BBA 6th sem KCM

1. Performance Management and
Appraisal

2. Introduction
• Performance appraisal means evaluating an
employee’s current and/ or past performance
relative to his or her performance standards.
• Managers generally take the integrated nature
of that process—of setting goals, training
employees, and then appraising and
rewarding them. This whole integrated
approach is called performance management

3. Performance Management
• This is the process through which companies
ensure that employees are working toward
organizational goals.
• This process includes practices through which the
manager defines the employee’s goals and work,
develops the employee’s skills and capabilities,
appraises the person’s goal-directed behavior,
and then rewards him or her in a fashion that
hopefully makes sense in terms of both
company’s needs and the person’s career
aspirations.

4. Defining Employee’s Goals and Work
Efforts
• At the heart of performance management is the
idea that the employee’s efforts should be goal
directed.
• Manager should appraise the employee based on
how the person did with respect to achieving
specific standards by which he or she expected to
be measured.
• Managers should also make sure that employee’s
goals and performance standards make sense in
terms of the company’s long term goals.

5. • Clarifying what you expect from your
employee is trickier than it may appear.
• Employers usually write job descriptions, but
the descriptions rarely include specific goals.
• You therefore have to quantify your
expectations.
• The most straightforward way to do this is to
set measurable standards for each
expectation.

6. • The point is that employees should always
know ahead of time how and on what basis
you’re going to appraise them.
• You can’t expect them to manage their own
performance if they don’t know quantitatively
how you expect them to perform.
• Goals you set should be “SMART.”

7. Why Appraising Performance?
• Appraisals provide important input on which the
supervisor can make promotion and salary raise
decisions.
• Appraisals lets the boss and subordinate develop
a plan for correcting any deficiencies the
appraisal might have unearthed, and to reinforce
the things the subordinate does correctly.
• Appraisal can serve a useful career-planning
purpose, by providing the opportunity to review
employee’s career plans in light of his or her
exhibited strengths and weaknesses.

8. Who Should Do the Appraising?
• Peer Appraisals
• Rating Committees
• Self-Rating
• Appraisal by Subordinates
• 360-Degree Feedback

9. Basic Appraisal Methods
• Graphic Rating Scales
• Alternation Ranking Method
• Paired Comparison Method
• Forced Distribution Method
• Critical Incident Method
• Behaviorally Anchored Rating Scales (BARS)
• The Management by Objectives Method (MBO)
• Computerized and Web-Based Performance
Appraisal
• Electronic Performance Monitoring

10. Graphic Rating Scales
• It lists a number of traits and a range of
performance for each.
• The supervisor rates each subordinate by
circling or checking the score that best
describes the subordinate’s performance for
each trait, then totals the score for all traits.

11. Alternation Ranking Method
• Ranking employees from best to worst on a
trait or traits.
• This method is used to indicate the employee
who is highest on the trait being measured
and also the one who is lowest, alternating
between highest and lowest until all
employees to be rated have been addressed.

12. Paired Comparison Method
• Every subordinate to be rated is paired with
and compared to every other subordinate on
each trait.
• Then for each trait, the supervisor indicates
(with plus or minus) who is better employee
of the pair.
• Next, the number of times an employee is
rated better is added up.

13. Forced Distribution Method
• The manager places predetermined
percentages of subordinates in performance
categories, as when a professor “grades on a
curve.”
• The biggest complaints: 44% said it damages
morale, and 47% said interdepartmental
inequities.

14. Critical Incident Method
• This method entails keeping a record of
uncommonly good or undesirable examples of an
employee’s work-related behavior and reviewing
it with the employee at predetermined times.
• Employers often use the critical incident method
to supplement a rating or ranking method.
• This helps ensure that the supervisor thinks
about the subordinate’s all during the year,
because the incidents must be accumulated;
therefore, the rating does not just reflect the
employee’s most recent performance.

15. Behaviorally Anchored Rating Scales
(BARS)
• This method combines the benefits of both
narrative critical incidents and quantitative
ratings, by anchoring a quantified scale with
specific narrative examples of good and poor
performance.

16. The Management by Objectives
Method
• This method requires the manager to set
specific goals with each employee and then
periodically discuss the later progress toward
these goals.
• The term MBO usually refers to an
organization-wide goal-setting and appraisal
program.

17. Computerized and Web-Based
Performance Appraisal
• Several relatively inexpensive performance
appraisal software programs are available.
• These generally enable managers to log notes
on their subordinates during the year, and
then rate these subordinates on a series of
computerized performance traits.
• The program then generate written text to
support each part of the appraisal.

18. Electronic Performance Monitoring
(EPM)
• EPM systems use computer network technology
to provide managers with access to their
employees’ computers and telephones.
• They thus allow “ managers to determine at any
moment throughout the day the pace at which
employees are working, their degree of accuracy,
log-in and log-off times, and even the amount of
time spent on bathroom breaks.”
• Empirical studies provide strong evidence linking
EPM with increased stress.

19. The Appraisal Feedback Interview
• This takes place in an appraisal interview.
• Here the supervisor and subordinates come
together and review the appraisal.
• They make plans to remove deficiencies and
improve on strengths.
• Some people may not feel comfortable
because they do not like to receive or give
negative feedback.

20. Preparing for the Appraisal Interview
• Here three things need to be taken care of:
1. Subordinates must be given at least a week’s
notice to review their work, job description and
analyze problems.
2. They need to study their job description,
compare it with the employee’s performance
standard and review the employees previous
appraisals.
3. Choose the right place and schedule appropriate
time.

21. Conducting the interview
• The main objective of the interview is to reinforce
satisfactory performance and improve on unsatisfactory
ones.
• This can be done by being direct and specific and talk in
terms of objective work data like absences, inspection
reports etc.
• Another important thing is to get agreement from the
employees on how things are to be done and by when.
• The employees also should be made clear about the
expected standard and specify any violation of the
standard.
• Supervisors also needs to deal with defensiveness of the
person being accused for poor performance.

22. • Finally, the managers must make sure that
subordinates are not trying to impress them in
order to influence their ratings.

23. Toward More Effective Appraisals
• Managers have to deal with quite a number of
problems during appraisal.
• Some common appraisal problems are:
1. Unclear Standards.
2. Halo Effect
3. Central Tendency
4. Leniency or Strictness
5. Bias

24. Legal issues in performance appraisal:
• Performance appraisal affects raises,
promotions and other career opportunities.
• If the manager is bias in the appraisals he
does, it will not be fair for the employees.
• Therefore, the employee’s appraisal process
must be legally defensible.