Performance Appraisal:

A performance appraisal is a method by which the job performance of an employee is evaluated typically by the corresponding manager or supervisor. The performance is mainly in terms of quality, quantity, cost or time. A performance appraisal is a part of guiding and managing career development. It is the process of obtaining, analyzing, and recording information about the relative worth of an employee to the organization. Performance appraisal is an analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is also the judgement of an employee's performance in a job based on considerations other than productivity alone.

Purpose of performance appraisal

Why you do performance appraisal? Purpose of performance appraisal includes elements as follows: 1. Career Development This provides an opportunity for discussion of career objectives, and creation of a strategy designed to maximize career potential. To provide an opportunity for career counselling To help in succession planning. To assess training needs To plan for career development To assess and develop individual abilities To provide an objective basis on which to base decisions about training and promotion 2. Feedback As well, feedback is encouraged in both directions: as such, employees are encouraged to prepare ratings of their supervisors. To provide constructive feedback to the individual regarding how their performance is seen. This provides a structured format for the discussion of performance issues on a regular basis. Feedback either reinforces performance strengths, or provides the opportunity to discuss resolution of performance deficiencies.

3. Administrative Uses of Performance appraisal Salary Promotion Retention/termination Recognition of performance Layoffs Identification of poor performers

4. Performance History This provides a performance history which is not dependent upon human memory, and which may be useful in the full range of personnel decisions, including compensation decision-making. To review past and present performance, identifying strengths and weaknesses.

5. Organizational Goals To clarify, for the individual, organizational expectations. This provides an opportunity to view ones performance in the context of broader organizational goals. To assess future promotion prospects and potential To set objectives for the next period

6. Job Standards This provides an opportunity for clearer articulation and definition of performance expectations. 7. Documentation use of Performance appraisal Documentation for HR decisions Helping to meet legal requirements

Benefits of performance appraisal

For the appraise : 1. Increased motivation and job satisfaction. 2. Clear understanding of what is expected and what needs to be done to meet expectations. 3. Opportunity to discuss aspirations and any guidance, support or training needed to fulfil these aspirations.

4. Improved working relationships with the superior. 5. Opportunity to overcome the weaknesses by way of counseling and guidance from the superior. 6. Increased sense of personal value as he too is involved in the appraisal process For the appraiser: 1. Opportunity to develop an overview of individual jobs. 2. Opportunity to identify strengths and weaknesses of appraisees. 3. Increased job satisfaction. 4. Opportunity to link team and individual objectives with department & organizational objectives. 5. Opportunity to clarify expectations that the manager has from teams and individuals. 6. Opportunity to re-prioritize targets. 7. Means of forming a more productive relationship with staff based on mutual trust and understanding. 8. Due to all above increased sense of personal value For the company: 1. Improved performance throughout the organization due to: Increased sense of cohesiveness and loyalty. Managers are better equipped to use their leadership skills and to develop their staff. Effective communication of organizations objectives and values. 2. Improved overview of tasks performed by each member of a group. 3. Identification of ideas for improvement. 4. Creation and maintenance of a culture of continuous improvement. 5. Communication to people that they are valued.

Advantages of performance appraisals:

They provide a document of employee performance over a specific period of time. They provide a structure where a manager can meet and discuss performance with an employee. They allow a manager the opportunity to provide the employee with feedback about their performance and discuss how well the employee did with completing their goals.

They provide a structured process for an employee to clarify expectations and discuss issues with their manager. They provide a structure for thinking through and planning the upcoming year and developing employee goals. They can motivate employees if supported by a good reward and compensation system.

Disadvantages of performance appraisals:

If not done right, they can create a negative experience. Performance appraisals are very time consuming and can be overwhelming to managers with many employees. They are based on human assessment and are subject to rater errors and biases. Can be a waste of time if not done appropriately. They can create a very stressful environment for everyone involved.

Methods of Performance appraisal:

There are different methods available for performance appraisal followed by different organisation. The popular methods are as followings Graphic Rating Scale:

Graphic rating scales are one of the most common methods of performance appraisal. Graphic rating scales require an evaluator to indicate on a scale the degree to which an employee demonstrates a particular trait, behavior, or performance result. Rating forms are composed of a number of scales, each relating to a certain job or performance-related dimension, such as job knowledge, responsibility, or quality of work. Each scale is a continuum of scale points, or anchors, which range from high to low, from good to poor, from most to least effective, and so forth. Scales typically have from five to seven points, though they can have more or less. Graphic rating scales may or may not define their scale points. Acceptable rating scales should have the following characteristics: 1. Performance dimensions should be clearly defined. 2. Scales should be behaviourally based so that a rater is able to support all ratings with objective, observable evidence.

