Module -8

Performance Appraisal
Describe the Performance Appraisal
Process
Basics of Performance Appraisal
• The performance appraisal process
1. Sets work standards
2. Assesses performance
3. Provides feedback to the employee
Why Appraise Performance?
Five reasons:
1. Used for pay, promotion, and retention decisions
2. Links performance management to company goals
3. The manager can correct deficiencies and reinforce strengths
4. With appraisals employees can review career plans
5. Training needs are identified
Defining the Employee’s Goals and
Performance Standards
1. Goals
2. Job dimensions or Traits
3. Behaviors or Competencies
performance appraisal potential problems
• Bias: Bias can be a significant problem in performance appraisal. It can occur when the appraiser is
influenced by factors such as personal relationships, gender, race, or other demographic factors. This
can lead to unfair assessments and a lack of objective feedback.
• Lack of clarity: Another potential problem with performance appraisal is the lack of clarity in the
appraisal criteria. If the criteria are not well-defined and communicated to the employees, it can
lead to confusion and inconsistent feedback.
• Overemphasis on recent performance: Appraisers may tend to focus too much on recent
performance rather than considering the employee's overall performance. This can lead to unfair
evaluations and can overlook the employee's long-term contributions to the organization.
• Inappropriate comparison: Appraisers may compare employees inappropriately, such as comparing
employees from different departments or with different roles. This can lead to unfair evaluations
and can overlook the employee's unique contributions.
• Lack of training for appraisers: If appraisers are not trained on how to conduct a fair and objective
appraisal, it can lead to inaccurate evaluations and can damage employee morale and motivation.
Who Should Do the Appraising?
1. Peer Appraisals
• Crowd appraisals
• Virtual games
2. Rating Committees
3. Self Ratings
4. Appraisal by Subordinates
5. 360-Degree Feedback
Discuss the Pros and Cons of at Least Eight
Traditional Performance Appraisal Methods
Traditional Tools for Appraising Performance
(1 of 2)

1. Graphic Rating Scale

2. Alternation Ranking Method
3. Paired Comparison Method
4. Forced Distribution Method
5. Critical Incident Method
Traditional Tools for Appraising Performance
(2 of 2)

6. Narrative Forms
7. Behaviorally Anchored Rating Scale (BARS)
8. Management by Objectives (MBO)
Appraisal in Practice
• Using Forms, Installed Software, or Cloud-Based Systems
• Computerization expedites appraisals
Electronic Performance Monitoring
• Electronic performance monitoring (EPM) systems
• use computer network technology to allow managers to
monitor their employees’ computers.
Additional Techniques
• Conversation days
• Using multiple methods
Give Examples of How to Deal with Potential
Appraisal Error Problems
Dealing with Rater Error Appraisal Problems
• Potential rating problems
• Unclear standards
• Halo Effect
• Central Tendency
• Leniency or Strictness
• Recency Effects
Diversity Counts the Problem of Bias

Bias

The tendency for individual differences to affect judgments

The Need for Fairness (1 of 4)

Checklist of Best Practices for Administering Fair Performance Appraisals

• Base the performance review on duties and standards from a job analysis.
• Try to base the performance review on observable job behaviors or objective
performance data.
• Make it clear ahead of time what your performance expectations are.
• Use a standardized performance review procedure for all employees.
The Need for Fairness (2 of 4)

• Make sure whoever conducts the reviews has frequent opportunities to observe the
employee’s job performance.
• Either use multiple raters or have the rater’s supervisor evaluate the appraisal results.
• Include an appeals mechanism.
• Document the appraisal review process and results.
The Need for Fairness (3 of 4)

• Discuss the appraisal results with the employee.

• Let the employees know ahead of time how you’re going to
conduct the reviews.
• Let the employee provide input regarding your assessment of
him or her.
• Indicate what the employee needs to do to improve.
The Need for Fairness (4 of 4)

• Train the supervisors who will be doing the appraisals. Make sure they understand the
procedure to use, how problems (like leniency and strictness) arise, and how to deal
with them.
Know Your Employment Law

