“In the name of Allah, most Merciful & most Compassionate.

"
Performance
Appraisal
Introduction
 Performance Appraisal means evaluating an
employee’s current and/ or past performance
relative to his or her performance standards.


 Performance Appraisal is the process by which

organizations evaluate individual job
performance.
Performance Appraisal…..


• Involves measurement of employee

performance.
• The evaluation is based on criteria.
• It generates information which may
be used for:
– Administrative purposes
– Development purposes
– Research purposes
• An integral part of PMS
–
 SIGNIFICANCE OF
PERFORMANCE APPRAISAL
 PURPOSE OR AIM
 Generally, the aims of a performance
appraisal are to:


 Give feedback on performance to employees.

 Identify employee training needs.
 Document criteria used to allocate
organizational rewards.
 Form a basis for personnel decisions: salary
increases, promotions, disciplinary actions,
etc.
 Provide the opportunity for organizational
diagnosis and development.
 Facilitate communication between employee
and administration.
 Purpose or Aim

The objectives of performance appraisal are:

 

1. To help better current performances

2. To help in development of the employee.
3. To determine training and development needs.
4. To give employee feedback and counsel them
5. To review performance for salary purposes
KINDS OF PERFORMANCE
APPRAISAL
USES OF PERFORMANCE
APPRAISAL
Administrative Uses :
Organizations generally use performance

appraisals in two potentially conflicting roles.



 Productivity  Performance Appraisal  Rewards



Development Uses :
In that role managers acts more as counselor
than as judge, which may change the atmosphere of the
relationship. The developmental type of performance
appraisal emphasizes identifying potential and
planning employee’s growth opportunities and direction
 Uses of PA

 Performance appraisal is also be used

for :


 performance improvement
compensation adjustments
placement decisions
training and development need
carrier planning and development
staffing process deficiency
job-design errors
equal employment opportunity
external changes and
INFORMAL VS . SYSTEMATIC
APPRAISAL
 ADVANTAGES AND
DISADVANTAGES OF
PERFORMANCE APPRAISAL
 Advantages


 Having employee’s rate managers provides

three primary advantages.


1. In critical manager-employee relationships,

employee ratings can be quite useful in
identifying competent managers.
2. This type of rating program can help make the
manager more responsible to employees.
3. Employee appraisal can contribute to career
development efforts for managers.
•
  Disadvantages


1. A major disadvantage of receiving employee

ratings is the negative reaction many
superiors have to being evaluated by
employees.
2. The “proper” nature of manager-employee
relations may be violated by workers rating
managers.
3. Also, the fear of reprisals may be too great for
employees to give realistic ratings.
4. The traditional nature of most organizations
restricts the applicability of employee rating
to self improvement purposes.

 Elements of
Performance Appraisal
System
 Performance elements tell employees what they have
to do and standards tell them how well they have to
do it.


• Performance Standards
– Cost-Effectiveness
– Quantity
– Timeliness
– Quality
–
• Performance Measures
– Subjective
TYPES OF PERFORMANCE
INFORMATION

Managers receive three different types of

information about how employees are
performing their jobs.


1.Trait-based information
2.Behavior-based information
3.Results-based information
 STEPS IN APPRAISING
PERFORMANCE
 The performance appraisal process itself
contains three steps:


• Define the Job:

 Defining the Job means making sure that you
and your subordinate agree on his or her duties
and job standards.
• Appraise Performance:
 Appraising performance means comparing
your subordinate’s actual performance to the
standards that have been set; this usually
involves some type of rating system.
• Feedback:
 Performance appraisal usually requires one
or more feedback sessions.
 APPRAISAL PROCESS
There are several ways to appraise subordinate’s


performance.


1. Appraisal’s plays an integral role in the employer’s

performance management process; it does little
good to translate the employer’s strategic goals
into specific employee’s goals, and then train the
employees.
2. The appraisal lets the boss and subordinate develop
a plan for correcting any deficiencies.
3. Appraisals should serve a useful career planning
purpose by providing the opportunity to review
the employees’ career plans in light of his or her
exhibited strengths and weaknesses.
4. The appraisal almost always affects the employer’s
salary raise and promotional decisions.

 Past-oriented
Appraisal Methods
 In the beginning, performance appraisal
began only as a simple method of income
justification. It was used to decide whether
salary or wage of an individual employee
was justified or not


 It was only in the 1950s that performance

appraisal came to be recognized as a
useful tool to motivate and develop the
employee potential.
a)ESSAY EVALUATION
 Essay evaluation is a non-quantitative technique.
This method is advantageous in at least one sense,
i.e., the essay provides a good deal of information
about the employee and also reveals more about
the evaluator.


The essay evaluation method however, suffers from



the following limitations:

 It is highly subjective.
 Some evaluators may be poor in writing
essays on employee performance. Others may
be superficial in explanation and use
flowery language .
 The appraiser is required to find time to
prepare the essay.
 It involves documenting in written format
SAMPLE
 b) CRITICAL INCIDENT
TECHNIQUE
 These critical incidents or events
represent the outstanding or poor
behavior of employees on the job


 This method provides an objective

basis for conducting a thorough
discussion of an employee’s
performance


 Most frequently, the critical incidents

technique of evaluation is applied to
evaluate the performance of superiors
SAMPLE
c)CHECKLISTS AND
WEIGHTED

CHECKLISTS
It is a set of objectives or descriptive statements
about the employee and his behavior.


