Unit - 3

Performance Appraisal

Contents
Concept Objectives of Performance Appraisal Process Methods- Uses and Limitations

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BBA Semester - III H.R.M & OB

Definitions of Performance Appraisal

Wendell French, the formal, systematic assessment of how well employees are performing their jobs in relation to established standards, and the communication of that assessment to employees

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BBA Semester - III H.R.M & OB

Concept of Performance Appraisal

Performance Appraisal is a method which involves
Setting Work Standards Assessing Actual Performance Providing Feedback to the Employees

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BBA Semester - III H.R.M & OB

Contents
Concept Objectives of Performance Appraisal Process Methods- Uses and Limitations

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BBA Semester - III H.R.M & OB

Objectives
Feedback to Employee Compensation Decisions Reckoner for Promotion / Demotion /Transfer Inputs for Personal Development Reduce Subjectivity Clarity for the Employee Improves Supervision
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BBA Semester - III H.R.M & OB

Contents
Concept Objectives of Performance Appraisal Process Methods- Uses and Limitations

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BBA Semester - III H.R.M & OB

Who will Appraise?

Immediate Supervisor Employees Peers Self Appraisal Employees Subordinates Higher Level Manager Personal Department Specialist

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BBA Semester - III H.R.M & OB

When to Appraise?
Periodic Appraisals
Quarterly, Bi-annually, Yearly

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BBA Semester - III H.R.M & OB

What to Appraise?
What do we want to evaluate? Extracted from the Job Analysis Mostly Organisational Goals which the employee was responsible for Can also have some Softer Aspects

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BBA Semester - III H.R.M & OB

Process of Performance Appraisal

Job Analysis
Understanding the deliverables Detailing the Job Description

Establishing Standards of Performance

Setting Performance Standards Benchmarks to Measure Performance Attainable by a Normal Employee Clear & Understandable
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BBA Semester - III H.R.M & OB

Process of Performance Appraisal

Communicating Performance Standards
Appraiser vs. Appraisee Both should be communicated the standards Communication should be written

Measuring Actual Performance

Objective Measures: Quantitative & Verifiable Subjective Measures: Personal Standards & Opinions
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BBA Semester - III H.R.M & OB

Process of Performance Appraisal

Comparing Actual Performance vs. Standards
Note deviations Could be both positive & negative Reasons for the deviation Analysis of Strengths & Weaknesses

Initiating Corrective Action

Positive: Discussion & Improvement Plan Negative: Scolding & Warning
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BBA Semester - III H.R.M & OB

Essentials of a Good Appraisal

Reliability Job Related Standardisation Training to Appraisers Open Communication Employee Access to Results Clear Objectives
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BBA Semester - III H.R.M & OB

Contents
Concept Objectives of Performance Appraisal Process Methods- Uses and Limitations

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BBA Semester - III H.R.M & OB

Performance Appraisal Methods

Broadly of two types:
Traditional Methods (TM) Modern Methods (MM)

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TM: Unstructured Method

Appraiser describes his impression Unstructured manner Highly subjective in nature Useful at lower levels

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BBA Semester - III H.R.M & OB

TM: Straight Ranking Method

Ranking of all the employees Same unit, same work profile employees Ranking from best to poorest Highly subjective

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BBA Semester - III H.R.M & OB

TM: Paired Comparison Method

Employees of a group are compared with one another, one at a time Number of comparisons = (N(N-1))/N Each employee is compared with the other

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TM: Grading Method

Certain categories / grades are determined in advance Grades are based on a variety of parameters Actual performance is compared with parameters to allot a grade

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TM: Critical Incident Method

Performance rated on the basis of certain events that occurred during the performance of the job Incidents represent the outstanding / poor behaviour of the employee Under this technique the behaviour of the employee in all significant incidents is recorded in a book and reviewed at the end

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MM: Behaviorally Anchored Rating Scales (BARS)

Rating scales are created using the following approach
Identify Critical Incidents Select Performance Dimensions Retranslate Incidents Assign Scale Values

Rate the employee on the scale

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BBA Semester - III H.R.M & OB

MM: Management By Objectives (MBO)

What How approach? Substitutes good intentions with a process where everything is put in black & white Process
Define Role Define KRAs Indicators of Effectiveness Set SMART objectives Monitor

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BBA Semester - III H.R.M & OB

MM: 360 Appraisal

3 levels of employees rate the performance
Superior Peers Subordinates

Holistic view Rules out the bias of any one person

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