Performance appraisal

PERFORMANCE APPRAISAL

Patriana Z P. Benliro

What is performance?

Performance Its Determinants & Obstacles

• Performance- refers to the effective and efficient accomplishment of objectives.

• It may be stated in terms of levels: excellent

outstandinggood poor

Performance Its Determinants & Obstacles• It is the result of the efforts expended by

the employee and which is modified by his abilities and his perception of his/her role.

• Abilities eg. Language facility, finger dexterity, etc.

• Role perceptions constitute the directions in which the employee believes he should exert his effort in doing his job.

Performance Its Determinants & Obstacles• Poor performance may be the result of

any or all of the following:

Employee• Inadequate effort expended on the job;• Lack of proficiency in doing the job• Wrong role perception.

Performance Its Determinants & ObstaclesEnvironmental Factors• Conflicting demands on the employee’s

time• Inappropriate work facilities &

equipment• Restrictive policies that affect the job• Lack of cooperation from co-employees• Poor supervision

Performance Its Determinants & Obstacles• Poor performance may be the result of any

or all of the following:

Environmental Factors• Inappropriate temperature in the workplace• Poor lighting• Noisy surrounding• Improper shifting of the employee• Unsafe premises

Performance Its Determinants & Obstacles

Effort

Obstacles

Performance

Motivation

Role Perception

Abilities

Figure 1. Determinants & Obstacles of Performance

What is performance

appraisal?

What is Performance Appraisal?It is the process of evaluating individual job

performance as a basis for making objective personnel decisions.

It is alternately referred to as• Employee rating• Employee evaluation• Performance review• Performance evaluation• Results appraisal

Importance of Performance Appraisal

• One reason why employees tend to maintain the desired behavior is if they knew that their performance is monitored and appraised.

Performance Its Determinants & Obstacles

Individual Goals

Organizational Goals

Performance

Performance Evaluation

Process

Behavior

Figure 2. Behavior And Performance Appraisal

Uses of Performance Appraisal

• The information generated from Performance Appraisal is useful inputs in making decisions involving: – Compensation -financial reward– Placement- decisions concerning promotion,

demotion, discharge– Training and Development- potentials and

weakness of employees are needed for identifying training & development needs.

Formal Performance Appraisal•Performance Appraisal is formal if it uses a

systematic appraisal. Usually characterized by the following:•Managers & subordinates share understanding

about what has to be accomplished.• Performance is measured using some techniques.• Assessment of employee performance is done on

a regular basis such as every six months or every year.

•During the assessment proceedings, the employee is well aware that his performance is being assessed.

Informal Performance Appraisal• Informal appraisal is done

whenever the supervisor feels the need for it.

• The assessment is usually made during conversations between superior and the subordinate or on the spot examination of the subordinate’s output.

What are the processes in performance

appraisal?

Process of Appraisal• Establishment of performance standards.• Joint superior-subordinate setting of

measurable goals.• Measurement of performance.• Compare performance with standards.• Discuss result appraisal with employee.• When necessary, corrective action is

initiated.

Process of AppraisalEstablish

performance standards

Joint superior-subordinate setting of

goals

Measurement of actual performance

Compare performance with

standards

Relay result to employee

Corrective action initiated when

necessary

What are the methods of performance

appraisal?

Methods of Appraisal• Work standards approach• Critical-incident appraisal• Checklist• Essay appraisal• Graphic rating scale• Behaviorally anchored rating scale• Ranking methods• Forced-choice rating• Goal-setting or management by objectives (MBO)

Methods of Appraisal

• Work standards approachInvolves setting a standard level of

output and then comparing every employee’s performance with the standard.

Disadvantage: There is difficulty in comparing standards for the different categories of job.

Methods of Appraisal• Critical-incident appraisal

The evaluator keeps a record of desirable and desirable incidents of each employee.

Disadvantages: -Recording the incidents covering all employees is time consuming.-There is much difficulty quantifying critical incidents.

Methods of Appraisal• Checklist

Item Yes No

1. Does the person scan records to determine accounts due for collection everyday?

/

2. Does the person make a routine check-up of equipment under his care?

/

3. When a customer is unable to settle an amount due, does the person make a follow-up?

/

4. Does the person make a report right after field collection?

/

5. Does the person volunteer to help other employees?

/

Methods of Appraisal• Essay Appraisal

The appraiser writes a narrative about the person being appraised. The narrative describes a person’s strengths, weaknesses, past performance, potential, etc.

Disadvantages: -Writing abilities of appraisers differ.-Difficult to compare.-Difficult to quantify

Methods of Appraisal• Graphic Rating Scale

Uses identified performance factors. Eg. Quantity, quality of work, job knowledge, dependability, attendance, loyalty, etc. Rating scales are developed making it easier to assess performance.

Disadvantages: -It does not provide the depth of information other methods do.

