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PerformanceAppraisals

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Contents

1. Understanding Performance Appraisal

2. Characteristics and Objectives of PA

3. Benefits to Company & Employees4. Performance Appraisal Design

5. Problems in PA

6. Performance Appraisal Process

7. Performance Appraisal Methods

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Performance Appraisal

Performance Appraisal (PA) refers

to all those procedures that are

used to evaluate the personality,performance, potential, of an

Organizations' Human Resources.

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The Questions?

Why do we measure performance?

What are the effective

performance appraisal systems?

How do we measure performance?

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Characteristics of

Performance Appraisals

It is a step by step process

It examine the employee strengths and

weaknesses Scientific and objective study

Ongoing and continuous process

Secure information for making correct

decisions on employees

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PA - Needs and Objectives

Provide feedback about employees

Provide database

Diagnose the S & W of individuals

Provide coaching, counseling, careerplanning to subordinates

Develop positive relation and reducegrievance

Facilitates research in personnelmanagement

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Appraisal Benefits - Company

Appraisals offer the company:

Documentation

Employee Development

Feedback

Legal protectionMotivation system

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Appraisal Benefits - Employees

Appraisals offer employees:

Direction

Feedback

Input

Motivation

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Why Appraisals Are Important ?

Recognize accomplishments

Guide progress

Improve performanceReview performance

Set goals

Identify problemsDiscuss career advancement

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Steps in performance appraisal

Establishing job standards

Designing an appraisal programme

Appraise performance

Performance interview

Use appraisal data

For appropriate purpose

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Process of Performance Appraisals

Setting

performance

standardsTaking corrective

measures

Discussingresults

Comparing

standards

Measuringstandards

Communicating

standards

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Issues in Appraisal Design Process

Appraisal Design?

Formal and informal

Whose performance?

Who are the raters?

What problems?

How to solve?

What to evaluate?

When to evaluate?

What methods?

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Performance Levels to evaluate?

(Philip Model)

Problemchildren

Planned

separation

Stars

Social

citizen

H

L H

L

Potential

Performance

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How PA contribute to Companys

competitive advantage?

Improving

performance

Making correctdecision

Ensuring legal

competenceMinimize

Dissatisfaction levels

Values and behavior

Competitive

advantage

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Problems in performance appraisal1. Errors In rating

Halo effects

Stereotyping Central tendency

Constant error

Personal bias Spill over effect

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Problems in performance appraisal

(Contd)2. Incompetence

3. Negative approach

4. Multiple objectives

5. Resistance

6. Lack of knowledge

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Essentials of an effective appraisal system

Mutual trust

Clear objectives

Standardizations

Training Job relatedness

Documentation

Feedback and participation

Individual differences Post appraisal review

Review and appeal

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Discrimination

Failure to communicate standards

Failure to give timely feedback

Failure to allow employees to correctperformance

Inconsistency in measuring performance

Failure to document performanceobjectively

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Appraisal Forms

Define performance expectations

Describe measurement tools

Use a rating system

Cover specific examples

Set measurable goals

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Document Performance

Make sure documentation is objective

Document performance of all employees

Provide complete and accurateinformation

Document performance on a regular

basis

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Set Goals.

Based on job requirements

Realistic

Measurable

Observable

Challenging

Prioritized

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Employees Inputs

Employees take an active role in:

Setting goalsDesigning action plans

Identifying strengths and weaknesses

Employees participate in the PA

meeting

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Preparing for Performance Appraisal

Preparation for the interview begins withcompleting the appraisal form.

The Appraiser should allow enough timeto complete the form carefully andthoughtfully.

The Appraiser should think about howthe employee is likely to react to the

appraisal and should plan how to handlethe employees reaction.

Also be ready with some ideas for how tocorrect problems noted in the appraisal.

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Preparation

Notify the employee ahead of the timeof the interview.

Arrange for a private place to hold

the interview.

Make arrangements to prevent

interruptions.

This is a very important event for

both the supervisor and the

employee--treat it as such.

