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::Performance Appraisals::

Presented By: Priyanka Balwa MBA-III-B

Performance Appraisal
The systematic, periodic and an

impartial rating of an employees excellence in the matters pertaining to::His present job His potential for a better job

:::Objectives Of Performance appraisal:::

Estimate gap between the actual and the

desired performance. Exercising organizational control. Feedback to the employees regarding their past performance.

Provide clarity of the expectations and responsibilities

of the functions to be performed by the employees.

To judge the effectiveness of the other HR functions

such as recruitment, selection, training and

To reduce the grievances of the employees.

::Appraisals Assist::
Employee Training Needs Assessment

Organizational Performance
Succession Planning TQM Change organizational Culture

Establishing Standards

Communicating Standards and expectations

Measuring the actual performance

Comparing with standards

Providing feedback

Corrective Actions

Pre-requisites for Performance Appraisal

Documentation --continuous noting and

documenting the performance Standards / Goals --should be clear, easy to understand, achievable, motivating, time bound and measurable Practical and simple format - The appraisal format should be simple, clear, fair and objective.

Evaluation technique An appropriate

evaluation technique should be selected Communication Expected results should be communicated to the employees as well as the evaluators Feedback Should be developmental rather than judgmental Personal Bias --evaluators should be trained to carry out appraisals without personal bias

Purpose Of Performance Appraisal

Others Mobility Deciding future goals Gaps T&D needs Payroll 0% 20% 40% 60% 80% 100%

(A Survey of 100 Companies)

Payroll and compensation decisions 80% Training and development needs 71% Identifying the gaps in desired and actual performance

Deciding future goals and course of action 42% Promotions, demotions and transfers 49% Other purposes 6% (job analysis and providing

superior support, assistance and counseling)

Performance Appraisals as Career Development

Get paid according to what you contribute
Performance appraisal as Career Development

leads to the recognition of the work done by the employees

It is a link between the organizational goals and the

employees personal career goals.

Potential appraisal, a part of Performance appraisal,

helps to identify the hidden talents and potential of the individuals

A positive feedback motivates employees to identify

individual career developmental plans

Based on the evaluation, employees can develop :: Their career goals Achieve new levels of competencies Chart their career progression

Performance appraisal encourages employees to

reinforce their strengths and overcome their weaknesses.

::Approaches to Performance Appraisals::

Traditional approach
Traditionally, P.A. has been used as just a

method for determining and justifying the salaries of the employees Than it began to be used a tool for determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past performance of the employees

Traditional Approach
A past oriented approach

Focused only on the

past performance

of the employees
Did not consider the


aspects of the employee performance

Modern approach
Performance appraisal processes are

more formal and

Apart from the routine HR Functions, Modern approach to

performance appraisals includes a feedback process This improves the communication between superiorsubordinates

The modern approach to is a future oriented approach and is developmental in nature. This recognizes employees as individuals and focuses on their development.

Balanced Scorecard
The balanced scorecard provides a list of

measures that balance the organizations internal and process measures with results, achievements and financial measures. The two basic features of the balanced scorecard are:

A balanced set of measures based on. the four perspectives of balanced scorecard Linking the measures to Employee Performance

The 4 key areas::

The financial measures Profits, increase in the market share, return on investments and other economic measures as a result of the actions taken. The customers measures customer satisfaction, the customers perspective about the organisation, customer loyalty, acquiring new customers. Number of customer complaints, The time taken to deliver the products and services, improvement in quality etc.

The internal business measures

These are the measures related to the organizations internal processes which help to achieve the customer satisfaction.

Infrastructure, The long term and short term goals and objectives, Organizational processes and procedures, Systems and the human resources. organization's ability to learn, Innovations and improvements Key competencies Value added and the revenue per employee.

The innovation and learning perspective

Methods of Performance appraisals

Traditional Methods


Modern Methods

Assessment Center Human Resource Accounting Behaviorally Anchored Rating Scales MBO 360 Degree Appraisals

Appraisal as Employee Motivation Mechanism

Inaccurate Performance Review + Increased

Salary = De-motivated Employee Accurate Review + No Change in Salary = De-motivated Employee Accurate Review + Increased Salary = Highly Motivated Employee

Arguments Against Performance Appraisal

Disparities between the theory and its application PA is a bitter process for most of the employees Creates emotional pressures and stress for the employees PA is often looked upon as a tool to control the employees by the superiors which dampen the intrinsic motivation of the employees. PA process increases the dependency of the employees on their superiors

Performance appraisal
. process encourages accountability, approvals and discourages the spirit of creativity and initiative by employees and also Demotivates them are conducted by managers who are often not trained to be appraisers. .This obstructs the genuine feedback, leading to incorrect and unreliable data regarding the performance of the employees Example:: BPOs, Government Organizations Etc


The "appraisals and review meetings",

continuous accountability and check can cause emotional stress for the employees. Therefore, it is recommended to create such a work culture where

the employees are made responsible for their own performance and development the managers / superiors suggestions, inputs are encouraged and incorporated in the actions.

Changing pay practices--Periodic cost of living

increases, rewards on some accomplishments, tem bonuses, profit and gain sharing Motivating peopleChallenging work, Reminding them about their personal goals Creating an organization with a culture that Encourages creativity, Fosters innovative efforts and productivity, Teamwork, Reformulating strategic plans and assumptions but can be effectively put into place without the need of performance appraisals

Performance Appraisal For Employees at Different Levels

For top level management Degree of organizational growth and expansion Extent of achievement of organizational goals Contribution towards the society Profitability and return on capital employed

For middle level managers Performance of the departments or teams Co-ordination with other departments Optimal use of resources Costs Vs. revenues for a given period of time The communication with superiors and subordinates

For front line supervisors Quantity of actual output against the targets Quality of output against the targets Number of accidents in a given period Rate of employee absenteeism

Global Trends In Performance Appraisal Program

The focus of the performance appraisals is

turning towards career development Trend towards a 360-degree feedback system The problems in the performance appraisal processes are being anticipated and efforts are being made to overcome them. Rank and Yank Strategy or Up or Out Strategy Team Performance Appraisal

Points to be Remembered
What is the purpose of performance appraisals? How should the self appraisal be used? How should the ratings be given if there has been a

change of supervisor or manager during the period of the appraisal? How can input/feedback be collected for the appraisal process? What if the employee refuses to agree or/and accept the review? How do you deal with an average or a nonperformer?

:::Don't let employees come into the Performance Appraisal blindly or leave blindly, without a sense of direction or accomplishment!:::