A more recent variation of the checklist method is the



weighted list


The checklist method has a serious limitation:



 The rater may be biased in distinguishing the

positive and negative questions.
 This method is expensive and time consuming.
 It becomes difficult for the manager to
assemble, analyze and weigh a number of
statements about the employee’s characteristics,
contributions and behaviors SAMPLE
 d) FORCED CHOICE
 This is done by requiring the appraiser to select
"which of two descriptions in a pair better
describe the subordinate". The choice of answers
are written in such a way that both seem equally
favorable or possibly unfavorable, thus removing
to a large degree the possibility of bias

e ) GRAPHIC RATING SCALE

Under this method, a printed form is used to evaluate
the performance of an employee. A variety of traits
may be used in these types of rating devices, the
most common being the quantity and quality of work.
SAMPLE
It is a combination of the rating scale and critical
incident techniques of employee performance
evaluation.


Critical incidents occur when employee behaviors

f)BEHAVIORALLY


result in unusual success or failure on some part of

the job"ANCHORED RATING
The most obvious disadvantage with this technique

SCALES
is "the amount of time and professional expertise
that is required to develop appropriate anchors.”
EXAMPLE
 Future-oriented
Appraisal
 Future-oriented appraisals focus on
future performances goals. Four
common approaches to evaluating
future performance are:


• Self-appraisal
• MBO
• Psychological appraisals
• Assessment canters
 a) SELF-APPRAISALS

Self--appraisal can be a useful evaluation



technique if the goal of evaluation is to further

self-development. When employees evaluate
themselves, defensive behavior is less likely to
occur and self-improvement is thus more likely.
The risk is that the employee will be too lenient or
too critical or his or her force, home-office, HR
specialist must be aware of cultural differences
that may lead to evaluations.
 b)MANAGEMENT BY
OBJECTIVES (MBO)
 Management by objectives can be described
as “a process whereby the superior and
subordinate managers of an organization
jointly identify its common goals, define each
individuals’ major areas of responsibility in
terms of results expected of him and use
these measures as guides for operating the
unit and assessing the contributions of each
of its members”


 This would inevitably enable subordinates to

exercise self-control over their performance
behaviors.



Features of MBO
qIt is “a dynamic system which seeks to integrate the
company’s need to clarify and achieve its profit and growth

targets with the manager’s need to contribute and develop him”.
qIt allows the subordinate plenty of room to make creative
decisions on his own.
qMBO emphasizes participative set goals that are tangible,
verifiable and measurable.
qMBO focuses attention on what must be accomplished (goals)
rather than how it is to be accomplished (methods).
 c) PSYCHOLOGICAL
APPRAISAL
 The psychologist writes an evaluation of the
employee’s intellectual, emotional, motivational
and other work related characteristics.

d )A S S E S S M E N T C E N T E R S
Assessment centers are a form of standardized employee
appraisal that relies on multiple types of evaluation and
multiple raters. They are usually applied for managers who
appear to have the potential to perform more responsible
jobs. Assessment centers are both time-consuming and
costly.
Appraisal is conducted periodically, either annually


or twice a year. The weakness and strengths and

opportunities for improvement and skill
development of the subordinate are discussed on a
healthy platform. Poor performers are counseled to
perform better. In extreme cases, demotion,
MODERN APPRAISAL
dismissal or decrease of pay is resorted to. The
modern approach to performance appraisal is a
developmental approach. This recognizes
employees as individuals and encompasses the
goal setting process.
 Popularity of Performance
Methods
• Rating Scales – 51%
• Essays – 23%
• MBOs – 17%
• Other forms – 9%
APPRAISAL FEEDBACK


Organizations commonly require managers
to discuss appraisal with employees. The
appraisal feedback interview provides an
opportunity to clear up any misunderstanding
on both sides.


 Reactions of Managers
 Reactions of Appraised Employees
 360-Degree Feedback
q Unclear Standards
q Central Tendency
q Leniency
q Strictness
q Halo Effect
q Bias
q Deficient
qPOTENTIAL RATING SCALE
Contaminated Criteria
qAPPRAISAL
Criticism PROBLEMS/

ERRORS
 How to Avoid Appraisal
Problems?
q learn and understand the potential problems and
the solutions for each.
q use the right appraisal tool
q train supervisors to reduce rating errors such as
halo, leniency and central tendency.
q diary keeping is worth the effort
little Know - h
 Know Your Employment
Law
 Appraisals affect promotions, raises and
dismissals. Since passage of Title VII in 1964,
courts have therefore addressed the link
between appraisals and personnel actions.
They have often found that the inadequacies of
an employer’s appraisal system lay at the root
of illegal discriminatory actions, particularly in
cases concerning layoffs, promotion,
discharges, merit pay or combinations of these.
 The court concluded that the practice was
illegal because:
 The firm based on appraisals on subjective
supervisory observations.
 It didn’t administer and score the appraisals in
a standardized fashion.
 Two of the three supervisory evaluators did not
Most companies require managers to conduct
appraisals once or twice a year, most often annually.
New employees commonly receive an appraisal 60-
90 days after employment, again at 6 months, and
annually thereafter, “Probationary employees” who
TIMING OF APPRAISALS
are new and in a trial period should be informally
evaluated often perhaps weekly for the first month
and monthly thereafter until the end of the
introductory period. After that, annual reviews may
be sufficient.
 Effective Performance
Appraisal
 Understand the importance and purpose of
performance appraisals.
Learn the types and methods of
performance appraisal.
Identify the barriers to effective
performance appraisals and ways to
overcome them.
Conduct a performance appraisal
discussion.
Develop skills to conduct an effective
performance appraisal in a win-win
approach.
q Lack of clarity about the purpose

PROBLEMS OF PA
q Linking appraisal with pay
q Keeping information secret from the employer.
q Subjective or attacks on the appraisee’s
character
q Appraisal as part of the disciplinary process.