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Guidelines for Conducting the Interview

Begin the interview session by an attempt to put theemployee at ease.

A refreshment and small talk may help break the ice.

Review the employees self-evaluation first, if there is one. Ask for reasons for the various ratings.

Then the supervisor describes his or her evaluation of theemployee.

Start with an overall impression, then explain the contents of the

appraisal forms. Most employees are waiting for the bad news, so it is probably

most effective to describe areas for improvement first.

Then describe the employees strengths.

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Start the Meeting

Start with totally out of the topic /subject.

Find out personal details / updates

Lay out agenda

Talk about colleagues, work etc.,

Encourage appraisee inputs Give good news first, always.

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During the MeetingReview performance

Based on previous goals

Noting strengths and accomplishments

Identifying areas for improvement

Set goals: Based on company goals

Focus on areas that need improvement

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End the Meeting

Encourage good performance

Lay out action plan for next review cycle

Communicate outcome of goals did notmeet

Confirm mutual understanding

Share the deficiencies, if any, in more

subtle way.

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Tips to have effective Review meetings

Focus on the overall performance, not therecent incidents.

Recall the whole year / periods

contributions, both positive and negative. Share positives - Always

Give objective examples

I

nvite response Listen actively

Create we mentality

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Continuous Feedback

Formal appraisals

Informal appraisals Open communication

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Recognize & Reward

Good Performance

Verbal

Public

Tangible

Monetary

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Identify Poor Performance

Act early

Take the right approach

Deal with employee reaction

Handle continued poor performance

Be careful while reviewing highlyemotional employees

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Discipline Poor Performance

Recognize problems, in detail.

Talk to the employees, at length. Help them to get over the problems, if

any.

Follow company policy in takingdiscipline actions, if needed.

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Key Points to Remember

You must conduct objective appraisals on ascheduled basis.

Appraisals tell employees how theyre doing andhow they can improve.

Appraisals help create a system of motivationand rewards based on performance.

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Performance

Appraisal

Meth

ods

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Performance Appraisal Meth

ods Individual Evaluation Methods

Confidential report

Essay evaluation

Critical incidents

Checklists

Graphic rating scale

Behaviorally anchored rating scale MBO

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Critical-Incident Appraisal

Critical-incident Appraisal: A performance appraisal inwhich the supervisor keeps a record of incidents that

show positive and negative ways the employee has acted;

the supervisor uses this record to assess the employees

performance.

To conduct a critical-incident appraisal, the supervisorkeeps a written record of incidents that show positive andnegative ways in which the employee has acted. The record should include dates, people involved, actions taken,

and any other details that are relevant.

At the time of the appraisal, the supervisor reviews the record toreach an overall evaluation of the employees behavior.

During the appraisal interview, the employee has a chance torespond to each of the incidents recorded.

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Critical Incident method

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 2E was happy to avoid work 1

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Checklist method

Simple checklist methodWeighted checklist method

Forced choice method

Simple checklist method:Is employee regular Y/N

Is employee respected by subordinate Y/N

Is employee helpful Y/N

Does he follow instruction Y/N

Does he keep the equipment in order Y/N

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Weighted checklist method

Weightage Performance Rating(scale 1 to 5 )

1. Regularity 10%

2. Loyalty 10%3. Willing to help 20%

4. Quality of work 20%

5. Working relationships 40%

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Forced-Choice Approach

Forced-choice Approach: A performance appraisal that presents the

appraiser with sets of statements describing employee behavior; the

appraiser must choose which statement is most characteristic of the

employee and which is least characteristic.

This type of appraisal form gives the supervisor sets of statementsdescribing employee behavior.

For each set of statements, the supervisor must select the one

that is most and the one that is least characteristic of the

employee.

These questionnaires prevent the supervisor from saying only

positive things about employees. It is used when an organization

finds that supervisors have been rating an unbelievably high

proportion of employees as above average.

