2. Performance Appraisal
Systematic assessment and descriptions
of an employee’s accomplishments in the
assigned tasks and assessment of job
related strengths and weaknesses.
Organization needs to know how an
employee has performed just as an
employee needs to know how his
performance has been viewed by the
3. Performance Appraisal:
• It is an objective assessment of an individual’s
performance against well defined benchmarks.
• PA is a formal, structured system of measuring and
evaluating an employees 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, organisation and
society all benefit.
• Evaluating factors includes job knowledge, quality
and quantity of output, leadership qualities,
supervision, co-operation, dependability, judgment,
versatility, health, etc.
4. Relationship of PA and job analysis:
Describes work and
requirement of a
requirements into levels
of acceptable or
Describes the job-
and weaknesses of
5. Main Purpose of Employee Assessment:
To effect promotions based on competence and
To confirm the services of probationary
upon their completing the probationary period
To assess the training and development needs of
To decide upon a pay raise where pay scales
have not been fixed.
6. To let the employees know where they
stand insofar as their performance is
concerned and to assist them with
constructive criticism and guidance for the
purpose of their development.
To improve communication.
For determining whether HR programes
such as selection, training, and transfers
have been effective or not.
7. Multiple Purposes of PA:
General Purpose Specific Purpose
Developmental Issues Identification of individual needs
Determining Transfers and Job Assignments
Identification of Individual Strengths
Administrative Uses/ Decisions Salary
Retention or Termination
Identification of poor performers
Organizational Maintenance/ Objectives HR Planning
Determining Organization Training Needs
Evaluation of Organizational Goal
Evaluation of HR systems
Documentation Criteria for Validation Research
Documentation for HR Decisions
Helping to Meet Legal Requirements
8. What is the purpose of performance
Performance appraisals permit you
and your employee to review the
employee’s accomplishments of the
year. Performance appraisal sets the
foundation of the goals and objectives
for your employee for the upcoming
9. Q. How should I use the self-evaluation process?
After your employee completes his/her
performance evaluation, review it with
him/her, come to an agreement on the
self-assessment and , if appropriate,
incorporate the employee’s comments
along with your own. The evaluation
should not be 100% the employee’s
10. Q. Is there a special formula to use to reach the
No, there is not.
Supervisors/managers must look
objectively at the employee’s
competencies and responsibilities and
ask yourself, “On the whole, how did
this employee do?”.
11. Performance Appraisal contributes to firm’s
13. 1. Objectives of Appraisal:
It includes effecting promotions and transfers,
assessing training needs, awarding pay
Appraisal in future would assume systems
orientation from traditional way, which aims at
improving the performance instead of
Towards end, appraisal system seeks to
evaluate opportunity factors including
physical environment such as noise,
ventilation and lightings, available resources
as human and computer assistance and
14. Multiple Objectives
It provides inputs to
a. Administration – for pay & promotion
b. Employees on his strengths &
c. Training, Counseling, Career
Planning and Succession Planning
d. Organization restructuring issues
15. Performance Appraisal Systems:
Traditional Systems System oriented
Guiding Value Attribution to individual Attribution to system
Primary Goals Control, documentation Development, problem
Leadership practices Directional, Evaluative Facilitative, coaching
Appraisal Frequency Occasional frequent
Degree of formality High Low
Reward Practices Individual Orientation Group Orientation
16. 2. Establish Job Expectations:
The second process in job appraisal
process which includes informing the
employee what is expected from him/her
on the job.
Normally a discussion is held with the
superior to review the major duties
contained in the job description.
Individuals are not expected to begin the
job until they understand what is expected
17. 3. Design Appraisal Program:
18. 4. Performance Interview
It has 3 goals:
To change behavior of employees whose
performance does not meet organizational
requirements or their own personal goals.
To maintain the behavior of employees
who perform in an acceptable manner.
To recognize superior performance
behaviors so that they will be continued.
19. 5. Use of Appraisal Data:
Data and information outputs of a
performance-appraisal program can
critically influence the coveted employer-
employee reward opportunities.
It could be useful in following areas of
I. Remuneration administration
II. Validation of selection programs
III. Employee training and development
IV. Promotion, transfer and lay-off decisions
20. What should be Rated?
There are six criterion for assessing performance:
Quality: The degree to which the performance of an
activity conforms with the ideal way of performing
Quantity: The amount produced, expressed in
monetary terms, no. of units, or no. of completed
Timeliness: The degree to which an activity is completed
or a result is produced, at the earliest time desirable
from the standpoint of both coordinating with the
output of others and of maximizing the time available
for other activities.
21. Cost Effectiveness: The degree to which the
organization's resources is maximized in the sense
of getting the highest gain or reduction in loss from
each unit or instance of use of a resource.
