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Performance Appraisal

Performance appraisals are annual reviews that assess an employees performance. They create a
permanent record that the employer uses for various reasons. The human resources department
uses performance appraisals to create better job descriptions over time, determine the best rate of
pay for the job and establish performance metrics for the position.
Performance appraisals help determine an employees raises and future promotions. Managers
inform employees what their raise is after assessing their performance. Additionally, when an
employee applies for other jobs internally, interviewing managers review performance appraisals.
They assess the employees strengths and weakness, using information in the performance
appraisal. Performance appraisals help interviewing managers decide whether to hire a job
candidate or not.
Most employees do not like performance appraisals, because they are subjective. Managers
providing feedback do not define performance in the same way. In fact, there is a tendency for
managers to be too lenient, allowing underperformers to receive similar raises to high achievers.
Employees also dislike the way some managers provide feedback. Managers tend to document
problematic areas and situations throughout the year and then itemize the occurrences at the end of
the year, in one feedback session. Employees see the practice as overwhelming, and it does not help
those correct problems immediately.
The process by which a manager or consultant (1) examines and evaluates an employee's work
behaviour by comparing it with pre-set standards, (2) documents the results of the comparison, and
(3) uses the results to provide feedback to the employee to show where improvements are needed
and why.
Performance appraisals are employed to determine who needs what training, and who will be
promoted, demoted, retained, or fired.
Evaluation system and feedback system are two basic systems in an effective performance appraisal.
The main aim of the evaluation system is to identify the performance gap, and the shortfall that
occurs when performance does not meet the standard set by the organization as acceptable. The
main aim of the feedback system is to inform the employee about the quality of his/her
The information flow is not exclusively one way. The appraisers also receive feedback from the
employee about job problems. Looking at performance appraisal from the different viewpoints of
the main stakeholders, the employee and the organization is one of the best ways to appreciate the
purposes of performance appraisal. From the employee viewpoint, the purpose of performance
appraisal is four-fold: Tell me what you want me to do, tell me how well I have done it, Help me
improve my performance, and Reward me for doing well. From the organization's viewpoint, one of
the most important reasons for having a system of performance appraisal is to establish and uphold
the principle of accountability. The performance appraisal process typically consists of four inter-
related steps as follows:
Establish a common understanding between the manager (evaluator) and employee (evaluatee)
regarding work expectations, mainly, the work to be accomplished and how that work is to be
Ongoing assessment of performance and the progress against work expectation. Provisions should
be made for the regular feedback of information to clarify and modify the goals and expectations, to
correct unacceptable performance before it was too late, and to reward superior performance with
proper praise and recognition.
Formal documentation of performance through the completion of a performance and
development appraisal form appropriate to the job family.
The formal performance and development appraisal discussion, based on the completed appraisal
form and ending in the construction of a development plan
Objectives of Performance Appraisal:
Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage structure, salaries raises,
2. To identify the strengths and weaknesses of employees to place right men on right job.
3. To maintain and assess the potential present in a person for further growth and development.
4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.
6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance
of employees, a persons efficiency can be determined if the targets are achieved. This very well
motivates a person for better job and helps him to improve his performance in the future.
In this paper, we have discussed the existing performance evaluation appraisal methods with their
advantages and disadvantages. We have also proposed and discussed a new appraisal approach,
which is based on three existing appraisal methods: graphic rating scales, checklist, critical incidents
and management by objectives. This approach has the benefit of all the three methods employed in
one. We discussed about a hierarchical structure of implementing appraisal methods. At each level
of the management, the specific appraisal methods are suggested making no ambiguity. These
methods are appropriately allocated to the various raters at different levels of management. With
the fixed methods to each rater, the goals are set clear and no confusion occurs.
Successful Performance Appraisals
Step one: Preparation.
The key to success in any endeavour is preparation. In this case, preparation means sitting down
and creating objectives for the performance period. We've got to ensure that people know what's
expected of them if we ever expect them to achieve it.
Think of setting objectives as a road map with a set of directions. The roadmap is your
organization, or your industry, and the directions lead employees to their goal. If people don't
know where they're going, how can we ever expect them to get there? How will they know when
they've arrived? It's also critical to get employees' input on their own objectives if we want to
increase their commitment to achieving those goals. If people feel that they have a voice in their
assignments, they will frequently work harder toward the success of those assignments.
