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PERFORMANCE APPRAISAL
It is the process of evaluating the performance of employees, according to Newstrom and Davis, (2012).
It is also the sharing of information with them and searching for ways to improve their performance.

Performance appraisal is a system of review and evaluation of an individual or team’s job performance.
Performance management is a process that significantly affects organizational success by having managers and
employees work together to set expectations, review results, and reward performance.

PURPOSE OF P.A.
Developmental
 Provide performance feedback
 Identity individual strengths/weaknesses
 Recognize individual performance
 Assist in goal identification
 Evaluate goal achievement
 Identity individual training needs
 Determine organizational training needs
 Reinforce authority structure
 Allow employees to discuss concerns
 Improve communication
 Provide a forum for leaders to help
Administrative
 Document personnel decisions
 Determine promotion candidates
 Determine transfers and assignments
 Identity poor performance
 Decide retention or termination
 Decide on layoffs
 Validate selection criteria
 Meet legal requirements
 Evaluate training programs/progress
 Personnel planning
 Make reward/compensation decisions
Strategic
 Link between employee activity and Organizational goals
 Define the KASHs necessary for implementing the strategy
 Develop measurement and feedback system
 Communicate corporate culture and values.

REASONS FOR EMPLOYEE APPRAISAL

1. To allocate resources in a dynamic environment
2. To motivate employees
3. To give employees feedback about their work
4. To maintain fair relationships within groups
5. To coach and develop employees and
6. To comply with regulations

WHAT TO EVALUATE
What aspect of a person’s performance should an organization evaluate? In practice, the most common sets of
appraisal criteria are traits, behaviors, and task outcomes.
a. Traits—Many employees in organizations are evaluated on the basis of certain traits such as attitude,
appearance, initiative, etc.
b. Behaviors—When an individual’s task outcome is difficult to determine, it is common to evaluate the
person’s task-related behavior.
dsPascua “Practice without theory is blind.”
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c. Task Outcomes—If ends are considered more important than means, task outcomes become the most
appropriate factor to evaluate.
d. Improvement Potential—Some attention must be given to the future and the behaviors and outcomes
that are needed to not only develop the employee, but also to achieve the firm’s goals. This involves an
assessment of the employee’s potential.

TYPES OF PERFORMANCE ISSUES

One of the most difficult parts of managing others isn’t when they are doing a great job—it is when they
aren’t doing a good job. The following are some examples of performance issues and how to handle them.
1. Constantly late or leaves early. While we know that flexible schedules can provide a work-life balance,
managing this flexible schedule is a key. Some employees may take advantage and, instead of working
at home, perform nonwork-related tasks instead.
2. Too much time spent doing personal things at work. Most companies have a policy about using a
computer or phone for personal use. For most companies, some personal use is fine, but it can become
a problem if someone doesn’t know where to draw the line.
3. Inability to handle proprietary information. Many companies handle important client and patient
information. The ability to keep this information private for the protection of others is important to the
success of the company.
4. Family issues. Child-care issues, divorce, or other family challenges can cause absenteeism, but also
poor work quality. Absenteeism is defined as a habitual pattern of not being at work.
5. Drug and alcohol abuse. (We are talking about not only illegal drugs but prescription drug abuse as
well.) In fact, some employees have taken a prescription pain reliever, tranquilizer, or sedative for
nonmedical purposes at least once. Illegal drug abuse can cause obvious problems, such as tardiness,
absenteeism, and nonperformance, but it can also result in accidents or other more serious issues.
6. Nonperforming. Sometimes employees are just not performing at their peak. Some causes may include
family or personal issues, but oftentimes it can mean motivational issues or lack of tools and/or ability to
do their current job.
7. Conflicts with management or other employees. While it is normal to have the occasional conflict at
work, some employees seem to have more than the average owing to personality issues. Of course, this
affects an organization’s productivity.
8. Theft. The numbers surrounding employee theft are staggering.
9. Ethical breaches. The most commonly reported ethical breaches by employees include lying,
withholding information, abusive behavior, and misreporting time or hours worked, according to a
National Business Ethics study.
10. Harassment. Engagement of sexual harassment, bullying, or other types of harassment would be
considered an issue to be dealt with immediately and, depending on the severity, may result in immediate
termination.
11. Employee conduct outside the workplace. Speaking poorly of the organization on blogs or Facebook
is an example of conduct occurring outside the workplace that could violate company policy. Violating
specific company policies outside work could also result in termination. For example, in 2010, thirteen
Virgin Atlantic employees were fired after posting criticisms about customers and joking about the lack of
safety on Virgin airplanes in a public Facebook group.

