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Performance Evaluation
It is the process of identifying, measuring
and developing of employees
performances in order to achieve
organizational objectives as well as
employees objectives.
It is the process which determine the
success of entire Human Resources
Management process of the organization

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Performance Evaluation
Objective
* To determine and compare the
amount and the quality of individuals
effort, contribution or result with standards

* To determine whether the amount
of work / effort or contribution of an
individual concern is adequate or
satisfactory with the set goals
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Performance Evaluation
Activities
* Establish the required actions of
individuals to achieve organizational
objectives
* Establish key results expected from
individuals within the specified period
* Assess individuals performances
against the set standards as basis to
determine remuneration.
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Importance of Performance
Evaluation
Contribute to employee development
To identify employee potential
To use in Human Resources Planning
To determine employee compensation
To improve employee performances
Finally overall performances of the
organization
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Importance of Performance
Evaluation
To use as a guide line to determine the
training requirements.
To establish an inventory of actual and
potential performances for man power
planning.
To see the effectiveness of the recruitment
and selection process.
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Features of Performance
Evaluation
Should be fair and acceptable to all
concern
Should be clearly related to the demand of
the job.
Must be an objective process. (judge the
outcome and not the person)
Provide better communication and
relationship
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Benefits of Performance Evaluation
Eliminate uneven standards which depend
on evaluators
Avoid personal biasness.
Motivate employees
Create healthy working environment
Create most productive workforce
possible.
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What Performances Evaluation
Measures
Not only the current performances level
Its assist to measure and reinforce
strengths
Its assists to identify hidden weaknesses
Feed such information to employees
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Performance Evaluation Answers
What the employee is doing?
How well the employee is doing it?
But more importantly,
What can be done to maintain and
improve what is doing well?
What can be done to improve what is
doing less well?

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Major Functions of Performance
Evaluation
1.Observation and Identification
* Selecting what behaviors to observe
* How often to observe
2.Measurement
* Measure what actually do
* Relevant standards for what is going
to measure
* Determine the level of variance
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Major Functions of Performance
Evaluation
3.Development
* Performance improvement over time
* Identify suitable improvement process
based on the outcome
* Identify suitable other areas for
development in order to improve
employee performances.

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Purpose of Performance Evaluation
1.Give a clear picture about the employees
performances to both employer as well as
employee.
2.Help the management to take decisions
about promotions, separation, transfers,
etc.
3.Provide data to recognize performances to
decide reward systems.
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Purpose of Performance Evaluation
3.Identify training requirement and
development processes
4.Assist to evaluate the effectiveness of the
training and development programs.
Finally the properly designed and
implemented Performance Evaluation
scheme evaluate the entire Human
Resources Management process
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Steps in Performance Evaluation
Step I - Job Analysis
Examine the elements that make up the
job
Step II - Identify Performance Criteria
Identify the important elements of
performances.


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Steps in Performance Evaluation
Step III Develop Measuring Instruments
Measurements can be quantitative and
qualitative.
Some instances it can be very subjective
than objective
Step IV Establish Performance Standard
Defines expected performances (Define
good performances)

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Steps in Performance Evaluation
Step V Performance Appraisal
* Successfulness of the entire process is
depend on this step.
* Mainly conducted through an interview.
* Should be more objective than subjective
* How the out come of the evaluation
communicate to the employee

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Steps in Performance Evaluation
Step VI Intervention or Corrective Action
* If performances are lower than the set
standards decide necessary corrective
actions
* If performances are above the set
standards reset the performance
standards
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Performance Evaluation
Approaches
* Discussion of two parties involves
* Set performance targets for the period
concerned
* Agree with the set targets
* Set intermediate targets to evaluate in
between the agreed period.
* Review at the end of the period.
* Remedial / Repeat the process

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Performance Evaluation
* State what and why required (at the
beginning and the end)
* Appraised the employees effort
* Describe what behaviors concerned and
consequences of such behaviors.
* Expressed what expected
* Reasons for poor performances
* Remedial suggestion from employee
* Prepare a remedial action plan

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Performance Evaluation
Approaches
Who Evaluate
* Superior evaluate subordinate
* Group of superiors evaluating
subordinate
* A group of peers evaluating a colleague
* Subordinates evaluate their superior
* Self evaluation