Step two: Assessment.
A critical manager responsibility is assessing and giving timely feed back to your staff on their
performance. There are many benefits to doing this. Feedback on performance that is given as
soon as possible has proven to be the most effective. It's not fair or effective to tell someone how
she messed up, or (more rarely) how well she did, weeks after the job is done. Let people know
quickly so they can either address the error or replicate the success.
This also addresses two of the most common fears that managers have about performance
appraisals: confrontations and surprises. Many managers avoid delivering performance reviews
because they fear confrontation. They see it as an "us versus them" event. This is usually a result
of a lack of communication between the manager and staff.
If the performance review is the only time that managers talk with staff about how they're doing,
and especially if employees feel that this one meeting has tremendous impact on their salary
increases, the meeting takes on enormous proportions. With all the tension in the room, how can
it be a successful interchange? Most employees, when questioned as to what the once-a-year
review reminded them of, responded, "A trip to the principal's office." Ongoing communication
throughout the year is the key to reducing the fear and anxiety associated with this meeting for
both participants.
When asked what they want out of the performance review meeting, both manager sand staff
most often respond, "No surprises." This is what I hear even more often than a hope for the
highest rating. Not everyone expects to be a superstar, but people want to know how they are
doing. They don't want to have it sprung on them at the last minute, when they no longer have
the opportunity to do anything about it. They want to be treated with respect and as partner s
throughout the performance cycle. Continuous assessment and feedback is the key to ensuring
that there are no surprises, which of course also lessens the likelihood of a confrontation.
Surprises beget confrontations. Communication prevents them.
Step three: Reviewing documents.
Before you actually do sit down with the employee, review all your documentation from the year.
Take a look again at the objectives that you and the employee agreed to and documented at the
beginning of the year. Look for any commendations or letters you may have received about the
employee during the year.
Review your notes from the meetings that you've had with the employee. Then sit down and write
the first draft of the performance review. Some organizations offer the employee the opportunity
to create a first draft as well. Then the manager and the employee sit down to review the
employee's progress before the actual review. This keeps the employee involved in the process
and makes him feel that he's getting a fair evaluation. It's another great technique for reducing or
eliminating surprises.
Step four: Appropriate setting.
Make sure that you have an appropriate setting in which to deliver the appraisal. The most
commonly used location, a manager's office, is often the worst place. Its not neutral territory
(remember that principal's office analogy), and no matter how much rapport-building you do or
how long you've worked with the employee, its still "your turf."
A conference room is often best, but if that's not available, find some other place. Be creative. The
cafeteria may not seem like a very private place, but in between mealtimes, it's often possible to
find a secluded table in a corner. You want the setting to relax employees, not add to their
anxiety. This is one reason to avoid restaurants. Some managers choose to do appraisals over
lunch. It's a way to reward the employee, but restaurants at lunch are far from private. Even
employees who expect positive reviews seldom feel particularly hungry when they go into this
Consider meeting in the employee's office if it has a door, or borrowing a colleague's office.
Meeting somewhere other than your office also makes it easier to end the meeting. Getting
someone out of your office when the review is completed, particularly if the person thinks there is
more to discuss, can be particularly onerous. It tends to reek of dismissal. This can undercut even
the most positive of appraisals.
Step five: Deliver it clearly.
Deliver the appraisal in simple language. Don't use code or jargon, and don't mince words. Don't
dance around the issue at hand even if the appraisal is not as positive as the employee might have
hoped. She'll pick up on your discomfort like a shark sensing blood in the water. If she feels that
you're not confident in your appraisal, she may think that there is a last-minute chance to improve
it. This isn't a meeting to renegotiate the objectives or the standards for performance that were
set at the beginning of the year.
This advice on clarity goes for both good news and bad! When it comes to good news, some
managers avoid it because they're afraid to tell an employee she has done a good job. "What if I
have to fire her someday?" they ask. I tell them that if the employee has done a good job, tell her
so. If you have to fire that employee someday, you will have a good reason why. You'll be able to
explain it to the employee because you will have developed the necessary communication skills.
