Ibrahim Sameer

Learning Objectives Describe the appraisal process

Define performance appraisal

Develop, Evaluate and administer at least four

performance appraisal tools

Importance of Performance Evaluation

Main causes of performance evaluation failure

Identify performance evaluation methods

Definition Performance appraisal can be define as “evaluate an employee’s current

and or past performance relative to his or her performance standards”

Performance appraisal include:

1. Setting work standard

2. Assessing the employee’s actual performance relative to those

standards

3. Providing feedback to the employee with the aim of motivating him

or her to eliminate performance deficiencies or to continue to

perform.

What is Performance Management The idea that appraisal should improve employee & company

performance is nothing new many mangers take the integrated nature

of that process – of setting goals, training employees, and then

appraising and then rewarding them. The whole integrated process is

known as performance management.

Performance management is a process that consolidate goal setting,

performance appraisal and development into single, common system,

the aim of which is to ensure that the employee’s performance is

supporting the company’s strategic aims.

Difference between PA & PM Difference between PA & PM

PA PM

Emphasis is on relative evaluation of individual Emphasis is on performance improvement of individuals and teams

Emphasis is on rating and evaluation Emphasis is on performance planning analysis appraisal and development

Performance rewarding and recognition is a critical components

Defining and setting performance standards is an integral part

Designed and monitored by HR department Designed by HR department but could be monitored by all line managers

Identify development needs at the end of appraisal year

Identify development needs at the beginning of the appraisal year

Linked to promotion, transfer and training & development

Linked to performance improvement and through them to other HR decisions as and when necessary

Characteristics of an effective PA System

A well developed evaluation process is one that has the support

of top administration within the organization and that is viewed

as fair and productive by all who participate in it.

Evaluation related to job description.

Clear criteria: individual has a right to know the criteria by which

they will be evaluated.

Employee must know who is responsible for evaluating their

performance.

Characteristics of an effective PA System (cont…)

The person evaluating be trained in the use of evaluation

tool and be skilled in conducting evaluation interview.

Well developed plans and well implemented plans for

monitoring the evaluation process.

PA is not done in isolation. It is linked to job analysis as

shown in the figure in the next slide.

Characteristics of an effective PA System (cont…)

Objectives of PA To effect promotion based on competence and

performance.

To confirm the services of probationary employees upon

their completing probationary period satisfactorily.

To assess the training & development needs of employees.

To decide upon a pay rise where regular pay scales have not

been fixed.

Objectives of PA (cont…) To let employees know where they stand insofar as their

performance is concerned and to assist them with

constructive criticism and guidance for the purpose of their

development.

To improve communication.

PA can be used to determine whether HR programmes

such as selection, training and transfer have been effective

or not.

Why appraise the performance of subordinates?

From a practical point of view, most employers still base

pay & promotional decision on the employee’s appraisal.

PA play an integral role in the employer’s PM process.

Appraisal lets the boss and subordinates develop a plan for

correcting any deficiencies and to reinforce the things the

subordinate does right.

Appraisal should serve a useful career planning purpose.

PA & Competitive Advantage PA helps an organization gain competitive edge in the following ways:

Improving performance: an effective appraisal system can contribute to

competitive advantage by improving employee job performance in two way.

Making correcting decision: appraisal is a critical input in making decisions

on such issues as pay raise, promotion, transfer, training, discharges and

completion of probationary periods. Right decision on each of these can

contribute to competitive strength of an organization.

Ensuring legal compliance: promotions made on factors other than

performance might land up a firm in a legal battle, thus diverting its focus on

non productive areas.

PA & Competitive Advantage (cont…)

Minimizing job dissatisfaction and turnover:

employees tend to become emotional and frustrated if

they perceive that the ratings they get are unfair and

inaccurate. Dissatisfaction in the job sets in and one of

the outcomes of job dissatisfaction is increase turnover.

Fair and accurate appraisal results in high motivation and

increase job satisfaction. Organization with satisfied

workers have an edge over its competitors

Steps in PA

Steps in PA (cont…) Step 1 Performance Objectives

Identification and setting quantifiable (measurable)

targets so that the individual employee has greater

clarity of the activities in which he needs to put in

more efforts. Generally performance objectives are set

jointly by the employee and his manager.

Steps in PA (cont…) Steps 2 Standards of Performance

Establish performance criteria based on job description and job

specification. The standards should be clear, concise and incorporate

all relevant factor.

Step 3 Performance Measures

The communication of standards performance to the employee by

the managers.

Step 4 Implementing Appraisal

Conducting of appraisal by the managers, including conducting of

interviews, scrutiny of records and reports etc.

