Performance

Appraisal

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 Definitions:

 The process of arriving at judgments

about a member’s past, present, or
predicted future behavior against the
background of his/her work
environment or future performance
potential.

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Performance Appraisal: The Fear

 The most controversial and stressful

practice in a organization. It seems that
everybody dislikes it and the same time
recognizes its importance.
 Performance appraisal enables
organization to systemize the process
and to reduce discrimination,
inaccuracy, and double standards.

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 Purpose of Performance Appraisal
1. To help make administrative decisions,
especially related to pay determination and
promotions, and to meet developmental
objectives such as coaching subordinates and
determining their training needs.
2. To influence the ratings and the effectiveness
of the system.
3. To provide the key mechanism in which the
context of the ratings interacts with the
capabilities, cognitive and judgmental
processes of the rater.

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 Reward Review

Purposes of
Performance
Performance Appraisal Review

Potential Review

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 Reward Review – should be reviewed after the
employees’ performance had been evaluated.
- increase morale; attitude & behavior; contribution had
been recognized
 Potential Review – predicting employee’s suitability for
promotion or horizontal movement in order to acquire
new experiences or skills (psychological and sociological
implications).
 Performance Review – managers must consider how
employees can utilize their hard (technical) skills & soft
skills. The review will enable managers to determine
employees’ needs for counseling, training &
development, identify promotion/demotion transfers and
layoffs, and as a tool for improving communication.
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Uses of Performance Appraisal

Uses Percent

Compensation 85.6

Performance Feedback 65.1

Training 64.3

Promotion 45.3

Personnel Planning 43.1

Retention / discharge 30.3

Research 7.2

** Based on responses from 600 organizations

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 Improper Performance Appraisal
Process That Lead To ‘Competing and
Conflicting Issues’
i. Failure to provide a fair basis for rewarding
excellence;

ii. Failure to serve performance appraisal as a

monitoring system in order to promote self-
motivated environment among employees;

iii. Failure to define work roles and job

responsibilities accordingly; and

iv. Failure to set up staff developmental support

of each employee.
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Categories of Performance Appraisal

 It is agreed that the formal and informal

appraisal systems exist in every organization.
The process involves three (3) broad
categories of appraisal information (data):
 Diagnostic – at preoperational stage
(selection, placement and development).
 Formative – personal development at initial
and intermediate stages of employment.
 Summative – focus on decisions to implement
personnel actions (compensation, tenure,
dismissal, promotion, and reemployment).

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 Performance Appraisal Cycles / Process

Establish
organizational
performance
standard
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1
Evaluate individual
Determine method of
performance
performance
standard

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3
Compare performance level
against predetermined
standard

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 Performance Appraisal Cycles / process

1) Establish standard – in terms of output,

quality, cost efficiency, or time required to do
the tasks. Be specific, measurable, attainable
and achievable.
2) Determine method – methods chosen should
be the critical factors that will determine the
success. Consider impacts on strengths &
weaknesses.

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 Performance Appraisal Cycles / process

3) Compare performance – the expected target

must be within the employee’s ability to
achieve. Measuring performance should be
understandable and measurable. Corrective
measures must be taken if there is a deviation
from the set standard.
4) Evaluate the performance – must be free
from bias, double standard or any form of
injustice. Evaluation should be based totally on
work performance, not on employee’s
attributes.

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Who does the Appraising?
1. The Immediate Supervisor – responsible to
do 90% of all performance appraisal. The most
qualified person to evaluate (has power to
control rewards and punishments)
2. The Next Most Immediate – to reassess the
appraisal by supervisor to avoid personal bias.
3. Peer Appraisal – close proximity enables
peer to observe each other’s task and
interpersonal behavior- possibly the single best
informed source for performance appraisal
(e.g. attendance, attitude, safety, adaptability,
teamwork)

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 Who does the Appraising?...

4. Self-Appraisal – employees may feel that they are

given freedom to determine their own future. The key
success depends on the mutual trust between
managers and employees.
5. Subordinate’s Appraisal of Supervisor – anti-
hierarchical. Both managers and employees fell
uncomfortable with the system. Managers are more
likely not to accept the rating by the employees.

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 Who does the Appraising?...

6. Internal or External Clients – a 360º turn, customers,

employers, and employees to evaluate their own
workers, and also the entire organization (Production
dept. to do appraisal on the account dept, etc). Every
dept. will look for its strengths and weaknesses
compare with others.
7. Independent Trained Observers /external
consultants
- neutral body hired to conduct appraisal of an
organization. Decisions made by them will be more
respected, accepted, and trusted. It may inherent cost,
so is only suitable in evaluating higher level of
managers.

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360 Degree Performance Appraisal

In today’s organization, employees must

be more proactive and flexible in fulfilling
their customers’ increasing demands
and needs. The challenge for all
organizations is to trying prosper in this
information age and knowledge era to
take full advantages of their human
resource potentials.

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 360 Degree Performance Appraisal
Characteristics
1. Involves more than 1 assessor or source to make
evaluation.
2. Several people besides the immediate supervisor will
review the performance of an employee.
3. The other source include people who have direct
working contact with the employee such as his peers,
subordinates and his internal as well as external
customers.
4. Feedback from multiple sources will give better
overview of employee’s performance as each assessor
will have his/her own opinion about employee (Pollack
& Pollack, 1996; Edwards, 1996)
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 360 Degree Performance Appraisal
Supervisors &
Management
Customers

Peers

Employee

Subordinates &
Self Internal
Customers

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Benefits of A 360 – Degree Performance
Appraisal

 Increase employees’ awareness of their

strengths and weaknesses.
 Motivate behavior improvements in commented
areas.
Improve communication and relationship
between employees and their appraisers.
 Reduce bias or unfair evaluation from one
source.

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Benefits of A 360 – Degree
Performance Appraisal ... contd
 Identify skills needed by employees to
master in their present job or prepare for a
new one.
 Promote continuous learning and
development in the organization.
 Increase accountability of employees to
their internal and external customers.

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THANK YOU..

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