introduction to performance appraisal meaning and definition ,features,objectives,benefits,essentials ,limitations of performance appraisal

1. HUMAN RESOURCE MANAGEMENT
PRESENTED BY
M.BHARATHI

2.  Introduction to Performance appraisal
 Meaning and definition of Performance appraisal
 Features of Performance appraisal
 Objectives of Performance appraisal
 Benefits and uses of Performance appraisal
 Limitations of Performance appraisal
 Process and methods of Performance appraisal
 Essentials of an effective Performance appraisal system
 conclusion

3.  Once an employee is selected and trained for a job then
management would like to se how he performs his work.
 it helps in evaluating the performance of employees and in
assessing the hiring and training methods followed in and
organization.
 The employees are recruited with some objectives in mind, whether
these have been achieved or not has to be regularly evaluated. Merit
rating is a 'process of evaluation an employee's performance of a
job in terms of its requirements' The rating of a man by another man
is as old as mankind, but formal merit rating systems are of
relatively recent origin.
 Merit rating is also termed as Performance Appraisal or Employee
Appraisal.

4.  Performance appraisal is the process of measuring
quantitatively and qualitatively and employee's past or
present performance against the background of his
expected role performance, the background of his work
environment, and about his future potential for an
organization.
 The evaluation of the performance and personality of
each employee is done by his immediate superior or
some other person trained in the techniques of merit
rating. Various rating techniques are employed for
comparing individual employees in a group in terms of
personal qualities or deficiencies and the requirements
of their respective jobs.

5.  According to Edward Flippo "Performance appraisal is the systematic, periodic and an impartial
rating of an employee’s excellence in matters pertaining to his present job and his potential for a
better job."
 According to Dale Yoder “performance appraisal includes all formal procedures used to evaluate
personalities and contributions and potentials of group members in a working organization. Is a
continuous process to secure information necessary for making correct and objective decisions on
employees?"
 According to Randall S. Schuler "Performance appraisal is a formal, structured system of
measuring and evaluating an employee's job related behavior and outcomes to discover how and
why the employees is presently performing on the job and how the employee can perform more
effectively in the future so that the employee, organization and society will benefit.
 According to Dale S. Beach "Performance appraisal is the systematic evaluation of the individual
with respect to his or her performance on the job and his or her potential of development.
 According to C. Heigal "Performance appraisal is the process of evaluating the performance and
qualifications of the employees in terms of the requirements of the job for which he is employed
for purposes of administration including placement, selection for promotion, providing financial
rewards and other actions which require differential treatment among the members of a group as
distinguished from actions affecting all members equally.

6. The main characteristics of performance appraisal are as follows:
 Performance appraisal is a systematic process consisting of a number of steps
to be followed for evaluating an employee's strengths and weaknesses.
 It is a systematic and objective description of an employee's strengths and
weaknesses.
 The appraisal is an ongoing and continuous process where the evaluations are
arranged periodically according to a definite plan. It is not a one shot deal.
 The performance appraisal seeks to secure information necessary for making
objective and correct decisions on employees.
 Performance appraisal may be formal or informal. The formal system is fairer
and objective since it is carried out in a systematic manner using printed
appraisal forms.

7. Performance appraisal can be carried out with various
objectives in mind and these objectives can be
classified under the following four heads:
(a) Work- Related Objectives
 To assess the work of employees in relation to job
requirements
 To improve efficiency
 To help management in fixing employees according to
their capacity, interest, aptitude and qualifications
 To carry out job evaluation

8. (b) Career Development Objectives
 To assess the strong and weak points in the
working of the employees and finding
remedies for weak points through training
 To determine career potential
 To plan promotions, transfers, lay offs etc. of
the employees
 To plan career goals

9. (c) Communication
 To provide feedback to employees so that they come to
know where they stand and can improve their job
performance
 To clearly establish goals i.e. what is expected of the
employee in terms of performance and future work
assignments
 To provide coaching, counseling, career planning and
motivation to employees
 To develop positive superior-subordinate relations and
thereby reduce grievances.


10. (d) Organizational Objectives
 To serve as a basis of promotion or demotion
 To serve as a basis for wage and salary
administration and considering pay increases and
increments
 To serve as a basis for planning suitable training
and development programmes
 To serve as a basis for transfer or termination in
case of reduction in staff strength.

