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PerformanceAppraisals
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Contents
1. Understanding Performance Appraisal
2. Characteristics and Objectives of PA
3. Benefits to Company & Employees4. Performance Appraisal Design
5. Problems in PA
6. Performance Appraisal Process
7. Performance Appraisal Methods
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Performance Appraisal
Performance Appraisal (PA) refers
to all those procedures that are
used to evaluate the personality,performance, potential, of an
Organizations' Human Resources.
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The Questions?
Why do we measure performance?
What are the effective
performance appraisal systems?
How do we measure performance?
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Characteristics of
Performance Appraisals
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
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PA - Needs and Objectives
Provide feedback about employees
Provide database
Diagnose the S & W of individuals
Provide coaching, counseling, careerplanning to subordinates
Develop positive relation and reducegrievance
Facilitates research in personnelmanagement
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Appraisal Benefits - Company
Appraisals offer the company:
Documentation
Employee Development
Feedback
Legal protectionMotivation system
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Appraisal Benefits - Employees
Appraisals offer employees:
Direction
Feedback
Input
Motivation
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Why Appraisals Are Important ?
Recognize accomplishments
Guide progress
Improve performanceReview performance
Set goals
Identify problemsDiscuss career advancement
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Steps in performance appraisal
Establishing job standards
Designing an appraisal programme
Appraise performance
Performance interview
Use appraisal data
For appropriate purpose
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Process of Performance Appraisals
Setting
performance
standardsTaking corrective
measures
Discussingresults
Comparing
standards
Measuringstandards
Communicating
standards
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Issues in Appraisal Design Process
Appraisal Design?
Formal and informal
Whose performance?
Who are the raters?
What problems?
How to solve?
What to evaluate?
When to evaluate?
What methods?
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Performance Levels to evaluate?
(Philip Model)
Problemchildren
Planned
separation
Stars
Social
citizen
H
L H
L
Potential
Performance
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How PA contribute to Companys
competitive advantage?
Improving
performance
Making correctdecision
Ensuring legal
competenceMinimize
Dissatisfaction levels
Values and behavior
Competitive
advantage
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Problems in performance appraisal1. Errors In rating
Halo effects
Stereotyping Central tendency
Constant error
Personal bias Spill over effect
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Problems in performance appraisal
(Contd)2. Incompetence
3. Negative approach
4. Multiple objectives
5. Resistance
6. Lack of knowledge
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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
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Discrimination
Failure to communicate standards
Failure to give timely feedback
Failure to allow employees to correctperformance
Inconsistency in measuring performance
Failure to document performanceobjectively
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Appraisal Forms
Define performance expectations
Describe measurement tools
Use a rating system
Cover specific examples
Set measurable goals
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Document Performance
Make sure documentation is objective
Document performance of all employees
Provide complete and accurateinformation
Document performance on a regular
basis
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Set Goals.
Based on job requirements
Realistic
Measurable
Observable
Challenging
Prioritized
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Employees Inputs
Employees take an active role in:
Setting goalsDesigning action plans
Identifying strengths and weaknesses
Employees participate in the PA
meeting
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Preparing for Performance Appraisal
Preparation for the interview begins withcompleting the appraisal form.
The Appraiser should allow enough timeto complete the form carefully andthoughtfully.
The Appraiser should think about howthe employee is likely to react to the
appraisal and should plan how to handlethe employees reaction.
Also be ready with some ideas for how tocorrect problems noted in the appraisal.
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Preparation
Notify the employee ahead of the timeof the interview.
Arrange for a private place to hold
the interview.
Make arrangements to prevent
interruptions.
This is a very important event for
both the supervisor and the
employee--treat it as such.
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Guidelines for Conducting the Interview
Begin the interview session by an attempt to put theemployee at ease.
A refreshment and small talk may help break the ice.
Review the employees self-evaluation first, if there is one. Ask for reasons for the various ratings.
Then the supervisor describes his or her evaluation of theemployee.
Start with an overall impression, then explain the contents of the
appraisal forms. Most employees are waiting for the bad news, so it is probably
most effective to describe areas for improvement first.
Then describe the employees strengths.
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Start the Meeting
Start with totally out of the topic /subject.
Find out personal details / updates
Lay out agenda
Talk about colleagues, work etc.,
Encourage appraisee inputs Give good news first, always.
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During the MeetingReview performance
Based on previous goals
Noting strengths and accomplishments
Identifying areas for improvement
Set goals: Based on company goals
Focus on areas that need improvement
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End the Meeting
Encourage good performance
Lay out action plan for next review cycle
Communicate outcome of goals did notmeet
Confirm mutual understanding
Share the deficiencies, if any, in more
subtle way.
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Tips to have effective Review meetings
Focus on the overall performance, not therecent incidents.
Recall the whole year / periods
contributions, both positive and negative. Share positives - Always
Give objective examples
I
nvite response Listen actively
Create we mentality
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Continuous Feedback
Formal appraisals
Informal appraisals Open communication
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Recognize & Reward
Good Performance
Verbal
Public
Tangible
Monetary
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Identify Poor Performance
Act early
Take the right approach
Deal with employee reaction
Handle continued poor performance
Be careful while reviewing highlyemotional employees
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Discipline Poor Performance
Recognize problems, in detail.
Talk to the employees, at length. Help them to get over the problems, if
any.
Follow company policy in takingdiscipline actions, if needed.
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Key Points to Remember
You must conduct objective appraisals on ascheduled basis.
Appraisals tell employees how theyre doing andhow they can improve.
Appraisals help create a system of motivationand rewards based on performance.
