ITFT - HRM

PERFORMANCE APPRAISAL

PA is the method of evaluating

the behaviour of the employees

in the workplace, normally

including both quantitative

and qualitative aspect of the

job.

How the employee is

performing

How the employee can develop

What the superior can do to

make it happen

How the job is going

What is Performance Appraisal

Performance Appraisal :

Performance Appraisal (PA) refers to all those procedures that are used to evaluate the personality, performance, potential, of its group members

• Provide information about the performance ranks. Decision

regarding salary revision, confirmation, promotion and

demotions.

• Provide feedback about level of achievement and behaviour

of the subordinate.

• Provide information which helps to counsel the employees.

• Provide information to diagnose the deficiency of the

employees.

• Provide training and development needs of the employees.

WHY conduct a Performance Appraisal

• The performance review must occur atleast once in a year. Some companies review twice in a year.

• However, as a part of Performance Management, the performance review is a continuing, ongoing activity.

WHEN to conduct a Performance Appraisal

• Establish a more effective two way communication

• Set performance objectives

• Help improve current performance

• Assess past performance

• Provide feedback on performance

• Identify training & development needs

• Allocate rewards

• Identify staff with promotional possibilities

• Assist in career planning decisions

OBJECTIVES of Performance Appraisal

Characteristics

• It is a step by step process

• It examine the employee strengths and weaknesses

• Scientific and objective study

• Ongoing and continuous process

• Secure information for making correct decisions on employees

• The Appraisee

• The Appraiser

• HR Department

WHO are involved in Performance

Appraisal

Steps in performance appraisal

Establishing job standards

Designing an appraisal programme

Appraise performance

Performance interview

Use appraisal data For appropriate purpose

Process of PA

Setting performance

standards Taking corrective standards

Discussing results

Comparing standards

Measuring standards

Communicating standards

Performance Appraisal Methods

• Individual Evaluation Methods

• Confidential report • Essay evaluation • Critical incidents • Checklists • Graphic rating scale • Behaviorally anchored rating scale • MBO

•Group Appraisal • Ranking • Paired comparison • Forced distribution • Performance tests Field review

technique

Performance Appraisal Methods

Performance Appraisal Methods

Traditional

methods

1. Confidential report 2. Essay evaluation 3. Critical incidents 4. Checklists 5. Graphic rating scale 6. Straight Ranking 7. Paired comparison 8. Forced distribution 9. Grading system 10. Field review technique 11. Nominations 12. Work samples

Performance Appraisal Methods

Modern methods

1. Assessment centre 2. Human resource accounting – costs &

contribution 3. Behaviorally anchored rating scale 4. MBO 5. 360º performance apparaisal

Traditional Methods of Performance Appraisal.

• Graphic Rating Scales: This is the oldest and most widely method used for performance appraisal. The scales may specify five points, so a factor such as job knowledge might be rated 1 (poorly informed about work duties) to 5 (has complete mastery of all phases of the job).

Quantity of work: Volume of work under normal working conditions

Unsatisfactory

(1)

Fair (2)

Satisfactory

(3)

Good (4)

Out Standin

g (5)

Quality of work: Neatness, thoroughness and accuracy of work Knowledge of job

A clear understanding of the factors connected with the job

Attitude: Exhibits enthusiasm and cooperativeness on the job

Table: Typical Graphic Rating Scale

Employee Name................... Job title .................

Department ......................... Rate ...............

Data ..................................

Ranking Method

• This is one of the oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation.

Performance Points

Behavior

Extremely good

7 Can expect trainee to make valuable suggestions for increased sales and to have positive relationships with customers all over the country.

Good 6 Can expect to initiate creative ideas for improved sales.

Above average 5 Can expect to keep in touch with the customers throughout the year.

Average 4 Can manage, with difficulty, to deliver the goods in time.

Below average 3 Can expect to unload the trucks when asked by the supervisor.

Poor 2 Can expect to inform only a part of the customers.

Extremely poor 1 Can expect to take extended coffee breaks and roam around purposelessly.

Paired Comparison Method

• A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings.

Forced distribution method

• Forced ranking is a method of performance appraisal to rank employee but in order of forced distribution.

Checklist Method

• Another simple type of individual evaluation method is the checklist.

Is the employee really interested in the task assigned?

Yes/No

Is he respected by his colleagues (co-workers)

Yes/No

Does he give respect to his superiors?

Yes/No

Does he follow instructions properly?

Yes/No

Does he make mistakes frequently?

Yes/No

Critical Incidence Method

• Under this method, the manager prepares lists of statements of very effective and ineffective behavior of an employee. These critical incidents or events represent the outstanding or poor behavior of employees on the job .

• July 20 – Mr. Paul patiently attended to the major customers complaint. He is polite, prompt, enthusiastic in solving the customers’ problem.

On the other hand the bad critical incident may appear as under:

• September 28– Mr. Paul stayed 45 minutes over on his break during the busiest part of the day. He failed to answer the store manager’s call thrice.

Essay Method

• This method asked managers / supervisors to describe strengths and weaknesses of an employee’s behavior.

Confidential Report

It is mostly used in government organizations. It is a descriptive report prepared, generally at the end of every year, by the employee’s immediate superior. The report highlights the strengths and weaknesses of the subordinate.

Modern Methods

MBO

A process whereby the superior and subordinates of the organization jointly identify its common objectives, define each individual’s major areas of responsibility.

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.

PSYCHOLOGICAL APPRAISALS:

When psychologists are used for evaluations, they asses an individual’s potential. The appraisal consists of in-depth interviews, psychological tests, discussions with supervisors and a review of other evaluations.

Assessment Centre

• This not a technique of performance appraisal by itself. In fact, this is a system or organization where assessment of several individual is done by experts by using various techniques. These techniques used role playing, case studies etc.

360 DEGREE FEEDBACK

What is 360 DF?

360 Degree Feedback is a multi - rater

feedback system where an individual is

assessed by a number of assessors

including his boss, direct reports,

colleagues, internal customers and

external customers

Internal Customers

“Boss”

Peers

External Customers

Team Members

Self

Feedback collected from

Using a specially designed tool

Anonymously

What is 360 DF?

1. Halo/horn effect –

employee’s extreme

competence in one area

“shines” over all others.

Conversely, employee

does poorly in one area

and this overshadows all

areas.

2. Bias – own prejudices

{race, national origin,

gender, appearance, etc.}

influence the appraisal

3. Comparison Rating –

contrasting one employee

with another

Common Problems Associated with Conducting the Appraisal

3. Central Tendency – rate everyone as average

4. Recency Effect – focusing on recent

performance instead of entire year

5. Personal Prejudice – If the rater dislikes one

group or employees, he may rate them at the

lower end.

6. Favoritism – evaluating friends or those who

don’t make waves, etc. more favorably than

others

Common Problems Associated with

Conducting the Appraisal