11.  An effective system of Performance appraisal helps the supervisor to
evaluate the performance of his employees systematically and periodically,
it helps in the placement of the employees on the jobs for which they are
best suited.
 The results of performance appraisal may be used by the supervisor in
constructively guiding the employees in the efficient performance of their
jobs.
 Performance appraisal provides the management an objective basis for
discussing salary increases and special increments of the staff.
 Performance appraisal can be used for transfer and promotion of
employees, if the performance of an employee is better than others, he can
be recommended for promotion, but if he is not doing well, he may be
transferred to some other job for which he is best
 Performance appraisal facilitates human resource planning, career
planningabnd succession planning

12. Hallo error:
 The hallo error or effect is a tendency to evaluate a person
on the basis of one trait of characteristic. The appraiser
judges a person on the strength of a specific trait and does
not base his inference on his overall various traits
depending upon the rater's overall judgment of the person.
If the rater is friendly to a worker, he may consistently rate
him outstanding; on the other hand if a person is unfriendly
then he may be rated below average even if his
performance on the job is very good. Hallo effect may be
controlled if the rater is given a list of characteristics and is
asked to evaluate persons characteristic-wise.

13. Central Tendency:
 It is the most commonly found error in merit rating. This
error arises when the rater is not sure about the
performance of a person, may not be well conversant with
his work or may have less time at his disposal. He will like
to play safe in evaluating persons and will rate them as
average. Neither he will rate them having poor performance
not he will rate them outstanding. The rater follows a via
media and gives mediocre reports to the subordinates about
whom he does not want to commit. This type of tendency
on the part of evaluators distorts the evaluation, making
them most useless for promotion, salary or counseling
purposes.

14. Leniency or strictness:
 The evaluators have their own value system which acts as a
standard for evaluation. Some evaluators may be lenient and will
give high rating to everyone. On the other hand, an evaluator may
be strict and will give low ratings to all persons. The tendency of
giving high rating is known as positive leniency error and the
tendency of giving low ratings is called negative leniency error.
Both the trends can arise from varying standards of performance
observed by supervisors and from different interpretations of what
they observe in employee performance. The raters should be trained
for evaluation purpose and be told of what is expected from ratings.

15. Similarity Error:
 This error arises from the mental make up of an evaluator. The evaluator uses his
own trait as a basis for assessing the employees. If the rater is aggressive then he
will try to find this trait in subordinates. Those who have this trait will be rated
high and those who do not have it will be rated low. This error can be washed out if
the same rater appraises all employees in the organization.
Miscellaneous Biases:
 Bias may exist on the ground of sex, race, religion, position, etc. The persons on
higher positions may be given higher ratings. A rater may also give high ratings to
his group because persons in other groups may not ger higher pay rises than his
subordinates. A rater may have preference for persons belonging to his own sex,
race, religion, etc

16. Faulty Assumptions:
 There are faulty assumptions about the performance appraisal system both
by the superiors and subordinates. These assumptions work against the
effectiveness of this system. The assumptions are:
 The assumption that superiors will make impartial assumption of
subordinates is not practical. Both show tendency to avoid appraisal
processes.
 It is assumed that appraisal system once implemented properly will be
utilized in every project. This is too much of expectation from the system.
 Superiors sometimes feel that their personal judgment of the subordinates
is better than that of appraisal system.
 The thinking that employees want to know about their appraisal is not
correct. In fact employees try to avoid appraisal system.

17. Psychological Blocks:
 The utility of appraisal system will depend upon the
skills of the users. This system will depend upon the
psychological characteristic of managers, no matter
what method is being used. There are many
psychological blocks working against this system.
Managers consider appraisal as an extra burden, they
try to treat subordinates' failure as their own, dislike to
communicate unfavorable reports to subordinates.
Because of these psychological blocks managers do not
tend to become impartial or objective in evaluating the
subordinates.

18. PERFORMANCE APPRAISAL PROCESS
 Establishing Standards
 Communicating Standards to Employees
 Measuring Actual Performance
 Comparing Actual with Standards
 Discussing Reports with Employees
 Taking Corrective Action

19.  Two types of methods
 Traditional method
 Modern method

20. Traditional methods
 Confidential report
 Graphic scales
 Straight ranking
 Paired comparisons
 Grading system
 Forced distribution
 Check list method
 Critical incident method
 Free essay method
 Group appraisal
 Field review
 Nominations
 Work sample tests

21. Modern methods
 Assessment centre
 Human resource accounting
 Behaviorally anchored rating scales
 Management by objectives
 360 degree performance appraisal

22. Appraisal system to be effective must fulfill the
following essentials:
 Mutual trust and confidence:
 Reliability:
 Validity:
 Specific objectives:
 Standardization:
 Training to appraisers:
 Job relatedness:

23. Performance appraisal plays a vital role to
enhance the efficiency of employees and it
helps to improve the performance of
employees.