Performance Appraisal

A.V.Raman
Do you want your employee to be like this? The worlds purportedly most
haunted painting.
What is performance appraisal?
Per f o rma n c e Appr a isa l is a sy s tem a tic e v alu a tio n of
present potential capabilities of personnel by their
superior or by a superiors superior or by a
professional from outside.
Per f o rma n c e Appr a isa l se ts-
1 Wo r k S t a n d a r d s
2 A s s e s s e s Wo r k P e r f o r m a n c e
3 P r o v i d e s Re g u l a r F o c u s e d Fe e d b a c k t o a n
Employee
Per f o rma n c e Appr a isa l is ba sis f o r pro m otio n or pay
RA I S E .
What is performance appraisal based
upon?
Per f o rma n c e Appr a isa l is organ i z ed in a cco rda n ce w it h
and aligned with the goals set by management and is the
management by objectives.
Per f o rma n c e Appr a isa l is a tw o w ay stre e t.
One it comprises of performance set up by managerial
authority
Tw o i t c o m p r i s e s o f p e r f o r m a n c e a c h i e v e d o r
i d e n t i fi c a t i o n o r i n t i m a t i o n o f g a p s a c h i e v e d b y a n
individual or group.
Per f o rma n c e Appr a isa l an d C om pe n sa tio n a re in se par a ble
twins.
Setting
performance
Evaluation goals

Establishing
performance
criteria

Actual Evaluation
of Employee
Performance

Post- Evaluation
interview with
employee
Evaluator for Conducting Performance Evaluation
Immediate supervisor,
Peer group,
Employees,
Committees,
Self and
Customers
Performance and Potential Appraisal
Per f o rma n c e Appr a isa l is a sy s tem a tic pro ce ss
I t i s n o t d o n e i n fi t s a n d s t a r t s b u t d o n e p e r i o d i c a l l y
in accordance with a plan
It is not a past oriented activity but looks into the
future.
Per f o rma n c e Appr a isa l is n o t j ob e va lu a tio n or
p e r t a i n s t o o n l y fi n d i n g f a u l t s .
Per f o rma n c e Appr a isa l ma y b e ei th e r th ro u gh a
formally systematized process or through informal
means.
Where does Performance Appraisal cast its spotlight
on?

Individual Task Outcomes

Behaviour
Expected Behavioural Traits related and aligned with the
job at hand not just any behavioral trait.

Performance Appraisal and Performance
Management run in tandem
Both performance appraisal and performance management function
by comparing what should be with what is. Managers use one
or more of three basesgoals, job dimensions, and competencies
to establish ahead of time what the employees' end results should
be.

Whichever you use, remember that employees need and expect to

know ahead of time on what basis their managers will appraise
them. Without knowing what goalpost you want to measure
employees Performance Appraisal is useless.
Employees appraised on whether they possess requisite level of
each skill required for their job routine are qualified to fill the
position.
Objectives of Performance Appraisal
Relate Individual goals to Organizational Goals
Enhance Objectivity in measuring performance
Evaluate Current Performance and predict future Performance in the
job
Foster increasing growth and competence in employees and
enhance further performance by indicating that the performance is
good
Strengthen the channels of communication between managers and
employees
Determine transfer termination and retention
Objectives of Performance Appraisal
Continued
Identify individual strengths and weaknesses of individual
employees through a systematic objective process and document
their performance carefully.
Serve as a basis for decision making about the employees
compensation and promotion.
Pick and spot the poor performers and warn them and tell them to
shape up or go out.
Provide concrete feedback to employees and identify potential for
further development.
Implications of Performance Appraisal
Compensation Decisions
Promotion Decisions
Consequences for Training and Development Programs
Employee Feedback- Remedial Action/Mentoring/Further
Observation/ Disciplining process/
Personnel Development
Team work development and improvement in how employees
and employers do things better
Ongoing Feedback Coaching and Developmental
Support
 Breaking PA up and deploying IT
Assign financial and nonfinancial goals to each teams
activities along the strategy map chain of activities leading
from the teams activities up to the companys overall
strategic goals and link them
Inform all employees of their goals and what they are
expected to deliver.

