo w
and i t y
esteem.
q u a l
a similar
r E ff e c t o ccurs a rt of the
Spillove us ratings of it y o n th e p
t h e p r e v io L e n i e ncy or Sever s ubjective
when , s se s s m e n t
r a t e e – g o od or bad ra t e r makes the a e o f e v a l uation.
the rrent rat in gs
feats the pu rp o s
n c e s t h e cu w h ic h d e ly critical.
influe b e in g u n d u
Severity refers to
Halo Error occurs when Rater Effect in
one aspect of the individuals cludes favoritism Perpetual Set
stereotyping an ,
performance influences his d h o s t ility based on occurs when
sex, race, etc. R
entire assessment. esult depends o rater’s
rater’s attitude n
u enced by not actu to wards ratee and assessment is
n g s a r e in fl
Rater’s rati by ratee at t he a l o u tc o m e influenced by
v io r e x h i b i te d
be h a
t (p r im a c y ) and end previously held
star w period.
f t h e r e v ie Central Tendency occurs when beliefs.
(recency) o
employees are incorrectly rated near the
Others – misattribution, error of middle or average of the scale. This
wishful thinking, quick fix, false playing-safe attitude of the rater is due to
conclusion, first glance certain doubts or anxieties while assessing.
SOLVING RATER’ WHAT SHOULD TIMING OF
PROBLEMS BE RATED EVALUATION

Criteria should be Once in 3

Best solution – related to the job months, 6
provide training to
raters months, or
Includes: quality, one year
quantity,
Not a cure. Frequent
timeliness, cost
effectiveness, need evaluation
Training can help for supervision, gives constant
solve distortion due interpersonal feedback
to halo, leniency, impact, and easing
central tendency community service. improvement.
and bias.
 – Cost A
ng Sc a l e ccount
R a t i M ethod ing
m e r ic a l e valuate
several nu n t in g a t e r m s o f s in
pr es e PAST METHODS m o n
scales re t e r i o n returns
o
etary
cri r the be
job related t, OF APPRAISAL derived
f
n e fi t
t p u r o
such as ou Relation m the ratee.
etc. ship be
initiative, en ts o n co s t a nd b tween
Cheklist o f st a te m e n efit is
d h is estabili
an s h e d.
traits of employees
b a re m a r k ed Y E S or N O .
jo
ep a rt m en t ev a lu a tes the
HR d Comparatative Analysis supervisors
n d a ssi g n s p o in ts .
report a rank from best to worst without
Forced Choice method justification needed. Or, compare A with
the rater is forced to choose every other employee, B with every other
statements arranged in 2 employee and so on.
o d d e s c r ib es the
blocks or more.
t s M e t h o d E ssay Meth p ression,
a l I n c id e n o v e r a l l im
Critic
in c ri t ic a l ratee by – e ngth n
s e s o n c e rta t a b i lit y , s t r
focu a k e s the diff promo io n , ability
t h a t m a lif ic a t
behaviours n d n o n - w e akness, qu
tive a
between effec a n c e . an d training.
erform
effective job p Confidential Record report consisting
Field Review Method – HR of 14 items maintained by govt depts. Uses
person hold interview with ratee rating scales and requires justification for
and his superior to make the same.
 FUTURE METHODS OF APPRAISAL

360 Appraisal

180 Appraisal

Management By Objective

Psychological Appraisal

Assessment Centers
 APPRAISE THE PERFORMANCE

Assessment should focus on

i. Individual traits – communication, planning, work

accuracy and quantity

ii. Behaviour exhibited by assessee

iii. Knowledge/skills possessed – by productio workers,

clerical staff, and some professionals.

iv. Results achieved – administrators, managers, most

professionals have targets. Quantifiable units.
 PERFORMANCE INTERVIEW

Performance interview has three goals :

(i) To change behaviour of employees whose performance
does not meet organizational or personal goals
(ii) To maintain the behaviour of employees whose
performance is satisfactory
(iii) To recognize superior performance behaviour so that
they will be continued.
Types of Interview :
(i) Direct interview
(ii) Tell and listen interview
(iii) Mixed interview
 ARCHIEVE APPRAISAL DATA

If the employee has been told that he is not being

promoted because of an average performance and he
would be considered favorably for a jump in status and
remuneration provided the performance improves.
The HR manager should have those details to
convince the employee concerned when he joins the
issue with the management.
Similarly, issues like pay hike, confirmation of
probationary service, affirmative actions, etc.
 USE OF APPRAISAL DATA

The data generated through the process of evaluation is used

by the HR department.

Ways to use appraisal data :

1. Remuneration administration
2. Validation of selection programs
3. Employee training and development programs
4. Promotion, transfer and lay-off decision
5. Grievance and discipline program
6. HR planning
 PRINCIPLES OF PERFORMANCE MANAGEMNT

1. Corporate goals into individual, team, divisional and

department goals.
2. Should not be linked only with financial rewards.
3. Ongoing process.
4. Consensus and co-operation is need. Not control and
coercion.
5. Transparency at every stage.
6. Continuous feedback
7. Cover all employees
8. System and not a piece of work.
9. Simple and easy. Avoid too many variables.
10. Involvement of stakeholders in designing formats, policies,
and procedures.