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Performance
Appraisal
Meth
ods
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Performance Appraisal Meth
ods Individual Evaluation Methods
Confidential report
Essay evaluation
Critical incidents
Checklists
Graphic rating scale
Behaviorally anchored rating scale MBO
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Critical-Incident Appraisal
Critical-incident Appraisal: A performance appraisal inwhich the supervisor keeps a record of incidents that
show positive and negative ways the employee has acted;
the supervisor uses this record to assess the employees
performance.
To conduct a critical-incident appraisal, the supervisorkeeps a written record of incidents that show positive andnegative ways in which the employee has acted. The record should include dates, people involved, actions taken,
and any other details that are relevant.
At the time of the appraisal, the supervisor reviews the record toreach an overall evaluation of the employees behavior.
During the appraisal interview, the employee has a chance torespond to each of the incidents recorded.
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Critical Incident method
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 2E was happy to avoid work 1
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Checklist method
Simple checklist methodWeighted checklist method
Forced choice method
Simple 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 Y/N
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Weighted checklist method
Weightage Performance Rating(scale 1 to 5 )
1. Regularity 10%
2. Loyalty 10%3. Willing to help 20%
4. Quality of work 20%
5. Working relationships 40%
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Forced-Choice Approach
Forced-choice Approach: A performance appraisal that presents the
appraiser with sets of statements describing employee behavior; the
appraiser must choose which statement is most characteristic of the
employee and which is least characteristic.
This type of appraisal form gives the supervisor sets of statementsdescribing employee behavior.
For each set of statements, the supervisor must select the one
that is most and the one that is least characteristic of the
employee.
These questionnaires prevent the supervisor from saying only
positive things about employees. It is used when an organization
finds that supervisors have been rating an unbelievably high
proportion of employees as above average.
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Forced Choice Method
Criteria Rating
1.Regularity on the job
Always regularInform in advance for delay
Never regular
Remain absentNeither regular nor irregular
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Graphic Rating Scale Graphic Rating Scale: A performance appraisal that rates the degree to
which the employee has achieved various characteristics.
The graphic rating scale is the most common type of appraisal used.
Various characteristics such as job knowledge or punctuality are ratedby the degree of achievement.
The rate usually receives a score of 1 to 5,with 5 representingexcellent performance.
Some forms allow for additional comments.
The advantage of this type of appraisal is that it is relatively easy to use.
However, the ratings themselves are subjective.
What one supervisor considers excellent may seem just
average to someone else.
Also, many supervisors tend to rate everyone as being at least a
little bit above average.
Additional descriptive information is an attempt to overcome these
problems.
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Graphic Rating Scale
Employee name_________ Deptt_______
Raters name ___________ Date________
------------------------------------------------------------------------
Exclnt. Good Acceptable Fair Poor
5 4 3 2 1 _ 1. Dependability
2. Initiative
3. Overall output
4. Attendance
5. Attitude
6. Cooperation
Total score
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Behaviorally Anchored Rating Scales
Behaviorally Anchored Rating Scales: A performance appraisalin which the employee is rated on scales containing statementsdescribing performance in several areas.
This is a method of performance appraisal that is tailored to theorganization and positions within that organization.
Some organizations pay behavioral scientists or organizational
psychologists to create behaviorally anchored rating scales.
These scales rate employee performance in several areas.
The supervisor selects the statement that best describes how theemployee performs.
Each job title in the organization has a different set of rating statements.
The advantage of using this technique is that it is tailored to theorganizations objectives for employees.
It also tends to be less subjective than some other approaches.
However, developing the scales is time-consuming and therefore relativelyexpensive.
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BARS( Behaviorally Anchored Rating Scale)
Step 1. Identify critical incidents
Step 2. Select performance dimension
Step 3. Retranslate the incidents
Step 4. Assign scales to incidents
Step 5. Develop final instrument
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Management by Objectives (MBO)
In organizations where MBO is used to set
goals and objectives for employees, the
supervisor will use this approach for
performance appraisal also. The appraisal is based on whether or not the
employee has met his or her objectives.
The advantage is that employees know what to
expect.
The supervisor focuses on results rather than
more subjective criteria.
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MBO Process
Set organizational goals
Defining performance target
Performance review feedback
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Group Appraisal
Ranking
Paired comparison
Forced distribution
Performance tests Field review technique
Performance Appraisal Methods
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Ranking method
Employee Rank
A 2
B 1
C 3
D 5
E 4
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Forced Distribution Method
10% 20% 40% 20% 10%
poor Below
average
average good Excellent
No.
of
employees
Force distribution curve
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360* Appraisal Process 360-degree Feedback: Performance appraisal
that combines assessment from several sources.
Because the supervisor cannot know all of anemployees behaviors and their impact on others
in the organization, the supervisor may combinehis or her appraisal with self-assessments by theemployee or with appraisals by peers orsubordinates.
Combining several sources of appraisals is called 360-degreefeedback.
The self-assessment may be done before the interview.
Then the supervisor and employee can compare theemployees appraisal with his or her own evaluation.
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360* Appraisal Process
Performance subordinate peers superior customer
Dimension
Leadership ^ ^
Communication ^ ^
Interpersonal skills ^ ^
Decision making ^ ^ ^
Technical skills ^ ^ ^
Motivation ^ ^ ^
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Performance Appraisal
Guidelines forDifferent Levels
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For Senior Management
Return on capital employed
Contribution to community
development
Degree of upward communication
from middle-level executives
Degree of growth and expansion ofenterprise.
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for Middle Level Managers
Departmental performance
Coordination among employees
Degree of upward communication fromsupervisors
Degree of clarity about corporate goals
and policies
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For Junior Level Managers
Quality and quantity of output in a givenperiod
Labor cost per unit of output in a given
period Material cost per unit in a given period
Rate of absenteeism and turnover of
employees No of accidents in a given period
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Any Questions ???