Use IT-supported tools like scorecard software and digital

dashboards to continuously display, monitor, and assess
each teams and employees performance which breakdown
performance to the minutest bits and mitigate uncertainty..
Take corrective action on a continuous basis.
Examples of the outcomes of PA
Employees are given titles such as
Rising Star the Best Newcomer
Honours Club Employee of the Year
Trailblazer Employee of half a year
Eureka-Best idea generation for the firm

What goes into making a PA system

effective?
Commitment of top management to performance appraisal system
Availability of clear written down job descriptions
Facilitating employee participation in setting participation goals and
evaluation criteria.
Method of performance appraisal used
The nature of paperwork involved is linked with the method and is
efficient and not self-serving.
Congruency with organizational objectives and work culture
Expertise of employees and employers in carrying out appraisal
effectively.
Making sure that the performance appraisal system is itself helping in
delivering designated organizational objectives and strategy.
Determining employees goals and performance
Standards The SMART framework
Managerial assessment:

Attaining numerical goals

Meeting quality and quantity criteria

Mastering competencies

Managers goals are SMART:

Specific

Measurable

Attainable

Relevant

Timely
PA Measurement An overview
The graphic rating scale method is the simplest and most
popular performance appraisal technique. First, a scale is
used to list a number of traits and a range of performance for
each. Then the employee is rated by identifying the score that
best describes his/her performance level for each trait.

Managers must decide which job performance aspects to

measure. Such aspects include generic dimensions, actual job
duties, or behaviorally recognizable competencies.
Field Review Method
In this method, the evaluation of an employee is done
by someone other than his own superiors.
Normally, evaluation is done by the HR people, who
scrutinize the records of those employees who are
being evaluated and conduct interviews with them and
their superiors.
This method facilitates inter-person comparison of the
managerial personnel in different places.
Confidential Report (CR)
CR is a kind of evaluation practised predominantly in
government and public sector organizations.
The evaluation report is prepared by the immediate
superiors, usually on the basis of the continuous observation
of employees over a period of time
The CR follows a predetermined format for gathering data
relating to employees skills, knowledge, initiative, attitude,
integrity, scope for improvement, aptitude, and area of
concern
Graphical Rating Scale
Graphical ratings can be designed to measure either outcomes or behaviours
and are a handy and simple tool to ascertain performance..
Common dimensions of performance include quality of output, quantity of
output, cooperation with others, and skill development. For each performance
dimension, the rater is asked to place the employee in a specific rating
category. Most scales have between three and seven rating categories,
each represented by a number. For example, a scale with three categories
may include a rating of 1 for unsatisfactory performance, 2 for average
performance, and 3 for outstanding performance.
Methods of PA 1) Graphical Rating Scale
Please circle the number that you feel best describes this
workers performance for each work dimension.

Quality of work performed 1 2

3

Quantity of Work performed 1 2

3

Timeliness 1 2
3

Co-Operation with Others 1 2

3
Narrative Rating.
Organizations that use narrative ratings ask

supervisors or other raters to simply provide a written description of

performance.

You have experienced such a rating if a professor has written a note

evaluating a paper you have turned in. A benefit of narrative ratings is that

they can be tailored to describe specific, and perhaps unique, aspects of

performance.

Such comments can also be very helpful for improving future performance but
suffer from individual bias, the raters may write it in a hurry and there is no
way to compare high and low employees in order to ascertain compensation.
PA Measurement is a mix of group and
individual assessments.
Ranking Method-Ranking of an employee in a work group is done
against another employee and the relative position of each
employee is expressed in his relative rank.
The Paired Comparison Method on the other hand entails ranking
employees by making a chart of all possible pairs of employees for
each trait. The manager then indicates which one is the better
employee of the pair.
Critical Incident Analysis
Critical Incident Method A supervisor keeps a record of
uncommonly good and/or undesirable examples of an employees
work-related behavior. The supervisor then reviews the record with
the employee at predetermined times.
PA Measurement
Forced Rankings

A rater is required to rank all employees. For example, an office manager might be
asked to rank the offices five secretaries in order from highest performer to lowest
performer. The forced ranking technique eliminates central tendency error and
provides clear guidance for organizations that want to give promotions and pay
raises to top performers.

