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Performance Appraisal :

Performance Appraisal (PA) refers to all

those procedures that are used to
evaluate the personality, performance,
potential, of its group members
Relationship between jab analysis
and performance appraisal:
Job analysis performance performance
standards appraisal

Translate job
Describes work Into levels of Describes the
& Personnel To acceptable Job relevant
Requirement Or unacceptable strengths and
performance weakness of
Of a particular Each individual
Question arises?
 Why do we measure performance?
 Effective performance appraisal
 How do we measure performance?
 It is a step by step process
 It examine the employee strengths and
 Scientific and objective study
 Ongoing and continuous process
 Secure information for making correct
decisions on employees
Needs and Objectives:
 Provide feedback about employees
 Provide database
 Diagnose the S & W of individuals
 Provide coaching, counseling, career
planning to subordinates
 Develop positive relation and reduce
 Facilitates research in personnel management
Appraisal Benefits (cont.)
 Appraisals offer
 Direction
 Feedback
 Input
 Motivation
Appraisal Benefits
 Appraisals offer the company:
 Documentation
 Employee Development
 Feedback
 Legalprotection
 Motivation system
Why Appraisals Are Important

•Guide progress
•Improve performance
Why Important (cont.)

 Review performance
 Set goals
 Identify problems
 Discuss career advancement
Steps in performance appraisal
Establishing job standards

Designing an appraisal programme

Appraise performance

Performance interview

Use appraisal data

For appropriate purpose
Process of PA
Taking corrective
standards Communicating
standards standards

Discussing Measuring
results standards
Issues in appraisal system
Formal and informal

What methods? Whose performance?

When to evaluate? Appraisal Design? Who are the raters?

What to evaluate? What problems?

How to solve?
What to evaluate? (Philip Model)

H Problem
Potential Social
separation citizen

L Performance H
How PA contribute to firm’s
competitive advantages
Making correct
Values and behavior decision


Minimizing dissatisfaction Ensuring legal

And turnover competence
Problems in performance appraisal

1. Errors In rating
 Halo effects
 Stereotyping
 Central tendency
 Constant error
 Personal bias
 Spill over effect
Problems in performance appraisal
1. Incompetence
2. Negative approach
3. Multiple objectives
4. Resistance
5. Lack of knowledge
Essentials of an effective appraisal system
 Mutual trust
 Clear objectives
 Standardizations
 Training
 Job relatedness
 Documentation
 Feedback and participation
 Individual differences
 Post appraisal review
 Review and appeal
Appraisals and Discrimination

 Title VII
 Other fair employment
 Laws
Discrimination (cont.)
 Failure to communicate standards
 Failure to give timely feedback
 Failure to allow employees to correct
 Inconsistency in measuring
 Failure to document performance
Appraisal Forms
 Define performance expectations
 Describe measurement tools
 Use a rating system
 Cover specific examples
 Set measurable goals
Measure Performance
 Measurement systems need to be:
 Specific
 Fair
 Consistent
 Clear
 Useful
Measure Performance (cont.)
Systems can be:
 Numerical
 Textual
 Management by Objective (MBO)
 Behavior oriented
Document Performance
 Make sure documentation is objective
 Document performance of all
 Provide complete and accurate
 Document performance on a regular
Set Goals….
 Based on job requirements
 Realistic
 Measurable
 Observable
 Challenging
 Prioritized
Employee Input

 Employees take an active role:

 Setting goals
 Designing action plans
 Identifying strengths and weaknesses
 Employees participate in the PA meeting

 Review performance
 Think about new goals
Preparation (cont.)