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Features of Performance
Evaluation Approaches
Superior evaluating the subordinate
* Biasness
* Short comings of both parties can be
covered with mutual agreements
* Highly subjective mainly due to the
difficulty in measuring the out put

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Features of Performance
Evaluation Approaches
Group of superiors evaluating subordinate
* Avoid biasness
* Hence more accurate
* Difficulty in getting the services of the
panel at once
* Highly time consuming process
* Line of command can be effected
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Features of Performance
Evaluation Approaches
Group of peers evaluating a colleague
* Competition among peers may influence
the outcome
Subordinate evaluating their superior
* More common in academic field
* Subordinates capability and their
perceptions may influence the process

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Performance Evaluation Methods
Rank Order Method
Graphic Rating Scheme
Critical incidents
Behaviorally Anchored Rating Scales
(BARS)
Effective based (Objective) measure

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Performance Evaluation Methods
Rank Order Method
* Evaluate employees after selecting some
important features that influence the
performances.
* Use full when necessary to compeare
employees
* Based on this evaluation it is easy to
prepare a merit list.
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Performance Evaluation Methods
Graphic Rating Scheme
* Oldest and most frequently used method
* Performances are recognized at least in
three factors as follows
** quality, dependability, cooperativeness,
knowledge of work,
** each dimension is split in to at least five
levels from low to high performances
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Performance Evaluation Methods
* Meaning of the dimensions and level of
the ratings is clear to the rater and ratee.
The relationship between the jobs
considering and the dimensions used are
not same in all cases.
Ex- Ability to work without close supervision
is related to sales person but not for a
student who is doing a research.
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Performance Evaluation Methods
Critical Incidents
* Evaluator make notes on the important
activities performed by each and every
employee separately throughout the
period concern
* Consider these records covering the
concern period during the evaluation
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Performance Evaluation Methods
BARS
* Its identify critical job features and
related employee requirements to perform
that job successfully for the comparison.
* minimize the short comings that can
occur due to subjective properties of the
process.

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Performance Evaluation Methods
Steps involve in BARS
* Identify the evaluation indicators which
influence the performances
* Identify and define the incidents which
relevant to selected evaluation indicators.
Influence of these incidents may vary from
very strong to very weak.
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Performance Evaluation Methods
Steps involve in BARS
* Indicate these selected incidents in a
scale separately.
* Evaluate the performances of the
employee after selecting relevant
indicators only.
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Performance Evaluation Methods
Advantages of BARS
* Minimize the evaluators mistakes.
* Evaluator can evaluate the employees
based on real indicators.
* Without any additional effort it is easy to
convert indicators to behavioral aspects of
the job.
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Performance Evaluation Methods
Disadvantages of BARS
* Takes significant time and effort to
design the evaluation scheme.
* The cost of the system may high since it
is necessary to prepare BARS for each
and every job.
* Difficulty in preparing a scheme for every
job.
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Performance Evaluation Methods
Effectiveness Based Measures (MBO)
* Fixed objectives such as cost, time, etc.
* Measure achievement of the set
objectives.

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Short Coming of the Evaluator
Halo Effect
* Evaluator decide the performances of the
employee based on one single (good or
bad) performance indicator.
* Can influence positively or negatively.
Ex. Attendance and performance
Cooperation and performances

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Short Coming of the Evaluator
Central Tendency
* Evaluator always give average rating for
all the factors.
* This error occurs when there is a
necessity to justify very good or very bad
cases by the evaluator.
* Distort the out come of the evaluation
process.
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Short Coming of the Evaluator
Harshness and leniency
* Harshness occurs when evaluator too
hard in evaluating.
* Leniency occurs when evaluator take too
lightly.
* Both type can occur when performance
evaluation standards are too ambiguous.
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Short Coming of the Evaluator
Recency Effect
* Evaluator evaluate the employees
performances based on very recently
performed activities.
* Some employees may take the
advantage of this situation by apple
polishing
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Short Coming of the Evaluator
Preferences
* Favorites of the evaluator may get good
ratings
* Can be due to age, race, sex, religion,
cast, etc.