2. People differ in their abilities and aptitudes. Even if the
same basic education and training is given to them, these
differences cannot be eliminated. There will always be
difference in the quantity and quality of work done by
different employees even on the same job. The individual
employees may also like to know their level of
performance in comparison to others, so that they can
improve upon it. All this emphasis the need to have a
suitable Performance Appraisal System to measure the
relative merits of each employee.
3. According to Dale S. Beach, “Performance Appraisal is
the systematic evaluation of the individual with respect to
his/her performance on the job and his/her potential for
Performance Appraisal goes by various names such as
Performance Evaluation, Progress Rating, Merit Rating
and Merit Evaluation etc.
4. Process of evaluating the performance of employees.
Systematic examination of an employee’s strengths and
On going or continuous process.
Secure information necessary for making objective
decisions like advance increment, transfer and motion.
Appraisals of employees are based on well defined
criteria such as:
* Knowledge of work * Quality and quantity of
* Ability to do the work * Relations with others
* Personal qualities like dependability, adaptability,
6. 1) Work related objectives
To improve efficiency.
To help management in fixing employees according to
their capacity, interest, aptitude, and qualifications.
To carry out job evaluation.
2) Career development objectives
To assess the strong and weak points.
To determine career potential.
To plan promotions, transfers, lay offs, etc.
To plan career goals.
7. 3) Communication
To provide feedback to the employees.
To establish clear jobs.
To provide coaching, counselling, and motivation to
To develop positive superior-subordinate relations.
4) Organisational Objectives
To serve as a basis for promotion and demotion.
To serve as a basis for wage and salary administration
and considering pay increments.
To serve as a basis for planning suitable training and
8. If not done right, performance appraisal can create a
Performance Appraisals are very time consuming and
can be overwhelming to mangers supervising many
It is based on human assessment and is subject to raters’
errors and biasness.
Some appraisees may find it a very stressful environment
for everyone involved.
11. GROUP APPRAISAL METHOD
Employees are rated by a group of 3 to 4 persons having
knowledge of employees’ performance.
Group is supervised by a supervisor by telling its duties.
It discusses the set standards, actual performance and
its causes and suggestions, if any.
Process of ranking all employees as per their
Employees are rated on same factors.
Best placed first and Worst is last.
Degree of Difference is not ascertained between two
In Paired Comparison, every employee is compared with
12. CHECKLIST APPRAISAL METHOD
Questions, with their answers as Yes or No, describe
various type of behaviors of employees.
Rater ticks relevant answer as per its observations.
Weights are attached to each question.
FIELD REVIEW METHOD
Appraisal is done by someone not of the employee’s
department by getting information from respective
Thorough investigation is done for current working of
employee, its reasons and improvements required.
Employees are classified into Outstanding, Satisfactory
13. FORCED DISTRIBUTION METHOD
Appraiser is forced to rate the employees into pre-
determined statistical scale ranges.
Two or more employees can be given equal rating.
Employees are distributed into Outstanding, Good,
Average, Below Average and Poor.
14. GRAPHIC RATING SCALE METHOD
Specific factors and qualities are used for rating purpose.
Five degrees are given to each factor.
Printed Appraisal Form is provided to appraiser.
Factors are of two types, namely, Characteristics and
15. CONFIDENTIAL REPORT METHOD
Appraiser writes about employee in an unstructured way
related to his/her performance, ability and character.
Appraiser acts casually while filling confidential reports.
Appraised employee never knows his/her weakness and
opportunities available to them.
Non-Quantitative technique of appraisal.
Superior writes report about the appraisee in detail.
Doesn’t require complex format and training to complete
16. CRITICAL INCIDENT METHOD
Supervisor records significant incidents like successful or
poor action by an employee.
Examples are Accuracy of Work, Initiative, Dependability,
Behaviours are recorded under different characteristics.
17. 1) Halo error
Influence of one character trait of an employee over his/her
2) Central tendency error
Appraiser has inadequate information about the appraisee
or gives less attention to the appraisal process.
3) Leniency or Strictness error
Appraisers being very lenient or very strict in rating the
4) Recent behaviour bias
Rating the employees based on their performance in recent
times instead of average behaviour .
