Performance Appraisal

Index
About Performance appraisal
Definition Meaning Objectives

Process of Performance Appraisal Methods / Techniques of Performance Appraisal

Traditional Modern

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

employees performance of a job in terms of its requirements.

Objectives of Performance Appraisal

According to:
Employee concrete and tangible particulars about their work assessment of performance Organization measuring the efficiency maintaining organizational control.

Aims at:
Personal development work satisfaction involvement in the organization.

mutual goals of the employees & the organization. growth & development increase harmony & enhance effectiveness

Process
Setting performance standards

Taking corrective standards

Communicating standards

Discussing results

Measuring standards

Comparing standards

Methods of Performance Appraisal

Traditional Methods
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

Modern Methods
1. Assessment Center 2. Cost Accounting method 3. Behaviorally Anchored

Rating scales
4. 360 appraisal

Traditional methods
Paired comparison
This is a method of comparison

Graphic rating scales

In this method, an employees quality

where each employee is first

compared with the peers, one at a time, and when all the comparisons are done, the

and quantity of work is assessed in a

graphic scale indicating different degrees of a particular trait. The factors taken into consideration

employees are given the final

rankings.

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
0 5 10 15 20

No interest In work: consistent complainer

Careless: In-different Instructions

Interested in work: Accepts opinions & advice of others

10
Takes decisions promptly

Enthusiasti c about job & fellowworkers

Enthusiastic opinions & advice sought by others

Decisiveness
0
Slow to take decisions

5
Take decisions after careful consideration

15
Take decisions in consultation with others whose views he values

20
Take decisions without consultation

 Forced choice method

This method does not involve
discussion with supervisors. Here the rater is forced to choose the best and worst fit

The
of

checklists
rater
the

is

given
of

a
the The

checklist of the descriptions behaviour on employees job.

statements from a group of

statements. These statements are weighted to bias or scored in the largely advance assessor eliminated assess is

checklist contains a list of

statements on the basis of which the rater describes the on the job performance

employee. In this way, the

of the employees.

Forced choice method

Criteria 1.Regularity on the job Most Rating Least

Always regular Inform in advance for delay Never regular Remain absent

 Free essay method:

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 employees performance based on certain parameters.

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.

Critical Incident method

Ex: A fire, sudden breakdown, accident

Workers A B C D

Reaction Informed the supervisor immediately Become anxious on loss of output Tried to repair the machine Complained for poor maintenance

scale 5 4 3 2

Was happy to forced test

 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 employees 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.

Field review method

Performance Dimension Leadership Communication Interpersonal skills Decision making subordinate ^ ^ ^ ^ ^ ^ ^ ^ peers superior customer ^

Technical skills
Motivation

^
^

^
^

^
^

Ranking 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.

Modern methods
Assessment centre :
This typically involves the use of

Cost accounting method:

In this method the employees are

methods
events,

like
tests

social/informal
and exercises, given to a

judged

in

terms
The

of

cost
cost like

and
of their

contribution. incurred selection on

assignments

being

employees include all the expenses them

group of employees to assess their

competencies
assessment interpersonal capabilities,

.The
centres skills,

major
are

compensation,
costs,

recruitment
induction the

and
and total

competencies that are judged in intellectual career

training costs etc whereas their contribution includes

capability, planning and organizing

motivation, orientation etc.

value added (in monetary terms).

 BARS:
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

360 Appraisal:
This is also known as 'multirater 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 qualities as good or bad (for e.g.. the qualities like inter-personal relationships, adaptability and reliability, job knowledge etc). In this method, an employees actual job behavior is judged against the desired behavior by recording and comparing the behavior with BARS.

Performance

Behavioral Anchored Rating Scales

Points Behavior

Extremely good

Can expect trainee to make valuable suggestions for increased sales and to have positive relationships with customers all over the country. Can expect to initiate creative ideas for improved sales. Can expect to keep in touch with the customers throughout the year. Can manage, with difficulty, to deliver the goods in time. Can expect to unload the trucks when asked by the supervisor.

Good Above average Average Below average

6 5 4 3

Poor

Can expect to inform only a part of the customers.

Can expect to take extended coffee breaks & roam around purposelessly.

Extremely poor 1

Group appraisal method

360 degree performance appraisal

Examples of 360 degree performance appraisal method

These companies are using 360 Degree Performance Appraisal Method Wipro Infosys Reliance Industries Maruti Udyog HCL Technologies Wyeth Consumer Health (WCH)

Advantages
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.

Disadvantages
If not done appropriately, can be a negative experience.

very time consuming, especially for a manager

subject to rater errors & biases.

If not done right can be a complete waste of time. Can be stressful for all involved