 Review performance
 Complete written appraisal
 Think about new goals
 Schedule time and place
Start the Meeting
 Lay out agenda
 Talk about money
 Encourage input
 Give good news first
During the Meeting
Review performance:
 Based on previous goals
 Noting strengths and accomplishments
 Identifying areas for improvement
Presentation Tips
 Focus on the professional
 Give objective examples
 Invite response
 Listen actively
 Create “we” mentality
During the Meeting (cont.)
 Set goals: Based on company goals
 Building on areas that need
End the Meeting
 Encourage good performance
 Lay out action plan
 Communicate outcome of goals not
 Confirm understanding
Continuous Feedback
 Formal appraisals
 Informal appraisals
 Open communication
Recognize Good Performance
 Verbal
 Public
 Tangible
 Monetary
Identify Poor Performance
 Act early
 Take the right approach
 Deal with employee reaction
 Handle continued poor performance
Discipline Poor Performance
 Recognize problems
 Talk with employee
 Follow company policy
Handle Hard Cases
 Reviewing highly emotional employees
 Rating former peers
Key Points to Remember
 You must conduct objective appraisals on a
scheduled basis.

 Appraisals tell employees how they’re doing and

how they can improve.

 Appraisals help create a system of motivation

and rewards based on performance.
Performance Appraisal Methods
 Individual Evaluation Methods
 Confidential report
 Essay evaluation
 Critical incidents
 Checklists
 Graphic rating scale
 Behaviorally anchored rating scale
Critical Incident method
Ex: A fire, sudden breakdown, accident

Workers reaction scale

A informed the supervisor immediately 5

B Become anxious on loss of output 4
C tried to repair the machine 3
D Complained for poor maintenance 2
E was happy to forced test 1
Checklist method
•Simple checklist method
•Weighted checklist method
•Forced choice method

Simple checklist method:

Is employee regular Y/N
Is employee respected by subordinate Y/N
Is employee helpful Y/N
Does he follow instruction Y/N
Does he keep the equipment in order Y/N
Weighted checklist method

weights performance rating

(scale 1 to 5 )
Regularity 0.5
Loyalty 1.5
Willing to help 1.5
Quality of work 1.5
Relationship 2.0
Forced choice method

Criteria Rating

1.Regularity on the job Most Least

•Always regular
•Inform in advance for delay
•Never regular
•Remain absent
•Neither regular nor irregular
Graphic Rating Scale
• Continuous Rating Scale
• Discontinuous Rating Scale

Employee name_________ Deptt_______

Rater’s name ___________ Date________
Exc. Good Acceptable Fair Poor
5 4 3 2 1 _
Overall output
Total score Continuous Rating Scale
Indifferent Enthusiastic


No Interested Very
Interest enthusiastic

Discontinuous Rating Scale

BARS( behaviorally Anchored rating scale)

Step 1. Identify critical incidents

Step 2. Select performance dimension

Step 3. Retranslate the incidents

Step 4. Assign scales to incidents

Step 5. Develop final instrument

MBO Process
 Set organizational goals
 Defining performance target
 Performance review
 feedback
Performance Appraisal Methods
 Group Appraisal
 Ranking
 Paired comparison
 Forced distribution
 Performance tests Field review
Ranking method
Employee Rank

A 2

B 1

C 3

D 5

E 4
Paired comparison method
A B C D E Final Rank
A - - - + + 3

B + - - + + 2

C + + - + + 1

D - - - - + 4

E - - - - - 5
No of Positive evaluation
Total no. of evaluation * 100 = employee superior evaluation
Forced Distribution method

10% 20% 40% 20% 10%
poor Below average good Excellent

Force distribution curve

Field review method
Performance subordinate peers superior customer

Leadership ^ ^

Communication ^ ^

Interpersonal skills ^ ^

Decision making ^ ^ ^

Technical skills ^ ^ ^

Motivation ^ ^ ^
Performance criteria for executives
 For top managers
 Return on capital employed
 Contribution to community development
 Degree of upward communication from
middle-level executives
 Degree of growth and expansion of
For middle level managers
 Departmental performance
 Coordination among employees
 Degree of upward communication from
 Degree of clarity about corporate goals and
For supervisors
 Quality and quantity of output in a given period
 Labor cost per unit of output in a given period
 Material cost per unit in a given period
 Rate of absenteeism and turnover of employees
 No of accidents in a given period