More often, managers feel a need to hide the bad news. They're afraid to hurt the employee's
feelings, they fear an argument, or they just don't like to talk about someone's shortcomings.
Many managers feel that if the employee hasn't done as well as expected or hoped, this is a poor
reflection on the manager .If someone's performance has been subpar, managers owe it to the
employee, the organization, and themselves to inform the employee.
By glossing over employees' performance deficits or inflating their ratings to spare their feelings,
managers are actually exposing the company and themselves to great liability. If managers have
been doing the assessment and feedback throughout the year, there is little likelihood that there
will be any confrontation or conflagration at the review meeting. Tell people straight out what
they've done well and where they need to improve. They'll respect you for it, and your credibility
and standing as a manager will rise because of it.
Step six: Encouragement.
At the conclusion of the performance appraisal meeting, which also marks the end of one
performance appraisal cycle and the beginning of the next, your job is to encourage. You want to
motivate the employee to continue doing that which he does well and to improve in the areas
where there is room for growth. This is the best way to make these meetings productive and
positive. Even if the person's appraisal has not been as high as he might have hoped, remind the
employee that he is still valued and that you'll support him in his development.
Offer to set up a separate meeting at which you will discuss his development plan. This is a terrific
way to let the employee know that you support him and are willing to invest your time and the
organization's training dollars in his growth in the company. The performance management
process is actually the organization's best retention tool. Too often, when employees get a less-
than-stellar appraisal, they take it as an indication that this is the beginning of the end. This is the
first step on that dreaded "Documentation Trail" that can only lead to the door. Let them know
that you believe in them and their ability to improve. Your willingness to work with and invest in
them is a wonderful turn around tool to effect an attitude adjustment.
Performance Appraisal Common Mistakes
Where performance appraisal fails to work as well as it should, lack of support from the top levels
of management is often cited as a major contributing reason.
Opposition may be based on political motives, or more simply, on ignorance or disbelief in the
effectiveness of the appraisal process.
It is crucial that top management believe in the value of appraisal and express their visible
commitment to it. Top managers are powerful role models for other managers and employees.
Those attempting to introduce performance appraisal, or even to reform an existing system, must
be acutely aware of the importance of political issues and symbolism in the success of such
Fear of Failure
There is a stubborn suspicion among many appraisers that a poor appraisal result tends to reflect
badly upon them also, since they are usually the employee's supervisor. Many appraisers have a
vested interest in making their subordinates "look good" on paper.
When this problem exists (and it can be found in many organizations), it may point to a problem in
the organization culture. The cause may be a culture that is intolerant of failure. In other words,
appraisers may fear the possibility of repercussions - both for themselves and the appraisee.
Longenecker (1989) argues that accuracy in performance appraisal is impossible to achieve, since
people play social and political games, and they protect their own interests. "No savvy
manager...", says Longenecker, "... is going to use the appraisal process to shoot himself or herself
in the foot."
No matter what safeguards are in place, "... when you turn managers loose in the real world, they
consciously fudge the numbers." What Longenecker is saying is that appraisers will, for all sorts of
reasons, deliberately distort the evaluations that they give to employees.
Indeed, surveys have shown that not only do many managers admit to a little fudging, they
actually defend it as a tactic necessary for effective management.
The fudging motives of appraisers have, at times, a certain plausibility. For instance, a supervisor
who has given an overly generous appraisal to a marginal performer might claim that their
'legitimate' motive was the hope of encouraging a better performance.
On the other hand, fudging motives can be a lot less admirable and sometimes devious: the
appraiser who fudges to avoid the possibility of an unpleasant confrontation, the appraiser who
fudges to hide employee difficulties from senior managers, the appraiser who fudges in order to
punish or reward employees.
Judgement Aversion
Many people have a natural reluctance to "play judge" and create a permanent record which may
affect an employee's future career. This is the case especially where there may be a need to make
negative appraisal remarks.
Training in the techniques of constructive evaluation (such as self-auditing) may help. Appraisers
need to recognize that problems left unchecked could ultimately cause more harm to an
employee's career than early detection and correction.
