Performance Appraisal

Presented by:Nisha Goyal

Rakesh Singh

Contents
Introduction
Purpose of Performance Appraisal
prerequisites for conducting performance

Appraisal
Basic Steps in a Performance Appraisal
Performance Appraisal and Competitive
Advantage
Method of Appraisal
Challenges of Performance Appraisal
Performance Appraisal in TCS

Introduction
Performance Appraisal is the systematic

evaluation of the individual with respect to his

or her performance on the job and his or her
potential for development.
Strategic Performance Appraisal- employees
evaluated by individual goals that are linked
to overall organizational goals and objectives

Purpose of Performance
Appraisal
To effect promotions based on competence

and performance.
To confirm the services of probationary
employees upon their completing the
probationary period
satisfactorily.
To assess the training and development needs
of employees.
To decide upon a pay raise where (as in the
unorganized sector) regular pay scales have
not been fixed.

Contd..
To let the employees know where they stand .
To improve communication.
Finally, performance appraisal can be used to

determine whether HR programmes such a

selection, training, and transfers have been
effective or not
Broadly, performance appraisal serves four
objectivesdevelopmental uses,
administrative uses/decisions,
organizational maintenance/objectives, and
documentation purposes

Prerequisites for Effective & Successful performance Appraisal

Documentation
Standards / Goals
Practical and simple format
Evaluation technique
Communication
Feedback
Personal Bias

Strategic Performance Appraisal Trends

Calibration meetings- managers and

supervisors discuss performance ratings and

come to a consensus on individual ratings
Reinforces perceived importance of process
Improves differentiation factor
Workforce performance and learning goals
identified, based on organizational objectives
Day-to-Day feedback

Contd
Manager as a coach instead of appraiser
Allows for future career planning and

organizational goal linkage

Changing the employee perception of
performance management
Help employees set appropriate goals

Example of Traditional PA
A manager performs the appraisal annually,

based on individual productivity stats

The appraiser fills out a form which states the
employees productivity and some subjective
comments about behavior
The appraisals main purpose is to determine
raises and promotions

Examples of Strategic Performance

Appraisal
An organizations core values include continuous

improvement of customer service. A goal is set

during the PA process that involves reducing
customer service complaints by 15% in the
coming year. This is linked to organizational
values and is measurable.
The manager establishes bi-monthly feedback

sessions, where employees and managers

have a brief one-on-one conversation
regarding current performance goals and
standards related to the status of the
organization at that specific point in time.

How are Organizations Using

Strategic PA?
Employees set their own goals
The core competencies are all tied into one of

the five pillars of excellence

Change in focus from past performance to

forward-focus and goal attainment

Employees and managers now have an
ongoing performance partnership
Expectations adjusted and based on global
corporate demands

Basic Steps in a Performance Appraisal

Conduct ongoing observations and

measurements to track performance

Exchange ongoing feedback about
performance
Conduct a performance appraisal (sometimes
called performance review)
If performance meets desired performance
standards, reward for performance

Performance Appraisal and Competitive Advantage

Strategy and
Behavior

Improving
Performance

Making correct
decisions

Competitive
Advantage

Values and
Behavior

Ensuring Legal
Compliance
Minimizing
dissatisfaction and
turnover

Method of Appraisal
Performanc
e Appraisal
Traditiona
l

Modern

Essay Appraisal
Method
Straight
Ranking Method
Paired
Comparison
Critical Incident
Method
Field Review
Checklist
Method
Graphic Rating
Scale
Forced
Distribution

Management
By Objective
360 Degree
Appraisal
Assessment
Center
Behaviorally
Anchored
Rating Scale
Human
Resource
Accounting

Management By Objectives
Application of MBO in the field of performance

appraisal is a recent thinking.

The essence of MBO is participative goal
setting, choosing course of actions and decision
making. An important part of the MBO is the
measurement and the comparison of the
employees actual performance with the
standards set. Ideally, when employees
themselves have been involved with the goal
setting and the choosing the course of action to
be followed by them, they are more likely to
fulfill their responsibilities.

MBO Process
Four Steps in the MBO Process
The first step is to establish the goals each
subordinate is to attain.
The second step involves setting the performance
standard for the subordinates in a previously
arranged time period.
In the third step, the actual level of goal attainment
is compared with the goals agreed upon.
The final step involves establishing new goals and,
possibly new strategies for goals not previously
attained.

360 Degree Appraisal

360
degree
feedbac
k

The
combinatio
n of peer,
subordinate
, and
self-review

360 Degree Appraisal Process

Sanctioned from the top
Involve employees / managers in developing

appraisal criteria / process

Train employees how to give feedback
Inform employees of the process
Pilot test in part of organization
Reinforce goals of 360 appraisal
Revise process when necessary

Assesment Center
An assessment centre will have a

standardized process for evaluation of

behavior using multiple inputs.
Assessment centers serve three main human
resources functions:
Selection and promotion
Diagnosis
Development

A Typical Assessment Center

Candidates participate in a series of exercises that
simulate
on- the job situations
Trained assessors carefully observe and document the
behaviors
displayed by the participants. Each assessor observes
each participant
at least
once write evaluation reports,
Assessors
individually
documenting their observations of each participant's
performance
Assessors integrate the data through a consensus
discussion process, led by the center administrator,
who documents the ratings and decisions
Each participant receives objective performance
information from the administrator or one of the
assessors

BARs
Behaviorally Anchored Rating Scales

(BARS) are scales used to rate performance.

BARS are normally presented vertically with
scale points ranging from five to nine.
Developing a BARS typically requires five steps:
1. Generate critical incidents
2. Develop performance dimensions
3. Reallocate incidents
4. Scale the incidents
5. Develop a final instrument

Ratings Example: BARS

Indicate the appropriate level of performance on each factor:
Quantity of work

Volume low &

erratic
Quality of work

Satisfactory steady
volume

Volume above
expectations

Results always accurate;

Results accurate andResults generally
model work
thorough
inaccurate and not
Judgment
thorough
Systematic,
analytical,
Good with complex
problems

Practical
judgment,
solves problems,
difficulty with
assessing relative
value of factors

Does not always

show good judgment;
problem analysis not
always adequate

720 degree Appraisal

In 720 degree appraisal, raters include-

Customers
Suppliers
Stakeholders
Family
This gives a pre and a post intervention
results. The pre-intervention results set
the baseline.

Human Resource Accounting

Human Resource Accounting is a method to

measure the effectiveness of personnel

management activities and the use of people
in an organization.
In this method the Performance appraisal of
the employees is judged in terms of cost and
contribution of the employees.

Challenges of Performance Appraisal

Appraiser Discomfort
Lack of Objectivity
Hallo/Horn effect
Leniency/Strictness
Central Tendency
Personal Bias
Manipulating the evaluation

Performance Appraisal Criteria at TCS

A poor performer is not always a poor

performer for life, says S Padmanabhan,
executive vice president, global human
resources, Tata Consultancy Services (TCS).
TCS conducts two appraisals:
At the end of the year
At the end of a project

Contd..
Appraisals are based on Balanced Scorecard,

which tracks the achievement of employees

on the basis of targets at four levels
financial
customer
internal
learning and growth
Based on their individual achievements,
employees are rated on a scale of one to five

Contd.
To avoid that, TCS shuffles its employees

between projects every 18 months or so.

Performance drops if motivation drops
TCS's performance appraisal system is
supported by an online system called the
Human Resource Management System- an
Oracle Developer 2000 based tool.