TOOLS AND TECHNIQUES OF PERFORMANCE APPRAISAL

Md. Abdullah- Al- Masum

Performance Appraisal

“Performance Appraisal is the process of evaluating the performance of

employees, sharing that information with them and searching for ways to

improve their performance’’ --Newstrom

WHY?

Promotion Decision

Compensation Decision

Training Decision

Improve Performance

Process of Performance Appraisal

Establish the of Performance Standard

Communicating the standards

Measuring the actual performance

Compare the performance with standards

Discuss the appraisal with the employee

Initiation of action

✓ To compare any performance, standard is essential.

✓ The standard should be clear, easily understandable and in measurable

terms.

Process of Performance Appraisal

Establish the of Performance Standard

Communicating the standards

Measuring the actual performance

Compare the performance with standards

Discuss the appraisal with the employee

Initiation of action

✓ The standard should be clearly explained to the employees.

✓ This will help them to understand their roles and to know what exactly

is expected from them.

Process of Performance Appraisal

Establish the of Performance Standard

Communicating the standards

Measuring the actual performance

Compare the performance with standards

Discuss the appraisal with the employee

Initiation of action

✓ The most difficult part of the Performance appraisal process.

✓ This stage requires the careful selection of the appropriate techniques of measurement.

Process of Performance Appraisal

Establish the of Performance Standard

Communicating the standards

Measuring the actual performance

Compare the performance with standards

Discuss the appraisal with the employee

Initiation of action

✓ The actual performance is compared with the standard.

✓ The comparison tells the deviations in the performance of the

employees from the standards set.

STANDARD ACTUAL

Process of Performance Appraisal

Establish the of Performance Standard

Communicating the standards

Measuring the actual performance

Compare the performance with standards

Discuss the appraisal with the employee

Initiation of action

✓ The results are discussed with the aim of betterment.

✓ Conveying good news is considerably easier for both the

appraiser and the employee than conveying bad news.

Process of Performance Appraisal

Establish the of Performance Standard

Communicating the standards

Measuring the actual performance

Compare the performance with standards

Discuss the appraisal with the employee

Initiation of action

✓ After discussion, it may not be required to take any further action.

✓ In some cases, it may required to go for rewarding, training, punishing,

warning etc.

All the techniques can be divided into two categories:

Performance Appraisal Techniques

Traditional Method

• Checklist

• Comparative evaluation

• Graphic rating scale method

• Critical Incidents Method

• Behaviorally Anchored Rating Scale (BARS)

• Confidential Reports

• Essay Method

• Forced distribution method

Modern Method

• Assessment Centre Method

• Human Resource Accounting Method

• Management By Objectives (MBO)

• Psychological Appraisal Method

• 360 Degree Appraisal

• 720 Degree Appraisal

❑ Checklist is prepared by the HR manager

and is forwarded to the rater.

❑ The checklist may include list of questions

representing behavior and job performance

of employee.

❑ The rater has to answer them in just ‘YES’ or

‘NO’ form.

Checklist Method

Traditional Methods

❑ The performance of one employee is comparedwith that of another co-worker.

❑ Ranking and Paired Comparison are the usualcomparative forms used in this approach.

❑ In Ranking, employees at a once are ranked fromthe best to the worst according to theirperformance level.

❑ In Paired Comparison, the performance of eachemployee is compared with the other employee

Comparative evaluation

Traditional Methods

Graphics Rating Scale

Traditional Methods

❑ Employees are evaluated on the basis of

various job performance criterions

❑ Each criterion is categorically divided into

poor, fairly poor, fairly good, good and

excellent.

❑ Employee is given the rating based on his

performance against each criteria and then

the total score is computed accordingly.

“You need not be perfect all the time, rather in

critical time”

Manager prepares lists of statements of very

effective and ineffective behavior of an employee.

Periodically records critical incidents of the

workers behavior.

These recorded critical incidents are used in the

evaluation of the workers' performance.

Critical Incidents Method

Traditional Methods

❑ Combination of critical incident

and rating scale methods.

❑ The scale points are defined by

critical (effective or ineffective)

behaviors of the employee.

❑ Rater is asked to indicate which

behavioral point describes the

employee behavior the best.

Traditional Methods

Performan

ce

Behavior

Extremely

good

5

Can expect trainee to make valuable

suggestions for increased sales and to

have positive relationships with

customers all over the country.

Good

4

Can expect to keep in touch with the

customers throughout the year.

Average

3

Can manage, with difficulty, to deliver

the goods in time.

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.

Behaviorally Anchored Rating Scale

❑ Evaluate employee’s performance and take

necessary actions without giving any feedback.

❑ Employees have to directly face the

consequence (either positive or negative) of the

appraisal.

Confidential Reports

Traditional Methods

❑ Traditional and judgmental approach.

❑ A descriptive essay is written on

employee’s Performance.

❑ Essay describes in detail about the

strengths, weaknesses, potential, nature,

etc.

Essay Method

Traditional Methods

❑ An attempt to eliminate the flaws of the

raters.

❑ Raters are forced to divide his employees

evenly into certain categories.

❑ The categories can be poor, average, good

and excellent or percentile based like 10%

poor, 40% fairly good, 40% good and 10%

excellent.

Forced distribution method

Traditional Methods

Performance Appraisal Techniques

Modern Method

• Assessment Centre Method

• Human Resource Accounting Method

• Management By Objectives (MBO)

• Psychological Appraisal Method

• 360 Degree Appraisal

• 720 Degree Appraisal

❑ Test the individual in various social

situations by using a number of procedures

and assessors.

❑ Assess employee’s performance on the job-

related simulations.

❑ This method uses different techniques such

as business games role play and in-basket

exercises.

Assessment Centre Method

Modern Methods

❑ The method assesses the cost of employees

and their contribution to the company

❑ Organizations, who consider their human

capital as valuable assets, use this method to

find out the relative worth of their assets in

terms of money.

Human Resource Accounting Method

Modern Methods

The superior and the subordinates of anorganization together identify its commongoals

Firstly the organizational goals are definedbased on which individual goals are definedby the employees.

The performance of the employees is thenreviewed on the basis of achievements ofindividual goals.

Management By Objectives (MBO)

Modern Methods

To assess the employee’s potential for the

future performance instead of the past

performance, by a psychologist.

The psychologist conducts various

psychological tests, in-depth interviews.

Psychological Appraisal Method

Modern Methods

All the employees of the organization apprise on

employee.

Appraiser may include the peers, superiors,

colleagues and self.

360 Degree Appraisal

Modern Methods

It is the extended version of 360 degree appraisal system.

assessment is not only done by the stakeholders within the organization but

also by the groups outside the organizations including the customers,

suppliers, investors, etc.

720 Degree Appraisal

Modern Methods

Why Modern Methods?

Most of the earlier performance management methods depend onthe judgements of the raters, due to which sometimes theevaluation gets biased.

Therefore companies now a day’s use modern methods ofperformance appraisal rather than the traditional ones.

HOW TO ENSURE EFFECTIVE PA

1. Prepare for and schedule the appraisal in advance

2. Create a supportive environment to put employees at ease

3. Describe the purpose of the appraisal to employees

4. Give the opportunity to raise question about appraisal

5. Focus discussion on work behavior, not on employees

6. Support evaluation with specific example

7. Give both positive and negative feedback