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Performance Appraisal

Performance Appraisal
Performance Appraisal (PA) refers to all those procedures that are used to evaluate the personality, performance and potential of its group members. Performance Appraisals are yearly or monthly evaluations given to employees. They evaluate the needs of the employee and supervisor. Performance Appraisal is the process by which organizations evaluate employee job 2 performance.

Uses of Performance Appraisal

Raises, Merit Pay, Bonuses

Personnel Decisions (e.g. promotion, transfer, dismissal)

Identification of Training needs

Research purposes (e.g. assessing the worth of selection tests

Steps in performance appraisal

Establishing job standards Designing an appraisal programme

Appraise performance
Performance interview Use appraisal data For appropriate purpose

Objective of Performance Appraisal

To help better current performances To help in development of the employee. To determine training and development needs. To give employee feedback and counsel them To review performance for salary purposes.

Process of Performance Appraisal

Setting performance standards

Taking corrective standards

Communicating standards

Discussing results Comparing standards

Measuring standards

Issues in appraisal system

Formal and informal What methods? Whose performance?

When to evaluate? Appraisal Design?

Who are the raters?

What to evaluate? How to solve?

What problems?

Benefits of Performance Appraisal

For the Appraisee For the Management For the Organization

Benefits of Performance Appraisal

For the Appraisee

Better understanding of his role in the organization what is expected and what needs to be done to meet those expectation Clear Understanding of his strengths & weaknesses to develop himself into a better performer in future Increased motivation, job satisfaction, and self esteem Opportunity to discuss work problems and how they can be overcome Opportunity to discuss aspirations and any guidance, support or training needed to fulfill those aspirations Improved working relationships with supervisors

Benefits of Performance Appraisal

For the Management

Identification of performers and non-performers and their development towards better performance Opportunity to prepare employees for assuming higher responsibilities Opportunity to improve communication between the employees and management Identification of training and development needs Generation of ideas for improvements Better identification of potential and formulation of career plans


Benefits of Performance Appraisal

For the Organization

Improved performance throughout the organization Creation of a culture of continuous improvement and success Conveying the message that people are valued


Methods of Performance Appraisal

Individual Evaluation Methods Multiple Person Evaluation Methods
Other Methods


Methods of Performance Appraisal

Individual Evaluation Methods Confidential report Essay evaluation Critical incidents

Graphic rating scale Behaviorally anchored rating scale (BARS)

Forced choice method

Management by Objective (MBO)

Methods of Performance Appraisal

Multiple Person Evaluation Methods
Ranking Paired comparison Forced distribution


Methods of Performance Appraisal

Other Methods
Group Appraisal Field review technique 3600 Appraisal System


Individual Evaluation Methods Confidential Report

Descriptive report Prepared at the end of the year Prepared by the employees immediate supervisor

The report highlights the strengths and weaknesses of

employees Prepared in Government organizations

Does not offer any feedback to the employee


Individual Evaluation Methods Essay Evaluation

The rater is asked to express the strong as well as weak points of employees behavior The rater considers the employees :
Job knowledge and potential Understanding of companys programs, policies, objectives etc Relation with co-workers and supervisors Planning, organizing and controlling ability Attitude and perception


Individual Evaluation Methods Critical Incidence

Manager prepares lists of statements of very effective and ineffective behavior of an employee These critical incidents represent the outstanding or poor behavior of the employees The manager periodically records critical incidents of employees behavior


Individual Evaluation Methods Checklist Method Simple checklist method Weighted checklist method

Forced choice method


Checklist 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


Checklist Method
Weighted Checklist Method


0.5 1.5 1.5 1.5 2.0

rating (scale 1 to 5 )

Regularity Loyalty Willing to help Quality of work Relationship


Checklist Method
Forced Choice Method

1.Regularity on the job
Always regular Inform in advance for delay Never regular Remain absent Neither regular nor irregular

Most Least


Individual Evaluation Methods Graphic Rating Scale

A form is used to evaluate the performance of the employees A variety of traits may be used in this device, the most common being quality and quantity of work Easy to understand and use. Permits statistical tabulation of scores of employees


Individual Evaluation Methods Behaviorally Anchored Rating Scale (BARS)

Step 1.
Step 2.

Identify critical incidents

Select performance dimension

Step 3.
Step 4. Step 5.

Retranslate the incidents

Assign scales to incidents Develop final instrument

Individual Evaluation Methods Forced Choice Method

This method uses several sets of paired phrases, two of which may be positive and two negative The rater is asked to indicate which of the four phrases is the most and least descriptive of a particular worker Favorable qualities earn plus credit and unfavorable ones earn

the reverse


Individual Evaluation Methods Management by objectives (MBO)

MBO emphasizes collectively set goals that are tangible, verifiable, and measurable Focuses attention on goals rather than on methods

Concentrates on Key Result Areas (KRA)

Systematic and rational technique that allows management to attain maximum results from available resources by focusing on achievable



Individual Evaluation Methods Management by objectives (MBO) - Cont Key Element of MBO
Arranging organizational goals in a means-ends chain Engaging in joint goal setting This process has the following steps: Identify KRAs Define expected results Assign specific responsibilities to employees Define authority and responsibility relationship

Conducting periodic progress review

Conducting annual performance review


Multiple Person Evaluation Methods

Ranking method

The evaluator rates the employee from highest to lowest on

some overall criteria

Paired comparison method

Each worker is compared with all other employees in a group For several traits paired comparisons are made, tabulated and then rank is assigned to each worker This method is not applicable when the group is large
Forced Distribution Methods

The rater is asked to appraise the employee according to

predetermined distribution scale. The worker is placed between two extremes of good and bad performance.

Other Methods Group Appraisal

Employee is appraised by a group of appraisers.

The group consists of :
Immediate supervisor of the employee Other supervisors who have close contact with the employees work. Manager or head of the departments. Consultants or Clients


Other Methods Field Review Technique

The appraiser goes to the field and obtains the information about work performance of the employee by way of questioning the said

individual, his peer group, and his superiors


Other Methods 3600 Appraisal System

360 Degree Performance : Combination of self, peer, supervisor, and subordinate performance evaluation

It is a systematic collection and feedback of performance data on an

individual or group, derived from a number of stakeholders

Data is gathered and fed back to the individual participant in a clear way designed to promote understanding, acceptance and ultimately behavior


Appraisal Interview and Feedback - Let the Employee Know Where He Stands
To help employees do a better job by clarifying what is expected of them To plan opportunities for development and growth

To strengthen the superior-subordinate working relationship

by developing mutual agreement of goals To provide an opportunity for employees to express themselves on performance related issues


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