These Slides describes about the Performance Management and Performance Appraisal system in an organization

1. PERFORMANCE
MANAGEMENT & APPRAISAL
What gets MEASURED gets IMPROVED.

2. Performance Management
An iterative process of observation and communication
to support, retain and develop employees
for organization success.

3. Performance Management
• Armstrong and Baron define Performance Management as “ a
Process which contributes to the effective management of
individuals and teams in order to achieve high level of
organizational performance.”
• In other words PM Should be:
– Strategic- it is about broader issues and long-term goals.
– Integrated- it should link various aspects of the business, people
management ,individuals and teams.

4. Performance Management
It should incorporate:
• Performance improvement- throughout the organization, for
individuals, teams and organizational effectiveness.
• Development- unless there is continuous development of
individuals and teams, performance will not improve.
• Managing Behaviour-ensuring that individuals are
encouraged to behave in a way that allow better working
relationship.

5. Why Manage Performance?
• Encourage and reward behaviors that are
aligned with organizational mission and
goals.
•People want to feel what they do adds value
and understand their contribution to the
team.
•Curb or redirect non-productive activities.

6. Factors that Influence Performance
Performance= f(A,M,E)

7. Parameters
PURPOSE To improve organizational performance
HOW Regular interactions between managers and employees
WHERE At the work- place
WHEN Continuously, often half yearly
BY WHOM Immediate supervisor and the employees.

8. The PM Process

9. Performance Appraisal
• Performance Appraisal is the systematic evaluation of the
individual with respect to his/her performance on the job and
his or her potential for development.
• It is a formal, structured system of measuring and evaluating
an employee’s job, related behaviors and outcomes to
discover how and why the employee is presently performing
on the job and how the employee can perform more
effectively in the future so that the employee, organization
and society all benefit.
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10. Performance Appraisal
• Performance Appraisal is a process that consolidates goal
setting, performance appraisal, and development into a
single, common system, the aim of which is to ensure that the
employees performance is supporting the company’s
strategic aims.
• PA aims directly to link together individual goals,
departmental purposes and organizational objectives.

11. Performance Appraisal
Process of
• periodically measuring employees’ progress
toward agreed-upon objectives,
• providing constructive feedback, and
• taking corrective action if goals are not being
achieved
Copyright © 2005
Prentice-Hall

12. Relationship between job analysis and
performance appraisal:
Job analysis performance Appraisal
Standard
Describes work
& Personnel
Requirement
Of a particular
job
Translate job
Into levels of
To acceptable
Or unacceptable
performance
Describes the
Job relevant
strengths and
weakness of
Each individual

13. Issues in Appraisal System
Appraisal Design
Formal and Informal
Whose Performance?
Who are the raters?
What Problems?
What Methods?
When to evaluate?
What to evaluate?
How to Solve?

14. Whose performance should be
rated?
• Individual
• Work group
• Division
• Organization
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15. Who are Raters?
• Immediate Supervisor
• Specialist from the HR department
• Subordinates
• Peers
• Committees
• Clients
• Self appraisal
• Combination of several
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16. Why PM & PA’s?
• Increased competitive pressures which put an
emphasis on performance improvement.
• Attempts to achieve a clearer correlation between
organizational goals and individual targets.
• The shift from collectivism to individualism, which
has allowed for a more rigorous specification of
individual performance standard and measure.

17. Characteristics
• It is a step by step process
• It examine the employee strengths and weaknesses
• Ongoing and continuous process
• Secure information for making correct decisions on employees
• Clarify and help to translate corporate goals into individual
team, department and divisional goals.
• Provide regular communication about business plans and
progress in achieving objectives.
• Create a shared understanding of what is required to improve
performance and how it is to be achieved.

18. Characteristics
• Encourage self-management of individual performance.
• Systematically measure all performance against jointly agreed
goals.
• Ensure that people are placed in the most suitable position.
• Indentify employees ambitions regarding personal career
development.
• Identify training needs.
• To increase motivation.
• HR Planning
• To improve performance.

19. Purpose / Objective
• Establishing job/performance targets for the coming year
and clarifying expectations.
• Assessing performance achievement of past year and
providing performance feedback: strengths, weaknesses,
future improvements – effectiveness, efficiency, timely
etc.
• Identifying development needs
• Awarding of performance based incentive – salary
increment
• Awarding of level upgrade and/or promotion
• Grievance and discipline programmes
• HR planning
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20. Purpose / Objective
• Performance Feedback
• Reward Management
• Training and Development Decision
• Facilitate career and succession planning
• Supervisory Understanding
• Promotion , Transfer , Separation Decision
• Diagnose the S & W of individuals
• Provide coaching, counseling, career planning to subordinates
• Develop positive relation and reduce grievance

21. Appraisal Benefits (cont.)
• Appraisals offer employees:
– Direction
– Feedback
– Input
– Motivation

22. Appraisal Benefits
• Appraisals offer the company:
– Documentation
– Employee Development
– Feedback
– Legal protection
– Motivation system

23. Benefits of Performance Appraisal
For the Appraisee
• Better understanding of their role in the organization- what is
expected and what needs to be done to meet those
expectations.
• Clear understanding of their strengths and weakness to
develop themself into a better performer in future.
• Increased motivation, job satisfaction, and self-esteem.
• Opportunity to discuss work problems and how they can be
overcome.
• Improved working relationship with supervisors.