Appraising Performance

Let’s take a look…

List Steps to Take in the Appraisal Interview
Managing the Appraisal Interview
• Appraisal Interview – an interview in which the supervisor and
subordinate review the appraisal and make plans to remedy
deficiencies and reinforce strengths.
 How to Conduct the Appraisal
Interview
• Preparation
• Planning
• Steps to Take
• Measure Success
• Date to Complete
• Coaching
 Guidelines to Conducting the
Appraisal Interview
• Objective data
• Don’t get personal
• Encouragement
• Agreement
 How to Handle a Defensive
Subordinate
• Recognize behavior
• Never attack defenses
• Postpone action
• Recognize limitations
How to Criticize a Subordinate
• Maintain his or her dignity
• Discuss in private
• Provide constructive criticism
• Provide examples
• Give feedback periodically
• Be objective and free of personal bias
• Get agreement on a plan
How to Handle a Formal Written Warning
• Weak performance may require a formal written warning.
• Serve two purposes:
• to shake your employee out of his or her bad habits, and
• to help you defend your rating to your own boss and (if
needed) to the courts.
Explain Key Points in How to Use the Appraisal
Interview to Boost Employee Engagement
Employee Engagement Guide for Managers
• Use the Appraisal Interview to Build Engagement
• Show how efforts contribute to the “big picture”
• Emphasize the meaningfulness
• Be candid and objective
• Share what he or she needs to do a good job
• Don’t unnecessarily emphasize the negatives
• Listen to their ideas
• Discuss in the context of his or her career
• Ensure interviewee views the appraisal as fair
Explain How You Would Take a Performance
Management Approach to Appraisal
Performance Management
• Performance appraisal is fine in theory, but in practice, appraisals don’t always go
smoothly.
• Performance Management
• the continuous process of identifying, measuring, and developing the performance
of individuals and teams and aligning their performance with the organization’s
goals.
Total Quality Management and Performance
Appraisal
• Maximizing customer satisfaction through continuous improvements
• Cease Dependence
• Continuous Improvement
• Extensive Training
• Drive out Fear
• Remove Barriers
• Self Improvement
What is Performance Management?
• Performance management is the continuous process of identifying, measuring, and
developing the performance of individuals and teams and aligning their performance
with the organization’s goals.
Trends Shaping HR: Digital and Social Media

Technology to Support Performance Management

Let’s take a look…

The Manager’s Role in Performance
Management
• Having the right philosophy
• Having the right on-the-job behaviors
Performance appraisal
• Mondy” performance appraisal is a system of review and evaluation
of an individual’s performance”
• Gomej-Mejia “performance appraisal involves the identification,
measurement and management of human performance in
organizations”
Features of performance appraisal
• Organized process
• Evaluating process
• Periodic process
• Futuristic
• Identifies employee potentialities
• Develops employees
• Formal and informal process
Need for performance appraisal
• Help to recognize personality differences
• It is needed to motivate the employees
• It helps to identify the strengths and weakness
Objectives of performance appraisal
• Providing feedback
• Facilitating promotion and downsizing decisions
• Motivating superior performance
• Setting and measuring goals
• Determining compensation
• Counseling poor performers
• Encouraging coaching and mentoring
• Supporting manpower planning
• Determining training and development needs
• Validating hiring decisions
• Providing legal defensibility
• Improve overall organizational performance
Process of performance appraisal
• Establish performance standards with employees
• Mutually set measurable goals
• Measure actual performance
• Compare actual performance with standards
• Discuss the appraisal with the employee
• If necessary, take corrective actions
Pros of performance appraisal

• Performance enhancement
• Compensation adjustment
• Eliminating informational inaccuracies
• Taking placement decisions
• Career planning and development
• Identifying deficiencies In staffing process
• Identifying training and development needs
• Identifying the factors effecting performance
Cons of performance appraisal
• Rating errors
• Poor appraisal forms
• Lack of rater awareness
• Ineffective organizational policies and practices
• Inflationary pressures
Methods of Performance Appraisal

Past oriented methods of appraisal

• Straight ranking method
 Different methods of Performance
Appraisal –
• There are several methods and techniques used for evaluating / assessing
employees performance. These are classified as

A] Traditional methods B] Modern methods

1. Confidential Report 1. Assessment centre
2. Free from or essay method 2. Human Resource
3. Straight ranking Accounting
4. Paired comparisons 3. MBO
5. Forced Distribution 4. 360 Degree appraisal
6. Graphic rating scale
7. Checklist method
8. Critical incidents
9. Group appraisal
Ranking employees by paired comparison Method

For the Trait “Quality of For the Trait “Creativity”

work”

Person rated Person rated

As compared to A B C As compared to A B C

A - + +
A + - + -
- - -

- B + - +
B - -+ - - -

+ +- - -
C + + C + + -
 Graphic or Linear Rating Scales
Attitude
0 5 10 15 20

No Careless: Interested Enthusiastic Enthusiastic

interest In-different in work: about job & opinions &
In work: Instructions Accepts fellow- advice
consistent opinions & workers sought by
complaine advice of others
r others
Decisivenes
s 0 5 10 15 20