Organizations might consider the confidential archiving of appraisal records more than, say, three
years old.
Larson (1989) has described a social game played by poor performers. Many supervisors will
recognize the game at once and may have been its victims.
The game is called feedback-seeking. It occurs where a poor performing employee regularly seeks
informal praise from his or her supervisor at inappropriate moments.
Often the feedback-seeker will get the praise they want, since they choose the time and place to
ask for it. In effect, they "ambush" the supervisor by seeking feedback at moments when the
supervisor is unable or unprepared to give them a full and proper answer, or in settings that are
inappropriate for a frank assessment.
The supervisor may feel "put on the spot", but will often provide a few encouraging words of
support. The game seems innocent enough until appraisal time comes around. Then the
supervisor will find that the employee recalls, with perfect clarity, every casual word of praise ever
This places the supervisor in a difficult bind. Either the supervisor lied when giving the praise, or
least, misled the employee into thinking that their performance was acceptable (in fact, this is the
argument that feedback-seekers will often make).
The aim of the game is that the feedback- seeker wants to deflect responsibility for their own poor
performance. They also seek to bolster their appraisal rating by bringing in all the "evidence" of
casual praise. Very often the feedback seeker will succeed in making the supervisor feel at least
partly responsible. As a result, their appraisal result may be upgraded.
Was the supervisor partly responsible? Not really. The truth of the matter is that they have been
"blackmailed" by a subtle social game. But like most social games, the play depends on the
unconscious participation of both sides. Making supervisors aware of the game is usually sufficient
to stop it. They must learn to say, when asked for casual praise, "I can't talk about it now... but see
me in my office later."
This puts the supervisor back in control of the appraisal process.
Appraiser Preparation
The bane of any performance appraisal system is the appraiser who wants to "play it by ear". Such
attitudes should be actively discouraged by stressing the importance and technical challenge of
good performance appraisal. Perhaps drawing their attention to the contents of this web site, for
example, may help them to see the critical issues that must be considered.
Employee Participation
Employees should participate with their supervisors in the creation of their own performance
goals and development plans. Mutual agreement is a key to success. A plan wherein the employee
feels some degree of ownership is more likely to be accepted than one that is imposed. This does
not mean that employees do not desire guidance from their supervisor; indeed they very much do.
Performance Management
One of the most common mistakes in the practice of performance appraisal is to perceive
appraisal as an isolated event rather than an ongoing process.
Employees generally require more feedback, and more frequently, than can be provided in an
annual appraisal. While it may not be necessary to conduct full appraisal sessions more than once
or twice a year, performance management should be viewed as an ongoing process.
Frequent mini-appraisals and feedback sessions will help ensure that employees receive the
ongoing guidance, support and encouragement they need.
Of course many supervisors complain they don't have the time to provide this sort of ongoing
feedback. This is hardly likely. What supervisors really mean when they say this is that the
supervision and development of subordinates is not as high a priority as certain other tasks.
In this case, the organization may need to review the priorities and values that it has instilled in its
supervisory ranks. After all, supervisors who haven't got time to monitor and facilitate the
performance of their subordinates are like chefs who haven't got time to cook, or dentists who are
too busy to look at teeth. It just doesn't make sense.
If appraisal is viewed as an isolated event, it is only natural that supervisors will come to view
their responsibilities in the same way. Just as worrying, employees may come to see their own
effort and commitment levels as something that needs a bit of a polish up in the month or two
preceding appraisals.
Why Does Most Performance Management, or Appraisal, Fail?
Its true that many companies implement performance management and performance appraisal in
ways that virtually guarantee that it will fail. And so that's often what happens. There are
probably ten or fifteen reasons why it fails far more often that it should. Some have to do with
mind-set, and some have to do with techniques used. Here are a few.
believing performance management is about filling out forms
focusing on blaming employees rather than helping employees and working together
focusing on the past, rather than anticipating problems and focusing on the present or
doing performance appraisals TO employees rather than with them
spending too much time appraising, and not enough time during the year planning and
making it a once a year event
using poor and misleading tools, forms and software
expecting performance management to achieve too many different and often competing
purposes and functions .