PERFORMANCE APPRAISAL

INTRODUCTION & OBJECTIVES Performance appraisal is an objective assessment of an individuals performance againstwell defined benchmarks.According to Garry Desseler, A process that consolidates goal setting, performanceappraisal and development into single, common system, the aim of which is to ensure thatthe employees performance is supporting the companys strategic aims. WHY PERFORMANCE MANAGEMENT? The increasing use of Performance management reflects several things. It reflects, first,the popularity of the Total Quality Management (TQM) concepts advocated several yearsago by management experts like W. Edwards Deming. Basically, Deming argued that anemployees performance is more a function of things like training, communication, tools,and supervision than of his or her own motivation.Performance

Management emphasis on the integrated nature of goal setting, appraisal,and development reflects this assumption. Second, it reflects the fact that a vast array of s t u d i e s t h a t t r a d i t i o n a l p e r f o r m a n ce appraisal are often not just useles s b u t counterproductive. Third, Perfor mance management as a process also e xplicitlyrecognizes that in todays globally competitive industrial environment, every employeesefforts must focus like a laser on helping the company to achieve its strategic goals. Inthat regard adopting an integrated; perf ormance management approach to guidin g,developing, and appraising employees also aids the employers continuous improvementefforts. Continuous improvement refers to a management philosophy tha t requiresemployers to continuously set and relentlessly meet ever-higher quality, cost, delivery,and availability goals.

OBJECTIVE OF PERFORMANCE APPRAISAL Data relating to performance assessment of employees are recorded, stored, and used for several purposes. The main purposes of employee assessment are:1 1.To effect promotion based on competence and performance.2.To confirm the services of probationary employees upon their completing the probationary period satisfactorily.3.To assess the training and development needs of employees.4.To decide upon a pay rise where (as in the unorganized sector) regular pay scaleshave not been fixed.5.To let the employees know where they stand insofar as their performance isconcerned and to assist them with constructive criticism and guidance for the purpose of their development.6.To improve communication. Performance appraisal provides a format for dialogue between the superior and the

subordinate, and improves understanding of personalgoals and concerns. This can also have the effect of increasing the trust betweenthe rater and the ratee.7.Finally, Performance appraisal can be used to determine whether HR programssuch as selection, training, and transfers have been effective or not.Broadly, performance appraisal serves four objectives-(1) Developmental uses, (2)Administrative uses/decisions, (3) Organizational maintenance/ objectives, and (4)Documentation purposes. TYPES OF PERFORMANCE APPRAISAL SYSTEM:Graphic Rating Scale Method The Graphic Rating Scale is the simplest and still most popular technique for appraising performance. A Graphic Rating Scale lists traits (such as quality and reasonability) and arange of performance values (from unsatisfactory to outstanding) for each trait. Thesupervisor rates each subordinate by circling or

checking the source that best describeshis or her performance for each trait. The assigned values for the traits are then totaled. Alternation Ranking Method Ranking employees for the best to worst on a trait or traits is another option. Since, it isusually easier to distinguish between the worst and best employees, and Alternation2 Ranking Method is most popular. First, list all subordinate to be rated, a then close out thenames of any not known well enough to rank. Then, on a form the employees who ishighest on the characteristics being measured and also the one who is the lowest. Thenchoose the next highest and the next lowest, alternating between highest and lowest untilall employees have been ranked. Paired Comparison Method The Paired Comparison Method helps make the Ranking Method precise. For every trait(quantity of work, quality of work, and so on), you pair and compare every

subordinatewith every other subordinate.Suppose you have five employees to rate. In the Paired Comparison Method, you make achart, of all possible pairs of employees for each trait. Then, for each trait, indicate (witha+ or a-) who is the best employee of the pair. Next, add up the no. of +s for eachemployee. Forced Distribution Method The Forced Distribution Method is similar to grading on a curve. With this method, you place predetermined percentage of ratees into performance categories.For example, you may decide to distribute employees as follows.15% High Performers20% HighAverage Performers30% Average Performers20% Low-Average Performers15% Low Performers Critical Incident Method With the Critical Incident Method, the supervisor keeps a log of positive and negativeexamples (Critical Incidents) of a subordinates work-related behavior. Every six

monthsor so, supervisor and subordinate meet to discuss the latters performance, using theincidents as example.3