Performance Appraisal

Unit 3
Ref – Desler/Jackson - HRM
Performance Appraisal
 Evaluating an employee’s current and or past
performance relative to his/her performance
standards.

 Aim of PA – to improve employees’

performance.

 Performance management system – process

used to identify, encourage, measure, evaluate,
improve and reward employee performance.
PA
 Also know as employee rating
 Employee evaluation
 Performance review
 Performance evaluation
 Results appraisal
PA
 Is the process of evaluating how well
employees perform their jobs when compared
to a set of standards and then
communicating that information to
employees.
Why appraisal performance?
 Plays an integral role in the employee’s performance
process

 Correct the boss and subordinate if any deficiencies

are identified and reinforce things that are done
correctly

 Help in career planning of the employees based on

his strength and weakness

 Affects the employer’s salary raise and promotional

decisions
Why performance management
practices?
 Identify expected performance level

 Encourage high levels of performance

 Measure individual performance and then evaluate

 Reward or discipline based on employees

performance

 Provide feedback on individual performance

 Provide assistance, counselling as need be.

Performance management outcomes
 Development
 Productivity
 Advancement
 Discipline
 Pay raises
 termination
What is performance?
 What an employee does or does not do in his
work.
 It includes – quantity of output

-quality of out put

- Timeliness
- Presence at work
- cooperativeness
Types of performance information
 Manager receive three different types of
information about employees performance in a
job –
 Trait based information – subjective traits of
employees – attitude, initiative, creativity

 Behaviour based information – specific behaviour

leading to success in job – eg. Verbal
presentation skills of an marketing executive

 Results based information – target achieved

What should be provided in
performance management system
by the HR?
 Provide information to employees about their
performance.

 Clarify what the organization expects

 Identify development needs

 Document performance for personnel

records
PA
 Performance measures can be – objective or
subjective.

 Objective – can be measured directly or

counted

 Subjective – requires judgement on the part

of the evaluator
PA
 If important job duties are not evaluated,
then it is known as deficient.

 If unnecessary job duties are evaluated, then

it is known as contaminants.
Performance standards
 Expected levels of performance/
benchmarks/ goals/ targets.

 Performance standards should be realistic,

measurable, clearly understood.

 Criteria for performance standards are set by

experienced employee or a quality control
inspector or one who is in a similar external
job.
Terms defining standards of
evaluation
 Outstanding
 Very good
 Satisfactory
 Marginal
 unsatisfactory
Performance appraisal can be used
 Administrative use –
- Compensation
- Promotion
- Dismissal
- Downsizing
- Layoffs
Developmental use
 Identifying strength
 Identifying areas for growth
 Development planning
 Coaching and career planning
 Performance appraisal can be done in two

ways – informally or systematically

Timing of appraisals
 60-90 days after employment
 Once in 6 months
 Once in a year
 Weekly appraisals for employees in the

probationary period.
Who conducts the appraisals?
 Supervisors
 Employees
 Team members
 Outside sources
 360 degree feedback
Performance appraisal method
- Category rating methods – graphic rating scale
- Checklist
- Comparative rating methods – ranking
- Forced distribution
- Behavioural/objective methods – behavioural

rating approaches
- Management by objectives
- Narrative methods – critical incident
- Essay
- Field review
Graphical rating scale
 A scale that allows the rater to mark an employee’s
performance on a continuum

 Simple procedure and most frequently used

 Focus on duties and responsibilities of the job.

 Field Review method – outside reviewer becomes

an active partner in the rating process.

 It is time consuming.
checklist
 Performance appraisal tool that uses a list of
statements or words that are checked by
raters.

 Ranking method – lists all employees from the

highest to the lowest performance.

 Forced distribution method – performance

appraisal method in which ratings of
employee’s performance are distributed along
a bell shaped curve.
Critical incident method
 Manager keeps a written record of both
highly favourable and unfavourable actions in
an employee’s performance during the entire
ranking period.

 Essay or free form method – managers write a

short essay describing employee’s
performance during the rating period. It
could be structured or unstructured.
Behavioural rating approaches
 Assesses an employee’s behaviour instead of
other characteristics.

 Eg. BOS – behavioural observation scales

 BARS – behavioural anchored rating scales

 BES – behavioural expectation scales.

Management by objectives
 Specifies the performance goals that an
individual and his or her manager agrees to try
to attain within an appropriate length of time.

 Each manager sets objectives derived from the

overall goals and objectives of the
organization.

 Other types of MBO – appraisal by results,

target coaching, work review, performance
objectives, mutual goal setting.
Four stages of MBO
 Job review and agreement – employee and
supervisor review the job description and
agree upon the key activities.

 Development of performance standards –

specific standards of performance must be
mutually developed. It should be measurable
and specific.
Four stages of MBO
 Guided objective setting – objectives must be
set realistically in consideration with the
guidance of the supervisor.

 Continuing performance discussion –

employees and supervisors discusses on the
progress of the performance outside a formal
set up.
Common errors in performance
appraisal process
 Varying standards – similar performance are rated differently.

 Recency/primacy effect – error in which the rater gives greater

weightage to recent events when appraising an individual’s
performance.

 Central tendency, leniency/strictness – rating all employees in a

narrow range in the middle of the rating scale.

 Leniency error occurs when ratings all employees fall at the

high end of the scale.

 Strictness error occurs when a manager uses only the lower

part of the scale to rate employees.
Common errors in performance
appraisal process
 Rater bias – error that occurs when a rater’s
values or prejudices distort the rating.

 Halo effect – rating a person high on all items

because of performance in one area.

 Contrast error – tendency to rate people

relative to others rather than against
performance standards.
Common errors in performance
appraisal process
 Similar to /different from me – same or
different characteristics from the rater .

 Sampling error – if the rater has seen only a

small sample of the person’s behaviour then
it is not a representative behaviour.
Appraisal feedback

 After appraisals, managers need to

communicate the results to the employees to
have clear understanding.

 Provide an opportunity to clear up

misunderstanding on both sides

 Focus on counselling and development of the

employee and not merely say why he was
rated so.
conclusion
 Appraisal interview is an emotional experience
for both the managers and the employees
because both the positives and negatives are
discussed.

 If it is not handled properly it leads to

resentment, poor motivation and conflicts in
work.

 Giving suggestions for future improvement is

most essential.
Additional reading
 Refer – Human resource Development –
theory and practice by Tapomy Deb for
sample forms of performance appraisal , self
appraisal – for managerial and non
managerial positions & case studies.
Pg. 310 – 344.

https://www.youtube.com/watch?v=axUYxKC2
U04
Performance appraisal interview