QUESTIONS

1. Define Performance appraisal and Performance management.

2. Describe Performance Appraisal process.
3. Explain in detail the performance management.
4. What is difference between Performance appraisal and performance
management.
5. Who should do the appraising?
6. Briefly define various performance appraisal tools or techniques and
also discuss their pros and cons (advantages and disadvantages)
7. What are the Appraisal problems and how can they be avoided?
Performance appraisal
Evaluating an employee’s current
and/or past performance relative to
his or her performance standards.

Performance appraisal
process
A three-step appraisal process
involving
(1) setting work standards,
(2) assessing the employee’s actual
performance relative to those
standards, and
(3) providing feedback to the
employee with the aim of helping him
or her to eliminate performance
deficiencies or to continue to perform
above par. Performance management means
continuously ensuring that each
employee’s performance makes sense in
terms of the company’s overall goals.
 First, most employers base pay, promotion, and retention decisions on
the employee’s appraisal.

Appraisals play a central role in the employer’s performance

management process. Performance management means continuously
ensuring that each employee’s performance makes sense in terms of the
company’s overall goals.
Reasons to
appraise The appraisal lets the manager and subordinate develop a plan for
correcting any deficiencies, and to reinforce the subordinate’s strengths.
subordinates’
performance Appraisals provide an opportunity to review the employee’s career plans
in light of his or her exhibited strengths and weaknesses.

Finally, appraisals enable the supervisor to identify if there is a training

need, and the remedial steps required.
 Performance management is the continuous process of identifying, measuring, and
developing the performance of individuals and teams and aligning their performance with the
organization’s goals. We can summarize performance management’s six basic elements as
follows:
1. Direction sharing means communicating the company’s goals to all employees and then
translating these into doable departmental, team, and individual goals.
2. Goal alignment means having a method that enables managers and employees to see the link
between the employees’ goals and those of their department and company.
3. Ongoing performance monitoring usually means computerized systems to measure the
team’s and/or employee’s progress toward meeting performance goals.
4. Ongoing feedback means providing face-to-face and computerized continuous feedback
regarding progress toward goals.
5. Coaching and developmental support should be part of the feedback process.
6. Recognition and rewards should provide the incentives to keep the employee’s goal-directed
performance on track.
Difference between Performance Appraisal
and Performance Management
Performance Appraisal Performance Management
Performance Appraisal means evaluating an Performance management means continuously
employee’s current and/or past performance relative to ensuring that each employee’s performance makes
his or her performance standards. sense in terms of the company’s overall goals.

It is a year-end event—the completion of the appraisal It is a process that starts the year with performance
form. planning and is integral to the way people are
managed throughout the year.
Mostly done by supervisors. Some employers obtain employees’
Because the supervisor is usually self-ratings, usually in connection
in the best position to observe and with supervisors’ ratings. Its
evaluate the subordinate’s demerit is that employees usually
performance, and is responsible rate themselves higher than do their
for that person’s performance. supervisors or peers.

This is upward
People often come feedback.
across differently to Subordinates rate
their peers than they their managers,
do to their boss. Peer Anonymity affects the
appraisals—appraisals feedback. However,
by one’s peers—are inflated ratings are
therefore increasingly also commonplace.
popular. The evidence suggests
Peer appraisals can be that upward feedback
effective. One’s peers improves managers’
see aspects of the performance
person that the boss
may never see.
With 360-degree feedback, the employer collects
A rating committee usually consists of the employee’s immediate performance information all around an employee—from his
supervisor and 3 or 4 other supervisors. Using multiple raters is or her supervisors, subordinates, peers, and internal or
advantageous because it cancel out bias of individual raters. external customers—generally for employee’s development.
1. Graphic Rating Scale: A scale that lists a number of traits and a range of performance for each. The employee
is then rated by identifying the score that best describes his or her level of performance for each trait.
2. Alternation ranking method: Ranking employees from best to worst on a particular trait, choosing highest,
then lowest, until all are ranked.
3. Paired comparison method: Ranking employees by making a chart of all possible pairs of the employees for
each trait and indicating which is the better employee of the pair.
4. Forced distribution method: Similar to grading on a curve; predetermined percentages of rates are placed in
various performance categories.
5. Critical incident method: Keeping a record of uncommonly good or undesirable examples of an employee’s
work-related behaviour and reviewing it with the employee at predetermined times.
6. Behaviourally anchored rating scale (BARS): An appraisal method that aims at combining the benefits of
narrative critical incidents and quantified ratings by anchoring a quantified scale with specific narrative
examples of good and poor performance.
7. Mixed Standard Scales: These scales are somewhat similar to behaviorally anchored scales. However they
are called mixed scales because the employer “mixes” together sequentially the good and poor behavioral
example statements when listing them. The aim is to reduce rating errors by making it less obvious to the
appraiser.
8. Management by objectives (MBO): usually refers to a multistep companywide goal-setting and appraisal
program. MBO requires the manager to set specific measurable, organizationally relevant goals with each
INTRODUCTION
The performance appraisal should
compare “what should be” with “what
is.” Therefore, as noted, the first step
in performance appraisal and
management is to decide what should
be—in other words, to let employees
know what you expect of them in
terms of performance standards.

Managers use one or more of three bases

—goals, job dimensions or traits, and
behaviors or competencies

The effective goals should be “SMART.”

Specific
Measureable
Attainable
Relevant
Timely