•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
