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COMPANY
PERFORMANCE APPRAISAL

The Role of Performance Appraisal


in Compensation Decisions
To guide for allocation of merit increases
Performance ratings influenced by :
Employee
behavior
observed by
raters

Economic
conditions

Interdepartmental
status
differences

Organization
values

Competitors
among
department

Dissatisfaction about Appraisal Process


Less satisfied with their firm
Less committed
Less satisfied with their pay
Turnover occur
Reason : appraisal too subjective unfair treatment by
supervisor

Improve Performance Appraisal


1. Recognize that part of performance is influenced by
the work environment & system than by employee
behavior
2. Concern on identifying strategies for understanding
& measuring job performance better

Common error in Appraisal


Process
1.
2.
3.
4.
5.
6.
7.
8.
9.

Halo error
Horn error
First impression error
Recency error
Leniency error
Severity error
Central tendency error
Clone error
Spillover error

Common error in Appraising


Performance
Errors in observation
Errors in storage & recall
Errors in the actual evaluation
Factors lead rater to give inaccurate appraisal
:
Guilt
Embarrassment about giving praise
Taking things for granted
Spending little time on preparation of the
appraisal

PERFORMANCE EVALUATION
PROCESS
1. Establishing the performance appraisal
dimensions and scales.
2. Involve employees in every stage of developing
performance dimensions and building scales.
3. Ensure raters are trained in use of appraisal
system.
4. Ensure that raters are motivated to rate
accurately.
5. Ensure that raters are maintained diary of
performance.
6. Raters should attempt a performance diagnosis.

6 ISSUES IN SETTING UP A
PERFORMANCE APPRAISAL SYSTEM
Give specific written instructions on how to complete
the appraisal
Incorporate clear criteria for evaluating performance
Presence of adequately developed job descriptions
provides a rational foundation for personnel decisions
Require supervisor to provide feedback
appraisal results to the employees affected

about

Incorporate a review of any performance rating by a


higher-level supervisor
Consistently suggest that the key to fair appraisals
depends on consistent treatment across raters,
regardless of race, color, religion, sex or national
origin

Strategies for better understanding


and measuring job performance
Make sure your appraisal format is
good !
Make sure rater is qualified and
suitable !
Make sure you know the process !!
Give a training to rater to become
more expert !

1. Make sure your appraisal format is good !

Factors of good appraisal format


Enhance employee development
Easy for administrative decision
considerable in cost and time
valid and accurate

Types of appraisal format


Ranking
Straight ranking method
Alternation ranking
Paired comparison ranking method

Rating
Standard rating scale
Behaviorally Anchored Rating Scales
(BARS)
Management By Objectives (MBO)

2. Make sure rater is qualified and suitable !

Who is your rater ??


supervisor
peer
subordinate
self
customer

Make sure you know the process !!


Process :1. Observe rates behavior
2. Encode behavior
3. Store information in memory
4. Review
5. Information can be reconsidered
with other information

4. Give a training to rater to become more expert !

An example of training:
Rater error training
Performance dimension training
Performance - standard training