Presented by: Kuldeep Badekar 02 Supriya Bane 05 AmbarKumar Nagpal 32 Anjali Rathod 42 Nitin Shukla - 47 Ameya Sule - 50

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Performance Appraisal is
a periodic and systematic process

of evaluating the performance and qualifications of the employee in

terms of the requirements of the job, and also for administration purposes such as selection for promotion and providing financial incentives. It is basically the process of judging the worth of observed performance.

It also assesses the potential for development.

NEED
1. P.A. helps the supervisor in assigning jobs to the best suited individual. 2. Ability of the staff is understood. 3. P.A. can be used as a basis for transfers, promotions, demotions, terminations. 4. Ratings can be used to modify training programmes accordingly.

NEED
5. P.A. creates a healthy competition among the employees. 6. P.A. provides feedback about the employees which helps in defining new standards of rank. 7. P.A. is helpful to counsel the employees. 8. P.A. is helpful in decisions on skill improvement and acquisition, career and professional development.

IMPORTANCE

POSITIVE Self-Actualization Job Satisfaction Stability

NEGATIVE Loss of Self Confidence Dissatisfaction Apprehension

OBJECTIVES
1. Identify critical job elements, expectations and
performance objectives. 2. Establish agreement on the job objectives and the criteria that will be used for evaluation. 3. Provide feedback on job performance i.e. strengths and weaknesses. 4. Identify realistic job and career opportunities.

5. Provide valid information for personnel decisions that will

affect the employees.

OBJECTIVES
6. To clarify expectations and subsequently improve communication.

7.
8.

Coach and develop employees based on their strengths,

weaknesses and needs. To create and maintain a satisfactory level of performance.

9.

To facilitate fair and simple performance-based compensation.

behavior

10. To ensure organizational effectiveness by correcting employee

BENEFITS
1. 2. Improves quality of two-way communication. Documented appraisal system safeguards against charge of favouritism and malpractice. 3. Creates a climate of openness and trust which

facilitates congenial working atmosphere.

4. Helps to create a S.W.O.T. analysis for each employee.

5.

Helps to achieve better operational results

and improved work performance.

IMPORTANT FEATURES
1. P.A. is a systematic description of an employees strengths and weaknesses.

2.
3. 4.

P.A. keeps a track record of an

employees performance. P.A. helps to establish a Plan Of

Improvement.
P.A.s are periodic and according to a definite plan.

5.

P.A. is not job evaluation; It is employee

evaluation.

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Various Steps involved into process are as follows Objectives of Appraisal

Establish job Expectation

Design Appraisal programme

Appraise performance

Performance review

Use appraisal Data for appropriate purposes

 Purposes of employee assessment : To effect promotions based on competence and performance

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.

To let the employees know where they stand

To improve communication between superior and subordinate, and improves understanding of personal goals and concerns.

To determine whether HR programmers such as selection, training, and transfers have been effective or not.

Formal Vs Informal What Methods?

Whose Performance ?

When To Evaluate?

Appraisal Design

Who Are the Raters?

What To Evaluate?

What Problems?

How To Solve?

1.Formal versus Informal Appraisal: Occur at specified time periods- once or twice a year. Purpose of employee evaluation. 2. Who are Raters?

Raters can be immediate supervisors, specialists from the HR department, subordinates, peers, committees, clients, self-appraisals, or a combination of several. Immediate Supervisor No one is more familiar with the subordinates performance than his or her superior.

Subordinates Useful in assessing an employees ability to communication, delegate work, allocate resources, disseminate information, resolve intra-personal conflict, and deal with employees on a fair basis. Peers facts include contribution to workgroup projects, interpersonal effectiveness, communication skills, reliability and initiative. Unfortunately, friendship or animosity may result in distortion of evaluation. Client

Self appraisal
Consultants

360-degree system of appraisal

The six criteria for assessing performance are: 1. Quality: The degree to which the process or result of carrying out an activity approaches perfection in terms of either conforming to some ideal way of performing the activity, or fulfilling the activitys intended purpose.