Need for Supervision: The degree to which a job
performer can carry out a job function without
either having to request supervisory assistance or
requiring supervisory intervention to prevent an
Interpersonal Impact: The degree to which a performer
promotes feeling of self-esteem, goodwill & co-
operation among co-workers & subordinates.
22. TIMING OF EVALUATION
How often should the employee be
The general trend is to evaluate once in
three months, or six months, or once in a
according to a survey conducted in 1997,
70% of the organization conduct
performance appraisal once a year.
Newly hired employees are rated more
frequently than older ones.
Frequent assessment is better than
phased evaluation because in former case
we get constant feedback enabling a
person to improve his/her performance if
23. METHODS OF APPRAISAL
There are numerous methods to measure the
quality & quantity of employee’s job performance.
Each of the method is effective for some purpose,
for the organizations. Broadly, all the approaches to
appraisal can be classified into:
Traditional Methods (past oriented)
Modern Methods (future oriented)
26. Traditional Methods
1. Ranking method: One employee is
compared with all others for the purpose of
placing them in a simple rank order of worth. The
employees are ranked from the highest to the
lowest or from the best to the worst. The
employee who is the highest on the
characteristics being measured and also the one
who is the lowest, are indicated. Then the next
highest and the next lowest are chosen ,
alternating between next highest and lowest until
all the employees to be rated have been ranked.
Thus, if there are ten employees to be appraised,
there will be ten ranks from 1 to 10.
1. It does not tell that how much better or
worse one is than another,
2. The task of ranking individuals is difficult
when a large number of employees are
3. It is very difficult to compare one
individual with others having varying
behavioural traits. To remedy these
defects, the paired comparison method pf
performance appraisal has been evolved.
28. 2. Paired-comparison method-
The appraiser compares each employee with
every other employee, one at a time. The no.
of comparisons may be calculated by following
Where N stands for no. of employees
3. Grading- certain categories of worth are established in
advance and carefully defined. There can be three categories
established for employees : outstanding, satisfactory, and
unsatisfactory. There can be more than three grades. Employee
performance is compared with grade definitions. The employee
is allocated to the grade that best describes his or her
performance. The major drawback of this method is that the
rater may rate most of the employees on the higher side of
29. 4. Forced Distribution Method: One of the error in rating is
central tendency- clustering of large no. of employees around
a high point on a rating scale. Forced distribution helps in
overcoming this problem by compelling the rater to distribute
the ratees on all points on the rating scale. The method is
based on the assumption that the employees performance
level conforms to a normal statistical distribution.
30. 5. Forced Choice Method: The rater is given a series of
statement about the employees. These statements are
arranged in blocks of two or more, and rater indicates which
statement is most or least descriptive of the employees. In
this method the rater if forced to select statements which are
Example: Typical statements are
Learns Fast ………....works hard
work is reliable……..performance is a good example for
Absent often………...others usually tardy
absence of personal bias in rating
statements may not be properly framed-they may not be
precisely descriptive of the ratee’s traits
31. 6. Checklist method: Under this method, a checklist of statements
on the traits of the employee and his/her job is prepared in two
columns-viz, a ‘Yes’ column and ‘No’ column. The rater is just
supposed to tick Yes or No in front of those traits being
evaluated. When points are allotted to the checklist it becomes
a ‘weighted checklist’.
ease of administration
limited training of rater
susceptibility to rater’s biases (especially halo effect)
use of personality criterion instead of performance
use of improper weights by the HR Department
32. 7. Critical Incidents Methods: The approach focuses on certain
critical behavior of an employees that make all the difference
between effective & non effective performance of a job. Such
incidents are recorded by superiors as & when they occur.
evaluation is based on actual job behavior
the approach has descriptions in support of particular rating of
chance that subordinates will improve because they learn, what
is expected from them
negative incidences are more noticeable than positive ones
Overly close supervision may result
33. 9. ESSAY METHOD:
The rater must describe the employee of broad
categories, such as
i. The rater’s overall impression of the employee’s
ii. The promotability of the employee
iii. The jobs that the employee is now able or
qualified to problem
iv. The strength and weaknesses of the employee
v. The training and the development assistant
required by the employee
The strength of this method depends on the writing
skills and analytical ability of the rater.
34. 10. FIELD REVIEW METHOD:
Appraisal by someone from outside the assessee’s
own department, usually someone from the
corporate office or HR office. The outsider reviews
employee records and holds interviews with the
ratee and his or her superior. It is used for
making promotional decision at the managerial level.
An ‘outsider’ is not usually familiar with conditions
in an employee’s work environment.
An ‘outsider’ review does not have the opportunity
to observe employee behavior of performance over
a period of time and in a variety of situations.