18. 1) Management by Objectives
2) Behaviorally Anchored Rating Scale
3) 360 Appraisal and Feedback
19. MBO also known as Management by Results (MBR) and
Goal Setting Approach.
In this method, emphasis is laid on stating objectives for
Key Result Areas (KRAs) in quantifiable terms.
Objectives are laid down by aligning goals and
subordinates objectives throughout the organisation.
It includes ongoing tracking and feedback in the process
to reach objectives.
20. According to George S. Ordiorne, the system of
Management by Objectives can be described as a process
whereby the superiors and subordinates of an organisation
jointly identify its common goals, define each individual's
major areas of responsibility in terms of results expected
from him and use these measures as guides for operating
the unit and assessing the contribution of each of its
Concept of MBO
Let people know what is expected from them.
Allow employees to participate in setting goals.
Tell people how they are doing.
Reward on the basis of accomplishment.
23. Better planning
Means of control
Better appraisal of
Difficulty in setting
Resistance to change
Lack of training
Lack of follow up
Emphasis on short-term
24. Knowledge based Enterprises
To build employee’s management and self leadership
MBO in Action
• Many corporations praise the effectiveness of MBO,
including Intel, Microsoft, Tata Motors, Hindustan
Unilever and countless others.
• Objectives can be set in all domains of activities.
25. Top management support
Education about MBO
Active participation in goal setting
Decentralisation of authority
Orientation of executives
Integration of MBO program
26. Designed to identify critical areas of job performance.
To describe the more effective behaviour for getting the
Combined element of traditional rating scale and critical
28. Accurate results (experts)
Acceptable (due to
Basis for developmental
Providing feedback to
Errors in rating
Activity oriented and not
Not necessarily superior
to traditional methods
29. According to Milliman and others, “360° appraisal is the
process of systematically gathering data on a person's
skills, abilities and behaviours from a variety of sources-
the managers, peers, subordinates and even customers
To provides enhanced view about the performance of
It involves rating of an employee or manager by
everyone above, alongside or below him.
First developed by General Electronics Co., USA in 1992.
Companies like WIPRO, RELIANCE, INFOSYS, THOMAS
COOK, etc. apply this method.
30. Self Appraisal
Peer Group Appraisal
The above four components
complete the 360°, each one
representing 90° of the
31. It reveals strengths and
weaknesses of the
The gap between self
assessment and the views
of ones’ colleagues is
Inflexible managers are
forced to initiate self
It helps improve overall
Responses may be
Performance in terms of
attaining goals is ignored.
Feedback may cause
frustration and resentment
among the employees.
360° appraisal is a
complex and time
32. 1) Determination of purpose
The objective of the appraisal programme may be either to
appraise the actual performance of individuals on their
present jobs or to determine the potential to do higher jobs
2) Establishing the criteria of performance
The criteria to be used for measurement of performance
will vary from job to job.
33. 3) Determination of frequency of appraisal
Performance appraisal is a continuous process for the
supervisor. The frequency will be determined by the
objectives of appraisal and the level of the employees to be
4) Selection and Training of appraiser
In order to avoid subjectively in appraisal, it is advisable to
give sufficient training to the appraiser. The performance
should be appraised by two persons independently in order
to have objective results.
5) Designing of appropriate forms
To keep a record, suitable forms should be prepared for
appraisal of all types of employees such as clerical,
supervisory, operative and managerial. The contents of the
forms will be determined by the purpose of appraisal.
34. Should be simple and easy to understand.
Should be fair , just, and equitable i.e. performance
Mutual understanding between employees and behaviour
In consultation with subordinates.
Should fit structure and operations (taking into
consideration of competitors).
Creation of reliable climate.
Designed to achieve specific objective.
No personal bias.
Discussion of results with employees.
35. Broad process that includes identifying and prioritizing
Defining what constitutes progress towards goals.
Setting standard for measuring results.
Tracking progress towards goal.
Regularly reviewing progress.
Reinforcing effective goal-oriented activities.
Finally intervening to create improvements when needed.