Performance Appraisal

By : Divya
Narang
 What is Performance
Appraisal?

• Performance appraisal is the process

by which organizations evaluate
employee job performance.

• It is an objective assessment of an
individual’s performance against well
defined benchmarks.
Uses of Performance Appraisals
• Training and development needs.
• Effecting Promotions & transfers.
• Awarding Pay
Increase,Bonus,rewards.
• Provide the opportunity for
organizational diagnosis and
development.
• For Judging the effectiveness of HR
Program.
• To confirm the services f
probationary employees.
The Performance Appraisal
Process
Issues in Designing Appraisal Program
 Formal Vs informal ?
• Formal – Specified interval of time
• Informal – No specified time depends upon
the requirements
Whose Performance ?
• Employees rated as : individuals,
groups,divisions,teams,organisation
Who are Raters?
• Immediate superior,
subordinate,peers,clients,360 Degree
Appraisal,rating committees,self-appraisal
Problems Of Rating
• Leniency & Severity
• Central Tendency
• Halo Error
• Rater Effect
• Primacy & Recency Effects
• Perceptual Set
• Performance Dimension Order
• Spillover Effect
• Status effect
Solving Rater’s Problems
• Providing training to raters

Uses of training raters

• Rater has observed and is familiar with
behaviors to be appraised
• Documentation of behaviors
• Maintaining Checklist
• Well Defined Performance factors
• Rater aware of personal biases
What Should Be Rated?

• Quality
• Quantity
• Timeliness
• Cost Effectiveness
• Need for supervision
• Interpersonal impact
When To Evaluate?

How often an employee should be

evaluated?
• Once in a year
• After every 6 months
• After every 3 months
Methods Of Appraisal
Past-Oriented Future-Oriented
Methods Methods
• Rating Scales • MBO
• Checklists
• Assessment Centres
• Forced Choice
• 360 Degree Appraisal
• Forced Distribution
• Critical Incident • Psychological
• BARS Appraisals
• Field Review
• Tests & Observations
• ACRS
• Essay
• Cost Accounting
• Ranking methods
• Paired Comparisons
 Rating Scales Method

Excellent Good Acceptable Fair

Poor
5 4 3 2
1

1. Dependability … … … …
…
2. Initiative … … …
… …
3. Overall Output … … …
… …
4. Attendance … … …
… …
5.Total
Attitude
Score … … …
+ + + +
 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
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
Forced Distribution method

No.
of
employees

10% 20% 40% 20% 10%

poor Below averag g Excellent

averag e ood
e

Force distribution curve

 Critical Incident
Ex: A fire, sudden breakdown, accident

Workers reaction scale

A informed the supervisor immediately 5

B Become anxious on loss of output 4
C tried to repair the machine 3
D Complained for poor maintenance 2
E was happy to forced test 1

BARS( Behaviorally Anchored

Step 1. Identify Rating Scale)
critical incidents
Step 2. Select performance dimension
Step 3. Retranslate the incidents
Step 4. Assign scales to incidents
Step 5. Develop final instrument
 Field Review Method
Performance Subordinate Peers Superior
Customer
Dimension

Leadership ^ ^

Communication ^ ^

Interpersonal skills ^ ^

Decision making ^ ^ ^

Technical skills ^ ^ ^

Motivation ^ ^ ^
 ACR(Annual Confidential Report)
Maintained mostly in Govt Departments
The report had 14 items :
• Attendance
• Self-Expression
• Ability to work with others
• Leadership
• Initiative
• Technical Ability
• Job Knowledge
• Ability to understand new material
• Ability to reason
• Originality & Resourcefulness
• Areas of work that suits the person best
• Judgement
• Integrity
• Responsibility
• Defect
 Ranking Method
Employee Rank

A 2

B 1

C 3

D 5

E 4
 Paired Comparison Method

Employee-1 _____ versus Employee-2 _____

Employee-1 _____ versus Employee-3 _____
etc.
 MBO Process
•Set organizational goals
•Defining performance target
•Performance review
•Feedback
 Essentials of an effective
appraisal system
• Mutual trust
• Clear objectives
• Standardizations
• Training
• Job relatedness
• Documentation
• Feedback and participation
• Individual differences
• Post appraisal review
• Review and appeal