2. Quantity: The amount produced, expressed in monetary terms, number of units, or number of competed activity cycles. 3. Timeliness: Activity is completed or a result produced, at the earliest time desirable from the standpoints of both coordinating with the outputs of others and of maximizing the time available for other activities.

4. Cost of Effectiveness: use of organizations resources ,is maximized in the sense of getting the highest gain or reduction in loss from each unit or instance of use of a resource.

5. Need for supervision: Job performer can carry out a job function without either having to request supervisory assistance or requiring supervisory intervention to prevent an adverse outcome.

6. Interpersonal impact: A performance promotes feeling of self-esteem, goodwill and cooperation among co-workers and subordinates.

 Performance appraisals are subjected to a wide variety of inaccuracies & biases referred to as rating errors. These errors occurs in raters observations, judgment, & information processing, and can effect assessment results.

PROBLEMS OF RATING
To provide training. Training is not a cure-all for all the ills of the appraisal systems

How often should the employee be assessed?

To evaluate once in three months, or six months, or once in a year. Newly hired employees are rated more frequently than older ones. Frequent assessment is better than phased evaluation

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1. Paired Comparison method: Compares each employee with other employee and rates each as either superior or the weaker member of the pair E.g. Godrej soaps, KOPRAN, NOCIL, OTIS, etc. Advantages * Each employee is compared Disadvantages against every other
* * Precise ranking method of total Comparison on the basis *performance rather than specific job Reliable & easier ranking criteria * Becomes unwieldy when many employees are being compared

A B C

A + +

B +

C -

D + + +

E + + +

Final Rank 3 2 1

D
E

+
-

4
5

No of Positive evaluation Total no. of evaluation * 100 = employee superior evaluation

Points assigned to the performance of an employee and the ratings are distributed in a pattern to conform to normal frequency distribution Prevents raters from rating too high or too low Limitations
same distribution of excellent, average and poor performers

* Not all group of employees will have

* Difficult to decide whom to place in Lower categories if all are outstanding

No. of employees 10% poor

20%

40%

20% good

10% Excellent

Below average average

Force distribution curve

Graphical indication of a subordinates relative strength & weaknesses on specific performance dimensions and on an overall performance Evaluation on the basis of the location on a continuum or dimension Continuous Rating Scale Discontinuous Rating Scale Advantages Less time consuming Disadvantages Qualitative analysis & comparisons Scales not directly tied to the behavior
High standardization of items Fail to reflect the specific nature & demands of the jobs being performed

Employee name_________ Dept_______ Raters name ___________ Date________ -----------------------------------------------------------------------Exc. Good Acceptable Fair Poor 5 4 3 2 1 _ Dependability Initiative Overall output Attendance Attitude Cooperation Total score Continuous Rating Scale

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The rater is presented with a set of objectives or descriptive statements about the employee and his behavior and asked to check statements representing the characteristics and performance of each employee Types: Simple checklist method Weighted checklist method Forced choice method

Is employee regular Is employee respected by subordinate Is employee helpful Does he follow instruction Does he keep the equipment in order Disadvantages:

Y/N Y/N Y/N Y/N Y/N

* Good checklist is difficult to construct * Separate checklist is needed for each job

Traits Attendance Knowledge of job Willing to help Quality of work Dependability

Rating (scale 1 to 5 )
0.5 1.5 1.5 1.5 2.0

Criteria
Regularity of job Always regular Inform in advance about delay Never Regular Remains absent

Ratings
Most Least

Neither regular nor irregular

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Manager observes and record incidents of a subordinates effective and in-effective behavior throughout the appraisal period Focus on raters attention on those critical or key behaviors that make the difference between doing a job effectively & doing it ineffectively Specific behaviors are cited and not vaguely defined personality traits Advantages Data directly related to job performance Close & continuous observation Factual records for decision making Disadvantages MoreTime consuming, costly valid than trait based appraisals
No comparison possible

Ex: A fire, sudden breakdown, accident

Workers reaction scale

A B C D E

informed the supervisor immediately Become anxious on loss of output tried to repair the machine Complained for poor maintenance was happy to forced test

