•Objectives•Objectives

About Performance appraisal

•Meaning •Meaning

•Definition•Definition

Process of Performance Appraisal

•Modern•Modern

Methods / Techniques of Performance Appraisal

•Traditional•Traditional

Index

Advantages of Performance Appraisal

Disadvantages of Performance Appraisal

Definitions

According to Newstrom, “It is the process of evaluating the

performance of employees, sharing that information with them and

searching for ways to improve their performance’’.

Meaning

Performance appraisal is the step where the management finds

out how effective it has been at hiring and placing employees .

A “Performance appraisal” is a process of evaluating an

employee’s performance of a job in terms of its requirements.

Objectives of Performance Appraisal

Employee Organization

measuring the efficiencymaintaining

organizational control.

concrete and tangible

particulars about their

workassessment of

performance

mutual goals of the

employees & the organization.growth & developmentincrease harmony &

enhance effectiveness

Personal development work satisfaction involvement in the organization.

According to:

Aims at:

Setting performance

standardsTaking correctivestandards

Discussingresults

Comparing standards

Measuringstandards

Communicatingstandards

Process

1. Paired comparison

2. Graphic Rating scales

3. Forced choice Method

4. Checklists method

5. Free essay method

6. Critical Incidents

7. Field Review Method

8. Confidential Report

9. Ranking method

1. Assessment Center

2. Cost Accounting

method

3. Behaviorally Anchored

Rating scales

4. 360° appraisal

Traditional Methods Modern Methods

Methods of Performance Appraisal

Traditional methods

• Paired comparison This is a method of comparison

where each employee is first

compared with the peers, one at a

time, and when all the

comparisons are done, the

employees are given the final

rankings.

• Graphic rating scales In this method, an employee’s

quality and quantity of work is

assessed in a graphic scale

indicating different degrees of a

particular trait. The factors taken into

consideration include both the

personal characteristics and

characteristics related to the on-the-

job performance of the employees.

For example a trait like Job

Knowledge may be judged on the

range of average, above average,

outstanding or unsatisfactory.

Graphic or Linear Rating Scales Attitude

No interestIn work: consistentcomplainer

No interestIn work: consistentcomplainer

Careless: In-differentInstructions

Careless: In-differentInstructions

Interested in work: Accepts opinions & advice of others

Interested in work: Accepts opinions & advice of others

Enthusiastic about job & fellow-workers

Enthusiastic about job & fellow-workers

Enthusiastic opinions & advice sought by others

Enthusiastic opinions & advice sought by others

Decisiveness

Take decisions in consultation with others whose views he values

Take decisions in consultation with others whose views he values

Slow to take decisions

Slow to take decisions

Take decisions after careful consideration

Take decisions after careful consideration

Takes decisions promptly

Takes decisions promptly

Take decisions without consultation

Take decisions without consultation

0 5 10 15 20

0 5 10 15 20

This method does not involve

discussion with supervisors.

Here the rater is forced to

choose the best and worst fit

statements from a group of

statements. These

statements are weighted or

scored in advance to assess

the employee. In this way,

the assessor bias is largely

eliminated

The rater is given a

checklist of the

descriptions of the

behaviour of the

employees on job. The

checklist contains a list of

statements on the basis of

which the rater describes

the on the job performance

of the employees.

• Forced choice method • checklists

Criteria Rating

1.Regularity on the job Most Least

Forced choice method

•Always regular•Inform in advance for delay•Never regular•Remain absent

The rater writes a brief essay

providing an assessment of the

strengths, weaknesses and

potential of the subject. In order

to do so objectively, it is

necessary that the rater knows

the subject well and should have

interacted with them. This

description is the assessment of

the employee’s performance

based on certain parameters.

• Free essay method: • Critical incidents:

In this method of performance

appraisal, the evaluator rates the

employee on the basis of critical

events and how the employee

behaved during those incidents. It

includes both negative and

positive points. The drawback of

this method is that the supervisor

has to note down the critical

incidents and the employee

behaviour as and when they

occur.

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 2

E Was happy to forced test 1

Critical Incident method

• Field review method:

In this method, a senior member

of the HR department or a

training officer discusses and

interviews the supervisors to

evaluate and rate their respective

subordinates. It is a very time

consuming method.

• Confidential report:

It is mostly used in government

organizations. A descriptive

report prepared by the

employee’s immediate superior.

The report highlights the

strengths and weaknesses of the

subordinate. The impressions of

the superior about the

subordinate are merely recorded

and kept confidential without

revealing the facts.

Performance subordinate peers superior customerDimension

Leadership ^ ^

Communication ^ ^

Interpersonal skills ^ ^

Decision making ^ ^ ^

Technical skills ^ ^ ^

Motivation ^ ^ ^

Field review 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.

Ranking method:

Modern methods

• Assessment centre : • Cost accounting method: This typically involves the use of

methods like social/informal

events, tests and exercises,

assignments being given to a

group of employees to assess

their competencies .The major

competencies that are judged in

assessment centres are

interpersonal skills, intellectual

capability, planning and

organizing capabilities,

motivation, career orientation etc.

In this method the employees are

judged in terms of cost and

contribution. The cost of

employees include all the

expenses incurred on them like

their compensation, recruitment

and selection costs, induction and

training costs etc whereas their

contribution includes the total

value added (in monetary terms).

• BARS: • 360º Appraisal: Behaviorally Anchored Rating Scales (BARS)

is a relatively new technique which

combines the graphic rating scale and

critical incidents method. It consists of

predetermined critical areas of job

performance or sets of behavioral

statements describing important job

performance qualities as good or bad (for

e.g.. the qualities like inter-personal

relationships, adaptability and reliability, job

knowledge etc). In this method, an

employee’s actual job behavior is judged

against the desired behavior by recording

and comparing the behavior with BARS.

This is also known as 'multi-

rater feedback', the most

comprehensive appraisal

where the feedback about

the employees’

performance comes from all

the sources that come in

contact with the employee

on his job.

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 & roam around purposelessly.

Behavioral Anchored Rating Scales

Group appraisal method

360 degree performance appraisal

These companies are using 360 Degree Performance Appraisal Method

Examples of 360 degree performance appraisal method

WiproInfosysReliance Industries

Maruti UdyogHCL TechnologiesWyeth Consumer Health (WCH)

Provides a record of performance over a period of time.

Provides an opportunity for a manager to meet & discuss performance.

Provides the employee with feedback about their performance.

Provides an opportunity for an employee to discuss issues and to clarify expectations .

Motivates the employees by providing good rewards and compensation based on their performance.

Advantages

Disadvantages