Slow to Take Takes Take decisions Take

take decisions decisions in decisions
decisions after careful promptly consultation without
consideration with others consultation
whose views
he values
 Forced choice
method
Criteria Rating

1.Regularity on the job Most Least

• Always regular
• Inform in advance for delay
• Never regular
• Remain absent
• Neither regular nor irregular
 Forced distribution method

No.
of
10% 20% 40% 20% 10%
employee
s poor Below average good Excellent
average

Force distribution curve

 Specimen of Staff Assessment Form [Descriptive Essay
Type]
Staff Appraisal
Name . . . . . . . Job Title . . . . . . .
Department . . . . . . . . . . . . Date of Review . . . . . . .
Age . . . . . .. . Years in present job
Section I Appraisal Of Performance
Note to Appraiser
1. Appraisal must cover the period of the preceding 12 months
2. Consideration to every function & responsibility of the job
3. An objective factual assessment of an employee’s improvement or
deterioration

Section II Promotability & Potential

Promotability
1. Promotion now
2. Within 2 years
3. Within 5 years
4. Unlikely to qualify for promotion
Section III Career Development
Section IV Notes on Interview with employee

Section V Comments on & Endorsement by Reviewing Authority

 Critical Incident method

Ex: A fire, sudden breakdown, accident

Workers Reaction scale

A Informed the supervisor immediately 5

B Become anxious on loss of output 4
C Tried to repair the machine 3
D Complained for poor maintenance 2
E Was happy to forced test 1
 Field review method
Performance subordinate peers superior
customer
Dimension

Leadership

Communication

Interpersonal skills

Decision making

Technical skills

Motivation
Group appraisal method
 MBO Process

Set organizational goals

Defining performance target
Performance review
feedback
 Behavioral Anchored Rating Scales
Performance Point Behavior
s
Extremely 7 Can expect trainee to make valuable
good suggestions for increased sales and to have
positive relationships with customers all over
the country.

Good 6 Can expect to initiate creative ideas for

improved sales.
Above 5 Can expect to keep in touch with the customers
average throughout the year.
Average 4 Can manage, with difficulty, to deliver the
goods in time.
Below average 3 Can expect to unload the trucks when asked by
the supervisor.
Poor 2 Can expect to inform only a part of the
customers.
Extremely 1 Can expect to take extended coffee breaks &
360 degree performance appraisal
• "Reinventing Performance Management" is an article published in the Harvard Business Review in 2015 by Markus
Buckingham and Ashley Goodall. The article argues that traditional performance management systems, which often
involve annual performance appraisals and ratings, are fundamentally flawed and proposes a new approach to evaluating
employee performance.
• The authors suggest that traditional performance management systems are often bureaucratic, time-consuming, and
demotivating for employees. Additionally, the ratings are not always reliable indicators of employee performance, as they
are often subject to bias and influenced by factors outside of the employee's control.
• To address these flaws, the authors propose a new approach based on three core principles. The first principle is to focus
on the strengths of employees, rather than their weaknesses. The authors suggest that employees are more likely to be
engaged and motivated when they are working to develop their strengths, rather than constantly trying to improve their
weaknesses.
• The second principle is to encourage regular check-ins between managers and employees. These check-ins should be
informal, two-way conversations that focus on feedback and development. The authors suggest that check-ins should
occur at least once per quarter and should be designed to facilitate ongoing feedback.
• The third principle is to provide ongoing feedback that is specific, timely, and focused on development. The authors
suggest that ongoing feedback is more useful than annual ratings, as it allows employees to make adjustments to their
performance in real-time.
• The authors provide examples of companies that have successfully implemented this new approach, such as Deloitte,
which implemented a system called "Performance Snapshot" that involves regular check-ins and ongoing feedback. The
system has been well-received by employees and has resulted in improved engagement and performance.
• Overall, the article argues that by rethinking traditional performance management systems and focusing on strengths,
regular check-ins, and ongoing feedback, managers can create a more engaged, motivated, and high-performing
workforce.
Shift from Annual Performance Appraisals to Real Time Feedback

• The authors propose a new approach to performance management based on three core principles:
• Focus on the strengths of employees:
• Encourage regular check-ins:
• Provide ongoing feedback
• The authors provide several examples of companies that have successfully implemented this new approach
to performance management. For example, Deloitte implemented a system called "Performance Snapshot,"
which involves regular check-ins and ongoing feedback. The system has been well-received by employees
and has resulted in improved engagement and performance.
• Overall, the article provides a compelling argument for rethinking traditional performance management
systems. By focusing on strengths, encouraging regular check-ins, and providing ongoing feedback,
managers can create a more engaged, motivated, and high-performing workforce.