35. 11. CONFIDENTIAL RECORDS:
Maintained mostly in government departments. The
report has following 14 items-
Attendance, Self-expression, Ability to work with
others, Leadership, Initiative, Technical ability, Ability to
understand the new material, Ability to reason,
Originality and resourcefulness, Areas of work that
suits the person best, Judgement, Integrity,
◦ 12 of these are filled on a 4-point grade scale.
◦ Integrity and justification are considered separately.
◦ Overall rating on a 5-point grade scale is separately
PERFORMANCE TESTS AND OBSERVATIONS:
Test of knowledge or skills to measure the potential
more than actual performance.
36. Modern Methods
This technique is used because of following reasons-
It is not enough if only the past performance is
Performance in the coming days is equally
Commonly used techniques:
Management by Objectives
37. MANAGEMENT BY OBJECTIVES
MBO is a process that converts Organisational
objectives into individual objectives.
The MBO philosophy is built on the
assumptions that individuals can be responsible,
can exercise self-direction and not require
external controls and threats of punishments to
motivate them to work towards their objectives.
38. MANAGEMENT BY OBJECTIVES:
1. Establishment of Goals
2. Setting the performance standard
3. Actual level of job attainment is compared with
the goals agreed upon.
4. Establishing new goals and new strategies for
goals not previously attained.
It is used with managerial personnel
and employees who have a fairly wide range of
flexibility and self-control in their jobs.
Not applicable for all jobs in all organizations
39. PSYCHOLOGICAL APPRAISALS:
When psychologists are used for evaluations, they asses an
individual’s future potential and not past performance. The appraisal
consists of in-depth interviews, psychological tests, discussions with
supervisors and a review of other evaluations.
An assessment center is a central location where managers may
come together to have their participation in job-related exercises
evaluated by trained observers.
The characteristics assessed in a typical assessment
center include assertiveness, persuasive ability, communicating
ability, planning and organizational ability, self-confidence, resistance
to stress, energy level, decision-making, sensitivity to the feelings of
others, administrative ability, creativity and mental alertness.
40. 360-DEGREE FEEDBACK:
A systematic collection of performance
data on an individual or group, derived from a
number of stakeholders (immediate
supervisors), team members, customers,
peers, and self.
It facilitates greater self-development of the
It provide formalized communication links
between an employee and his or her internal
or external customers.
Receiving feedback on performance from
multiple sources can be intimidating.
The technique take a long time on selecting
the rater, designing questionnaires, and
analyzing the data.
41. Behaviorally Anchored Rating Scales: BARS are
rating whose scale points are determined by statements of
effective and ineffective behaviors. A rater is expected to
indicate which behavior on each scale best describes an
employee’s performance. BARS has following features:
Area of performance to be evaluated are identified & defined
by the peoples who will use the scales.
The scales are anchored by descriptions of actual job
behavior that supervisor agree, represents specific levels of
All dimensions of performance to be evaluated are based on
observable behaviors & are relevant to the job being
evaluated since BARS are tailor-made for the job.
Since the raters who will actually use the scales are actively
involved in the development process.
42. Construction of BARS (steps)
1. Identification of performance measures
(identify those areas on which
performance of persons are going to be
2. Identification of critical Behaviour
(different Behaviour in one situation)
3. Re-classification of critical behaviour
4. Scaling of critical behaviour
5. Development of bars instrument
43. Create a culture of excellence that inspires every
employee to improve and lend himself or herself to be
Align organizational objectives to individual aspirations.
Clear growth paths for talented individuals.
Provide new challenges to rejuvenate careers that have
reached the Plateau stage.
Forge a partnership with people for managing their
CHALLENGES OF PERFORMANCE
44. Empower employees to make decisions without the fear
Embed teamwork in all operational processes.
Debureaucratise the organization structure for ease of
flow of information.
CHALLENGES OF PERFORMANCE
45. Performance appraisal data are used to make many
important HR decisions (e.g. pay, promotion, training,
transfer, and termination).
The appraisal system is a common target of legal
disputes by employees involving charges of unfairness
LEGAL ISSUES ASSOCIATED WITH
46. Problems in Performance Appraisal
1. Relating to System-
a. How to evolve measure to assess
b. Generate data on performance
c. Understanding of system at the top
d. Reliable technique for measuring
comparative merit and performance.
47. Problems in Performance Appraisal
2. Relating to Appraiser-
a. Playing God creates anxiety.
b. Evaluation of personality traits.
c. Bias and halo effect
d. Regency of incidents
e. Central Tendency
f. Too harsh too easy
48. Problems in Performance Appraisal
3. Relating to Appraisee-
His perspective on system depends on
how he earns recognition vis-à-vis others.
His criteria are rarely explicit.