Steps in PA (cont…) Steps 5 Human Performance

Finding out the actual performance of the employee against standards of

performance for finding out deviation. Employee performance is compared

with his past performance and that with other employees to find out where

the employee stands.

Step 6 Performance Review and Discussions

A formal discussion between the employee and manager on the employee’s

performance for a given period of time to identify the factors that have

positively or negatively affected his performance and to prepare action plans

to improve this performance using the performance equation.

Methods of PA 360 Degree PA

360 degree feedback/multi rate feedback is the assessment

of employees by supervisors, subordinates, peers and

customers. In this approach, performance feedback is

collected from the full circle of an employee’s daily

contacts:

Managers, Subordinates, Co-workers, Other department,

Customers, Suppliers and top management.

Methods of PA (cont…) Objectives of 360 degree PA

To gain more accurate reading of employee

performance.

To give relevant stakeholders input into performance

review process to have their say.

Advantages of 360 degree appraisal

For Employees

1. Can uncover hidden lights and blind spots.

2. Feedback coming from a number of different people is more likely to

be accepted.

3. Helps individuals gain a realistic view of how others perceive them.

4. Inspires people to take ownership of their own learning and

development.

5. Provides feedback in a quantifiable form on a structured range of

behavior.

Advantages of 360 degree appraisal (cont…)

For the team

1. It helps people understand how their behavior is influenced.

2. Supports team work by involving team members in the

development process.

3. Increases communication between team members

4. Higher levels of trust and better communication as individuals

identify the causes of breakdown.

5. Increased team effectiveness.

Advantages of 360 degree appraisal (cont…)

For the organization

1. Better career development planning and implementation for

employees.

2. Improves customer service by having customer contribute to

the evaluation process.

3. Reinforced corporate culture by linking surveys items to

organizational leadership competencies and company values.

4. Helps with training need analysis.

Behaviorally Anchored Rating Scale (BARS)

BARS is an evaluation where the actual job related behaviors are rates along a continuum. BARS evaluates performance in terms of critical employee behavior.

Rating Scales

Each behavior can rate at one of 7 scales as follows:

Extremely poor (1 point)

Poor (2 point)

Below Average (3 point)

Average (4 point)

Above Average (5 point)

Good (6 point)

Extremely Good (7 point)

Behaviorally Anchored Rating Scale (BARS) (cont…)

Advantages of BARS

This method are very useful and exactly.

Disadvantages of BARS

It is very difficult to develop this method because you

need to identify what is “good level” etc.

Graphic Rating Scales (GRS) This rating scales is a form on which the manager simply checks off the

employee’s level of performance.

Rating Scales

Rating scales can include 5 elements as follows:

1. Unsatisfactory

2. Fair

3. Satisfactory

4. Good

5. Outstanding

Graphic Rating Scales (GRS) (cont…) Advantages of GRS

1. GRS are less time consuming to develop.

2. They also allow for quantitative comparison.

Disadvantages of GRS

1. Different supervisor will use the same graphic scales in slightly different

ways.

2. One way to get around the ambiguity inherent in GRS, in which specific

work related behavior are assessed.

3. More validity comparing workers from a single supervisor than comparing

two workers who were rate by different supervisor.

Problems in PA PA are often criticized by both employees and organization.

The specific reasons for PA failure are as follows:

Lack of Objectivity

Some PA methods lack objectivity. In the rating scale

method, for Eg: commonly used factor such as attitude,

appearance and personality are difficult to measure and are

subject to personal opinion. Subjectivity will always exist to

a certain extent when people are responsible for appraisal.

Problems in PA (cont…) Personal Bias

Supervisory bias may occur when the appraiser is influenced by characteristics

such as age, gender, race or seniority of the employee. For Eg: a supervisor may

give a female bank teller a lower rating than her male colleague because he

thinks that a man will always do a better job than a women.

Trained appraisers

A common fault in appraisal system is that these supervisors do not received

enough training. The training should be ongoing so that the evaluations are

accurate and consistent.

Problems in PA (cont…) Halo effect

The halo effect occurs when a manger’s positive or negative

rating of a subordinate on one characteristics or criterion affects

the way he rates the other characteristics, including the overall

evaluation. For Eg: if the employee has successfully added value

to the organization through the development of higher skills, he

may be rated satisfactorily overall, even if he has not added value

in other areas that were agreed overall.

Questions for Discussion 1. What is performance appraisal?

2. Discuss the difference between performance

appraisal and performance management?

3. Discuss the benefits of appraisal?

4. What are the problems in performance appraisal?

5. What are the main types of performance appraisal?

Q & A