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Forced Choice Method

Criteria Rating

1.Regularity on the job

Always regularInform in advance for delay

Never regular

Remain absentNeither regular nor irregular

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Graphic Rating Scale Graphic Rating Scale: A performance appraisal that rates the degree to

which the employee has achieved various characteristics.

The graphic rating scale is the most common type of appraisal used.

Various characteristics such as job knowledge or punctuality are ratedby the degree of achievement.

The rate usually receives a score of 1 to 5,with 5 representingexcellent performance.

Some forms allow for additional comments.

The advantage of this type of appraisal is that it is relatively easy to use.

However, the ratings themselves are subjective.

What one supervisor considers excellent may seem just

average to someone else.

Also, many supervisors tend to rate everyone as being at least a

little bit above average.

Additional descriptive information is an attempt to overcome these

problems.

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Graphic Rating Scale

Employee name_________ Deptt_______

Raters name ___________ Date________

------------------------------------------------------------------------

Exclnt. Good Acceptable Fair Poor

5 4 3 2 1 _ 1. Dependability

2. Initiative

3. Overall output

4. Attendance

5. Attitude

6. Cooperation

Total score

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Behaviorally Anchored Rating Scales

Behaviorally Anchored Rating Scales: A performance appraisalin which the employee is rated on scales containing statementsdescribing performance in several areas.

This is a method of performance appraisal that is tailored to theorganization and positions within that organization.

Some organizations pay behavioral scientists or organizational

psychologists to create behaviorally anchored rating scales.

These scales rate employee performance in several areas.

The supervisor selects the statement that best describes how theemployee performs.

Each job title in the organization has a different set of rating statements.

The advantage of using this technique is that it is tailored to theorganizations objectives for employees.

It also tends to be less subjective than some other approaches.

However, developing the scales is time-consuming and therefore relativelyexpensive.

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BARS( Behaviorally Anchored Rating Scale)

Step 1. Identify critical incidents

Step 2. Select performance dimension

Step 3. Retranslate the incidents

Step 4. Assign scales to incidents

Step 5. Develop final instrument

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Management by Objectives (MBO)

In organizations where MBO is used to set

goals and objectives for employees, the

supervisor will use this approach for

performance appraisal also. The appraisal is based on whether or not the

employee has met his or her objectives.

The advantage is that employees know what to

expect.

The supervisor focuses on results rather than

more subjective criteria.

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MBO Process

Set organizational goals

Defining performance target

Performance review feedback

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Group Appraisal

Ranking

Paired comparison

Forced distribution

Performance tests Field review technique

Performance Appraisal Methods

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Ranking method

Employee Rank

A 2

B 1

C 3

D 5

E 4

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Forced Distribution Method

10% 20% 40% 20% 10%

poor Below

average

average good Excellent

No.

of

employees

Force distribution curve

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360* Appraisal Process 360-degree Feedback: Performance appraisal

that combines assessment from several sources.

Because the supervisor cannot know all of anemployees behaviors and their impact on others

in the organization, the supervisor may combinehis or her appraisal with self-assessments by theemployee or with appraisals by peers orsubordinates.

Combining several sources of appraisals is called 360-degreefeedback.

The self-assessment may be done before the interview.

Then the supervisor and employee can compare theemployees appraisal with his or her own evaluation.

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360* Appraisal Process

Performance subordinate peers superior customer

Dimension

Leadership ^ ^

Communication ^ ^

Interpersonal skills ^ ^

Decision making ^ ^ ^

Technical skills ^ ^ ^

Motivation ^ ^ ^

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Performance Appraisal

Guidelines forDifferent Levels

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For Senior Management

Return on capital employed

Contribution to community

development

Degree of upward communication

from middle-level executives

Degree of growth and expansion ofenterprise.

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for Middle Level Managers

Departmental performance

Coordination among employees

Degree of upward communication fromsupervisors

Degree of clarity about corporate goals

and policies

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For Junior Level Managers

Quality and quantity of output in a givenperiod

Labor cost per unit of output in a given

period Material cost per unit in a given period

Rate of absenteeism and turnover of

employees No of accidents in a given period

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Any Questions ???