Least Most

A does not anticipate difficulties A

Quickly comprehends instructions B

_______________________________________________________________________

Can be a leader A

Wastes time on unproductive things A

Management by Objectives devised by
Peter Drucker
Management by Objectives (MBO) The manager sets out specific measurable
goals with each employee and then periodically discusses the employees
progress toward them. The process consists of six steps:

setting organizational goals

setting departmental goals

Discuss and clarify

define expected outcomes

conduct performance reviews

provide feedback

Having a conversation is focused on stretched goals and career interests there are
no ratings.
Behaviourally Anchored Rating Scale

BARS method first delineates the main performance

parameters of the job, for example, interpersonal
relationships. Then the tool utilizes narrative information,
such as from a critical incidents file, and assigns quantified
ranks to each expected behavior. In this system, there is a
specific narrative outlining what exemplifies a good and
poor behavior for each category.
The main advantage of this type of system is that it focuses
on the desired behaviors that are important to complete a
task or perform a specific job. This method combines a
graphic rating scale with a critical incidents system and gives
a good measurement of the activity while not at the goals..
Other forms of Assessment

Assessment Centres are where individuals from several departments

are brought together to spend two or three days working together
working on group assignments mirroring the kind of assignments
they would do if they were promoted at an assessment centre.
Observers measure rank the performance of each participant in
order of merit. All candidates get a chance to display their talents
and since evaluators know precisely what they are examining and
the requirements of the post the evaluation is quite fair to all
candidates. This is used for primarily for promoting candidates.
Field Review Method where a skilled HR professional goes to the
field and assists employees with the ratings of their subordinates.
The HR specialist requests specific information about employee
performance. Based on the report the specialist prepares a report
which is sent back to the supervisor for scrutiny and any
amendments, discussion with the employee who is being rated. The
ratings are done in standardized forms.
The Performance Appraisal Interview
Useful interviews begin before the interview. Beforehand, review the persons job description, compare
performance to the standards, and review the previous appraisals. Give the employee at least a weeks
notice to review his or her work. Set a time for the interview. Interviews with lower level personnel like
clerical workers should take less than an hour. Interviews with management employees often take 1 or 2
hours. Conduct the interview privately with no interruptions.

Do not judge or thrust your opinion. Allow the employee to speak what she or he feels listen but do not
react.

Recognize that defensive behavior is normal. Never attack or belittle a persons defenses; they are
legitimate to him or her. Defer action as appropriate and recognize your own limitations. Break any bad
news gently.

When required, criticize in a private and constructive manner that lets the person maintain his/her
dignity and sense of worth.

Written warnings should identify the standards by which the employee is judged, make it clear that the
employee was aware and informed of the standard. Point out the violation of the standard, and show that
the employee had an opportunity to correct the behavior. You may place this in his or her permanent
personnel file. If circumstances warrant, you may remove the warning after a specified amount of time, say
90 days or longer.

Be realistic and honest when giving an appraisal. It is important that a manager be blunt when a
subordinate is underperforming. Focus on specifics and allow opportunities to improve.
Organizational Development Process
Flaws that can creep into PA measurement
If standards are unclear, ambiguous traits and degrees of merit can result in
an unfair appraisal.
The influence of a raters general impression on ratings of specific qualities is
known as the halo effect.
Central tendency occurs when supervisors stick to the middle of the rating
scales, thus rating everyone average like an examiner trying to push people
up and not taking difficult decision.
Leniency or strictness occurs if supervisors have a tendency to rate everyone
either high or low. Effects involve letting what the employee has done recently
blind the manager to the employees performance over the entire year. A poor
first impression may disproportionality influence the raters behavior.
Similarly a poor perception of one trait of an employee may spill over to all
attributes that seek to be evaluated. Bias is a tendency to allow individual
differences such as age, race, and sex affect employee appraisal ratings.
The Challenges in Performance Management

Creating a culture of excellence that motivates employees at

all levels. Not creating a punishment centred apparatus that
invokes fear
Match organisational objectives with individual aspirations.
Equipping people with requisite skills to discharge their duties
well.
Providing Clear growth paths for talented employees.
Provide new challenges to rejuvenate flattening corners.
Empower employees to take decisions without fear of failing.
Encourage teamwork and team spirit and open
communication.