Methods of Appraisal• Behaviorally-Anchored Rating Scale

Scale Values Attitude Toward Customers & Prospects

1-Unacceptable The salesclerk should be expected to ignore persons who make inquiries.

2-Very Poor The SC show little interest in convincing prospect buyers.

3-Poor The SC listen to suggestions and complaints from customers.

4-Below Average The SC relay suggestions and complaints of customers.

5-Average The SC require some help in knowing the right approach to customers.

6-Good The SC apply various procedures designed to make customers feel free to communicate

7-Very good The SC make customers feel that they are important to the company.

8-Excellent The SC regard customer an important link between them & the company.

Methods of Appraisal• Ranking Method1. Alternation

From the list of employees to be evaluated, the evaluator prepares another list where the individual names are entered and arranged according to their value or importance.

The method is useful if the list is short but may encounter problems if the list is too long.

1. Paired Comparisons2. Forced-Distribution

Methods of Appraisal• Ranking Method2. Paired Comparisons

The name of the employee is paired with another and the evaluator determines who is better employee.

Paired Comparison Results_X _Gina vs. Anna ___ ___Anna vs. Donna______Gina vs.Juana___ X_Juana vs Dina _______Gina vs Donna___ ___Juana vs Diana___ Note: X mark indicates better employee.

Methods of Appraisal• Ranking Method2. Paired Comparisons

Name of Employee No. of times judged as better employee

Rank

Gina 5 1

Anna 4 2

Juana 3 3

Dina 2 4

Donna 1 5

Diana 0 6

Methods of Appraisal• Ranking Method

3. Forced-Distribution

The levels of performance Percentage

Does not meet expected results 15%

Meets expected results 70%

Exceeds expected results 15%

Methods of Appraisal• Forced-Choice Rating

Sales supervisor evaluating the performance of a sales clerk:

____ 1. is able to hold the interest of prospects ____ 2. performs product demonstrations with

confidence ____ 3. provides accurate information to

prospects ____ 4. prepares accurate sales report ____ 5. thinks generally in terms of items sold.

The rater must choose between two or more specific statements about an employees work behavior

Goal Setting or MBO

MBO Steps1.The employee and his superior jointly set

goals.2.The employee tries to meet the goals.3.Performance is evaluated against the goals.4.The employee and superior jointly set new

goals for the next time period.

Goal Setting or MBO

Management By-Objectives (MBO) Prerequisites:

1.The use of the participative style of management.

2.Pinpointing which employee is responsible for which results.

3.Providing performance feedback to concerned employees.

Who are the sources of performance

appraisal?

Sources of Performance Information

• Supervisors• Peers• Subordinates• Self• Customers

What are the errors of performance

appraisal?

Errors in Performance Appraisal• Halo Error

Result of evaluation of one trait influences the evaluator in the assessment of other traits.

• Single CriterionSeveral tasks are evaluated on the basis of a

single criterion.• Leniency Error

Evaluators use his or her own value system in appraising the performance of employees.

Errors in Performance Appraisal• Central Tendency Error

All employees are rated within a narrow range as if the performances of all employees are equal or almost equal.

Performance No. of employees rated

Excellent 0

Above Average 10

Average 1, 246

Below Average 9

Poor 0

Errors in Performance Appraisal• Recency Problem

Recent performance is given greater weight than earlier performance.

Primacy Error/ProblemEarly performance is considered

more important than later performance.

How do we overcome errors in performance

Appraisal?

Overcoming Errors in Performance Appraisal

• Using multiple criteria.• Emphasizing behaviors rather than traits.• Documenting performance behavior.• Using multiple evaluators.• Evaluating selectively.• Training evaluators.

Summary• Performance Appraisal is the process of

evaluating the job performance of each employee or manager.

• Performance evaluation outputs are inputs of decision-making, especially on matters relation to promotion, transfer and retention of employees.

• Appraisal is formal if it uses a systematic appraisal system. It is informal if it is done anytime the supervisor fells there is a need for it.

Summary• The steps in performance appraisal consist

of 1.)establishing performance standards, 2.)joint superior-subordinate setting of measurable goals, 3. measuring performance, 4. comparing performance with standards, 5. discussing results of appraisal with the employee and 6. initiating corrective action when necessary.

Summary• Various methods of appraising consist of work-

standards approach, critical incident appraisal, checklist, essay appraisal, graphic rating scale, behaviorally anchored rating scale, ranking method, force-d choice rating and goal setting or management by objectives.

• Sources of PA are supervisors, peers, subordinates, self and customers.

Summary• Appraisal Errors consist of halo error, single

criterion, leniency error, central tendency error and recency problem.

• Overcoming errors in PA are using multiple criteria, emphasizing behavior rather than traits, documenting performance behaviors, using multiple evaluators, evaluating selectively and training evaluators.