5 4 3 2 1

Essay or free form Appraisal Group Appraisal Confidential reports

System that features an agreement by a superior and a subordinates for a particular period and a periodic review of how well the subordinate achieved those objectives the subordinate is provided with a course to follow and a target to shoot for, while performing the job Relies on goal setting to establish objectives for the organization as a whole

Key Features Steps involved Benefits Limitations

* Matching organization 1.individual goals Set organizational Goals 2. Defining performance goals * Mutual goal setting 3. Performance reviews * Frequent individual performance * Objective measurement 4.review Feedback of performance & commitment * Lack of support * from topexpectations of Defines management job accomplishment * Objectives- difficult to establish * Improves superior-subordinate * Involves considerable time, relationship energy & expenditure * Participation of subordinate in goal setting

Behaviorally anchored rating scales (BARS) Assessment Centers Human Resource Accounting Psychological appraisal

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 Positive leniency error Negative leniency error The major problem

Tendency to rate high or low on all factors due to impression of a high or low rating on some specific factor How to deal with?

The tendency of evaluators to rate other people giving special consideration to those qualities that they perceive in themselves Solution

Tendency of not giving realistic appraisal in spite of knowing its possible impact Appraisal can lead to 3 outcomes

The company produces 9mn tonnes of crude oil every year at 7 plants Annual budget greater than any other company barring U.P and Maharashtra It directly employs over 2,35,000 people including 18,000 managers

In the early 80s SAIL was burdened with cumulative losses of Rs 276 Cr
By 1988-89 SAIL recorded a profit of Rs 358 Cr

To integrate company and individual goals through a process of performance assessment To increase awareness of targets and responsibility of officers
To ensure a more objective assessment of performance and potential

To distinguish between differing level of performance on relative basis To identify the developmental actions to be taken to enhance the performance of officers To facilitate the process of executive development through various methods

In order to achieve the objectives following components were incorporated :Tasks and target settings Self appraisal Performance review discussion Performance appraisal Development plan Final assessment

Change in performance system due to the company undergoing change Priorities for action project (1985-86) A feeling of not being upto the expectations of the cuontry

The areas of improvement identified by priorities for action program were :Improving work culture Optimal use of installed facilities Increase in productivity Generation of profits through cost control Customer satisfaction

Promotion policy amendment was selected as initial solution but unfruitful

It did not distinguish between different levels of performance The system was not grounded in the requirements of the company Officers were not participating fully in the system

No focus on expectations from the junior officers

The system was not participative

Due to hierarchy in assessment staff ,the reporting officer felt less role in the process

Discussion Implementation Presentation Identification of 70 internal resource persons Trainer or trainee program for 7000 officers Review the implementation

Large number of officers to be covered in various units The needs to explain the various aspects of the system particularly target setting and performance review discussion and convince officers of the need and rationale

The new system was in operations for 2 years with some modifications The system proved successful in correcting imbalance Active participation of officers Development aspects of the system Data on problems of employees

The system implemented well in the 1st two years Central task force was formed to monitor the implementation Data generated created anomalies in ratings arising out of interdepartmental grouping and comparisons

Large organization making it difficult to monitor effective implementation of the system System not understood Need to train the officers

Least time spent on performance review discussions

Re-educate officers

Produced three films Re- discussions on the appraisal system

Reliability of Ratings Top management support and organizational commitment Rigid Impartiality

Specific Development Activities

Continuous performance appraisal

Inform earlier

Establish a friendly atmosphere

Consistency with managerial system

Injecting Ethics

Preparing a plan for future action Creating trust between manager and subordinate

Flexibility and addictiveness

Use Multiple criteria Train the Evaluators De- Emphasis Traits Provision for Appeals Post Appraisal Interviews Less time consuming and less costly Be open about limitations

Do not sum ratings

Always clarify the meaning of each rating item

Rely on specific examples Stick to observations and facts and not influences Recognize that it is a cognitive decision making process

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