OPTIONS FOR HANDLING PERFORMANCE ISSUES

Our last phase of dealing with employee problems would be a disciplinary intervention. Often this is called
the progressive discipline process. It refers to a series of steps taking corrective action on nonperformance
issues. The progressive discipline process is useful if the offense is not serious and does not demand immediate
dismissal, such as employee theft. The progressive discipline process should be documented and applied to all
employees committing the same offenses. The steps in progressive discipline normally are the following:
1. First offense: Unofficial verbal warning. Counseling and restatement of expectations.
2. Second offense: Official written warning, documented in employee file.
3. Third offense: Second official warning. Improvement plan may be developed. Documented in employee file.
4. Fourth offense: Possible suspension or other punishment, documented in employee file.
5. Fifth offense: Termination and/or alternative dispute resolution.

dsPascua “Practice without theory is blind.”

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STRATEGIES FOR IMPROVING PERFORMANCE
If performance appraisal process indicates the poor performance of the employees than the following
strategies can be used to improve the performance of the employees and even for good performance these
strategies can be used to keep on the trend. These strategies are as under:
a. Positive Reinforcement:
Applying a valued consequence that increases the likelihood that the person will repeat the behavior that
led to it is termed as positive reinforcement. Examples of positive reinforcement include compliments,
letters of recommendations, favorable performance appraisal, and pay raises. Equally important, Jobs can
be positively reinforcing.
b. Punishment:
Punishment means administering an aversive consequence. Examples include criticizing or shouting at an
employee, assigning an unappealing task, and sending a worker home without pay. Punishment strategy
can be used to improve the performance of employees.
c. Self-Management:
Many companies empower their employees to take responsibility for the day to day functions in their areas.
Accordingly, these employees may now work without direct supervision and take on the administrative
responsibilities that were once performed by their supervisor.
d. Employee Assistance Programs (EAPs):
Specific programs designed to help employees with personal problems. No matter what kind of organization
one works in, one thing is certain. Whether that problem is job stress, legal, marital, financial, or health
related, one commonality exists: if an employee experiences a personal problem, sooner or later it will
manifest itself at the work place in terms of lowered productivity, increased absenteeism, or turnover. To
help employees deal with these personal problems, more and more companies are implementing employee
assistance programs.

RESPONSIBILITY FOR APPRAISAL

In most organizations, the human resource department is responsible for coordinating the design and
implementation of performance appraisal programs. However, it is essential that line managers play a key role
from beginning to end.
a. Immediate Supervisor—An employee’s immediate supervisor traditionally has been the most common
choice for evaluating performance.
b. Subordinates—Some managers have concluded that evaluation of managers by subordinates is
feasible.
c. Peers—Peer appraisal has long had proponents who believed that such an approach is reliable if the
work group is stable over a reasonably long period of time and performs tasks that require considerable
interaction.
d. Self-Appraisal—If individuals understand the objectives they are expected to achieve and the standards
by which they are to be evaluated, they are—to a great extent—in the best position to appraise their own
performance.
e. Customer Appraisal—The behavior of customers determines the degree of success a firm achieves.
Therefore, some organizations believe it is important to obtain performance input from this critical source.

PERFORMANCE APPRAISAL FAILURES

Sometimes performance appraisal process does not satisfy the purpose for which it is conducted, that means
it is faced with some failures and there are certain reasons, these reasons are as under:
1. Manager lacks information
2. Lack of appraisal skills
3. Manager not taking appraisal seriously
4. Manager not prepared
5. Employee not receiving ongoing feedback
6. Manager not being honest or sincere
7. Ineffective discussion of employee development

dsPascua “Practice without theory is blind.”

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8. Unclear language
9. Insufficient reward for performance

PERFORMANCE APPRAISAL FORM

The tool / document to bind the agreement and to measure actual performance.

dsPascua “Practice without theory is blind.”

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dsPascua “Practice without theory is blind.”

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PERFORMANCE APPRAISAL SKILLS

What the Appraisal Discussion should not include
1. Performance issues not covered by the present period.
2. Disciplinary cases and decisions.
3. Salary adjustments and bonuses (set another meeting for this)
4. Other people’s performance issues
5. Airing of grievances and other irrelevant issues (set another meeting for this)

COMMON RATING ERRORS: THE PITFALLS IN PA

dsPascua “Practice without theory is blind.”

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dsPascua “Practice without theory is blind.”

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HOW TO AVOID THE PITFALLS IN PA

1. Am I judging/assessing an employee based upon how I feel about them?
2. When reviewing my employees, does one particular trait or characteristic stand out for each person,
e.g., race, age, hair color, weight, etc.? DO my selections all look similar to me, have similar
backgrounds to mine, remind of me when I first started here?
3. Are my assessments or evaluations running predominantly low or high across the board?
4. Am I basing my appraisal information on conclusions drawn from my first impressions, opinions and/or
Inferences?
5. Do I evaluate each employee with the same degree of stringency and with consistency?
6. Am I giving undue weight to an occurrence which took place recently?

dsPascua “Practice without theory is blind.”