24. For the Management
• Identification of performers and non-performers and their
development towards better performance.
• Opportunity to prepare employees for assuming higher
responsibilities.
• Identification of training and development needs
• Generations of ideas for improvements
• Better identification of potential and formulation of career
plans.
• Opportunity to improve communication between the
employees and management.

25. For the Organization:
• Improved performance throughout the organization.
• Creation of a culture of continuous improvements
and success.
• Conveying the message that people are valued.

26. Why Appraisal are Important?
• Recognize Accomplishments
• Guide Progress
• Improve Performance
• Review Performance
• Set Goals
• Identify Problems
• Discuss career development

27. How PA adds CA to Firm

28. PERFORMANCE ASSESSMENT GUIDE
Job Standards are
Communicated
Are job standards
being achieved?
Employee
receives feedback
on performance
Supervisor
investigates reasons
Performance Planning
Worksheet may be
developed or modified
Discipline may
be imposed
Are job standards
being achieved?
No
No
Yes
Yes

29. Process of PA
1. Setting
performance
standards
1. Setting
performance
standards6. Taking corrective
standards
6. Taking corrective
standards
5. Discussing
results
5. Discussing
results
4. Comparing
standards
4. Comparing
standards
3. Measuring
standards
3. Measuring
standards
2. Communicating
standards
2. Communicating
standards

30. Steps in PA

31. Performance Evaluation Problems
• Lack of standards (leads to only a subjective guess or feeling about
performance)
• Irrelevant or subjective standards (non job related standards)
• Unrealistic standards (reasonable but challenging standards have the
potential to motivate)
• Poor measures of performance
• Rater errors (biases, prejudices)
• Poor feedback to employee (less tactful, threatening)
• Negative communications (communication of negative attitudes such
as inflexibility, defensiveness and non-developmental approach)
• Failure to apply evaluation data
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32. Performance Criteria
• Job Descriptions should be prepared and provided to
respective staff members; it should be upgraded/modified as
and when the nature of job/responsibilities change
• Mutual expectations/targets should be discussed and agreed
• Evaluation should be primarily based on actual work done and
targets achieved, not on other unrelated issues
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33. Performance Rating / Process ..
• Direct supervisors are to be responsible for evaluating their
subordinates and, if warranted, held accountable for ratings
provided; evaluations done by the supervisor should not be
unilaterally changed at higher levels without a transparent
mechanism.
• Additional motivational factor must also be linked to the level
of effort; it should not be rigidly pegged to forecasted
revenue generation expectations of the company.
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34. Performance Feedback
• Feedback should be given instantaneously
and continuously, not only at the end of
the performance period
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35. Methods of Rating
• Rating scales
Several numerical scales each representing a job related performance
criterion such as dependability, initiative, output, attendance, attitude,
cooperation and the like.
• Checklist Method
Tick the column- Yes or No- Total score is arrived at.
Weighted Checklist if weighted
• Forced Choice Method
Description given and the rater indicates which statements is most or least
descriptive of the employee…..HR
• Forced Distribution Method
15% high performers
20% high –average performers
30% average performers
20% low-average performers
15% low performers
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36. Methods of Rating
• Critical Incident Method
Focuses on certain critical behaviour of an employee that make all the difference
between effective and non effective performance of the job. Such incidents are
recorded by the superiors as and when they occur
• Field Review Method
This is an appraisal by someone outside the assessee’s own department usually
someone from the HR department or corporate office.
• Performance Test and Observations
Paper-and-pencil test or an actual demonstration of skills
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37. Methods of Rating
• Confidential Reports
• Essay Method
It can be used independently but it is combined with other methods.
Comparison Evaluation Approaches
• Ranking Method
Starting from best to worst- no explanations or questioning on ‘how’ and
‘why’
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38. Checklist method
•Simple checklist method
•Weighted checklist method
•Forced choice method
Simple checklist method:
Is employee regular Y/N
Is employee respected by subordinate Y/N
Is employee helpful Y/N
Does he follow instruction Y/N
Does he keep the equipment in order Y/N

39. Weighted checklist method
weights performance rating
(scale 1 to 5 )
Regularity 0.5
Loyalty 1.5
Willing to help 1.5
Quality of work 1.5
Relationship 2.0

40. 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

41. Graphic Rating Scale
Name_____________________________ Dept.___________________________ Date_______________
Outstanding Good Satisfactory Fair Unsatisfactory
Quantity Volume of acceptable
of work work under normal conditions ___ ___ ___ ___ ___
Comments:
Quality Thoroughness, neatness, and ___ ___ ___ ___ ___
of work accuracy of work
Comments:
Knowledge Clear understanding of the facts ___ ___ ___ ___ ___
of job or factors pertinent to the job
Comments:
Personal
qualities Personality, appearance, ___ ___ ___ ___ ___
sociability, leadership, integrity
Comments:

42. Key Points to Remember
• You must conduct objective appraisals on a
scheduled basis.
• Appraisals tell employees how they’re doing and
how they can improve.
• Appraisals help create a system of motivation and
rewards based on performance.

43. THANK YOU