3. Abstract trait names such as "loyalty," "honesty," and "integrity" should be avoided unless they can be defined in terms of observable behaviours. 4. Points, or anchors, on each scaled dimension should be brief, unambiguous, and relevant to the dimension being rated. For example, in rating a person's flow of words, it is preferable to use anchors such as "fluent," "easy," "unimpeded," "hesitant," and "labored," rather than "excellent," "very good," "average," "below average," and "poor." BARS - Behaviorally Anchored Rating Scales:

Behaviorally anchored rating scales (BARS) are rating scales whose scale points are defined by statements of effective and ineffective behaviors. They are said to be behaviorally anchored in that the scales represent a continuum of descriptive statements of behaviors ranging from least to most effective. An evaluator must indicate which behavior on each scale best describes an employee's performance. BARS differ from other rating scales in that scale points are specifically defined behaviors. Also, BARS are constructed by the evaluators who will use them. There are four steps in the BARS construction process: 1. 2. 3. Listing of all the important dimensions of performance for a job or jobs Collection of critical incidents of effective and ineffective behaviour. Classification of effective and ineffective behaviors to appropriate

performance dimensions. 4. Assignment of numerical values to each behavior within each dimension (i.e.,

scaling of behavioral anchors) Sample of BARS INTERPERSONAL SKILL DESCRIPTION: Develops and maintains a friendly rapport with others; demonstrates sensitivity to their feelings; respects the dignity of others and responds with empathy to their own sense of self-worth. Ratings 1 and 2: Demonstrates the ability to get along well with subordinates, managers, and peers; strives to achieve work group objectives. Can express own ideas, thoughts, and feelings and considers the needs, ideas, and feelings of others. Ratings 3 and 4: Demonstrates the ability to apply factors of effective listening, on a one-toone basis, such as displaying interest, not interrupting when another is speaking, and withholding judgments. Consistently provides honest (both positive and negative) feedback and provides constructive criticism when appropriate.

Ratings 5 and 6: Demonstrates the ability to consistently consider and respond to the needs and ideas of others which encourages and stimulates further communication. Effectively listens in group or one-to-one situations involving distractions, stress, complex information, or when the person speaking is emotional/distraught. Creates/maintains a positive working environment that encourages expression of thoughts, ideas, and feelings. Management by objectives : It is a process of defining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization. The essence of MBO is participative goal setting, choosing course of actions and decision making. So through MBO, the measurement and the comparison of the employees actual performance with the standards set can be done and the performance of the employees can be evaluated. Ideally, when employees themselves have been involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfil their responsibilities. The basic principle behind Management by Objectives (MBO) is for employees to have a clear understanding of the roles and responsibilities expected of them. They can then understand how their activities relate to the achievement of the organization's goal. MBO also places importance on fulfilling the personal goals of each employee. The appraisal program that consist of six main steps: 1. Set the organizations goals. Establish organization-wide plan for next year and set goals. 2. Set departmental goals. Here department heads and their superiors jointly set goals for their departments. 3. Discuss and allocate department goals. Department heads discuss the department's goals with all subordinates in the department (often at a department-wide meeting) and ask them to develop their own individual goals; in other words, how can each employee contribute to the department's attaining its goals? 4. Define expected results (set individual goals). Here, department heads and their subordinates set short-term performance targets. 5. Performance review and measure the results. Department heads compare actual performance for each employee with expected results. 6. Provide feedback. Department heads hold periodic performance review meetings with subordinates to discuss and evaluate progress in achieving expected results.

360-degree appraisal :

It is also known as multi-rater feed back, multi-source feedback. It is the feedback that comes from all around an employee. "360" refers to the 360 degree in a circle, with an individual figuratively in the centre of the circle. Feedback is provided by: Subordinates Peers Supervisors Customers

It also includes a self-assessment and, in some cases, feedback from external sources such as customers and suppliers or other interested stakeholders.