PERFORMANCE APPRAISAL

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INTRODUCTION
After an employee has been selected, trained and motivated, his performance is evaluated In performance appraisal, the management finds out how effective it has been at hiring and placing an employee.

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MEANING
Performance Appraisal is a method of evaluating the performance of employees at the workplace. It is a process that involves determining and communicating to an employee how he or she is performing the job and then establishing a plan for improvement.

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FEATURES
1. 2. 3. 4. 5.

It tries to find out how well the employee is performing the job. It tries to establish a plan for further improvement. The appraisal is carried out periodically. It may be formal or informal It is a future oriented activity.

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PERFORMANCE APPRAISAL PROCESS

Establish Performance Standards Communicate Performance expectations to employees Measure actual performance Compare actual performance with standards Discuss the appraisal with employees If necessary, take
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OBJECTIVES OF PERFORMANCE APPRAISAL

For compensation decision For promotion decision For designing training and development

programmes
Giving feedback to the employees For personal development of employees

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METHODS/ TECHNIQUES OF PERFORMANCE APPRAISAL

METHODS

TRADITIONAL METHODS

MODERN METHODS

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TRADITIONAL METHODS
Confidential Report Straight Ranking Method Paired Comparison Method Man-to-man Comparison Method Grading Method Graphic Method Forced Choice Description Method Free Essay Method Forced Distribution Method Check Lists Critical Incidents

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CONFIDENTIAL REPORT
In most government departments and public enterprises, performance appraisal is done through annual confidential report.

It is written once in a year and relates to the performance, ability and character of an employee during that year.

The rater normally has a very casual attitude while filling this report.

No feedback is provided to the employee and therefore its credibility is very low. 4/26/12

STRAIGHT RANKING METHOD

It is the oldest and simplest method of Performance Appraisal. Ranks are assigned to persons according to their performance.

This method is suitable only when there are limited persons in the organsiation.

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PAIRED COMPARISON METHOD

In this method, each employee is compared with all others in a group, one at a time. After all the comparisons, the employees are given final rankings.

For example, if there are 5 persons to be evaluated A,B,C,D and E. As performance is first compared with B then C,D and E. Similarly Bs performance is compared with others and vice versa.

This method gives more reliable rating than straight ranking. But it is suitable only when the number of persons is small. 4/26/12

GRADING METHOD
In this method, grades are given for various parameters of performance such as analytical ability, cooperativeness, leadership ability etc. The employees are given grades according to the judgement of the rater. Grades may be A, B, C, D, E etc.

A- Outstanding B- Very Good C- Satisfactory D- Average E- Below Average 4/26/12

GRAPHIC METHOD
This is the most commonly used method of Performance Appraisal. The employee is rated on a scale for various parameters of performance such as attitude, loyalty, punctuality, analytical ability, interest in work etc.

10

15

20

No interest in work

Careless

Interest ed in work

Enthusias tic
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Very enthusiast c & gives advice

FORCED CHOICE DESCRIPTION METHOD

Several phrases are given to the rater and he has to select phrases which are most suitable to the employees performance.

For example, the rater might be asked to state which of the two statements given below is more descriptive of the employee in question: (i) Give good clear instructions to his subordinates; (ii) Can be depended upon to complete any job assigned. The rater may feel that neither of the two statements in the pair is applicable, but he must select the one that is more descriptive. Only one of the statements is correct in identifying the better performance and this scoring key must be 4/26/12 kept secret from the raters.

FREE ESSAY METHOD

Under this method, the supervisor writes a report about the employee which is based on his assessment. The supervisor continuously watches the subordinate and writes his assessment in the report.

This method may suffer from personal bias because of likings or dislikings of the superior.

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FORCED DISTRIBUTION METHOD

This system is based on the presumption that all employees can be divided into 5 categories i.e. Outstanding, above average, average, below average and poor. The rater is asked to place 10% persons in outstanding group, 20% in above average, 40% in average, 20% in below average and 10% in poor category. The rater does not explain why an employee is placed in a particular category.

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CHECK LISTS
A check list is a list of statements that describes the characteristics and performance of employees on the job. The rater checks to indicate whether the behaviour of an employee is positive or negative to each statement. The performance of the employee is rated on the basis of number of positive checks.

Example: The checklist may contain such questions:

1. 2. 3.

Is the employee regular? Does he follow instructions? Is he cooperative?

Yes/ No Yes/ No Yes/ No

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CRITICAL INCIDENTS
The critical incident method of performance appraisal involves identifying and describing specific events (or incidents) where the employee did something really well or something that needs improvement. The assumption in this method is that the performance of the employee on the happening of critical incidents determines his failure or success. Examples:
1. 2. 3.

Refused to accept instructions even when these were clear. Increased his efficiency despite resentment from other workers. Showed his presence of mind in saving a worker when there was accidental fire.

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GROUP APPRAISAL
Under this method, employees are rated by an appraisal group consisting of their superior and 3-4 other persons who have some knowledge of their performance.

This group consists of the immediate supervisor of the employee, other supervisors who have close contact with the employees work, manager or head of the department etc.

This method eliminates personal bias to a large extent as performance is evaluated by multiple raters. But it is a very time consuming process 4/26/12

FIELD REVIEW METHOD

In this method, an expert from the Personnel Department interviews/ questions the supervisors and obtains all the important information on each employee and takes notes of it. The interviewer questions the supervisor about the requirements of each job in his unit and about the performance of each man in his job.

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MODERN METHODS
Appraisal by results or MBO Assessment Centre 360 degrees Performance Appraisal Human Asset Accounting Method Behaviorally Anchored Rating Scales

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APPRAISAL BY RESULTS OR MBO

It is a process whereby the superior and subordinate managers of an organisation jointly identify their common goals, define each individuals major areas of responsibility in terms of results expected of him and assessing the contributions of each of its members.

PROCESS:
1. 2. 3. 4. 5.

Set organisations goals Set departmental goals Discuss departmental goals Define expected results Measure the results

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ASSESSMENT CENTRE
This was first developed in German Army in 1990. Later business and industrial houses started using this method.

An assessment centre is a central location where the managers may come together to participate in job related exercices evaluated by trained observers.

It is a system where assessment of several individuals is done by various experts using various techniques. The individuals are given various assignments similar to the ones they would be handling when promoted. The assignments could be case studies, role playing, in-basket exercises etc.

Observers rank the performance of each and every participant in 4/26/12 order of merit.

360 DEGREES PERFORMANCE APPRAISAL

360-degree feedback means formal appraisal from everybody that the person being assessed comes into contact with i.e. line managers, subordinates, colleagues, peers and even outsiders such as clients.

It is also called Multi-Source feedback.

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BEHAVIOURALLY ANCHORED RATING SCALES

This is a new appraisal technique which has been recently developed. It provides better results as compared to other techniques. It is a combination of Rating Scale and Critical Incident method. It usually consists of 5 steps:
1. 2. 3. 4. 5.

Generate critical incidents Develop performance dimensions (parameters on which performance is evaluated) Reallocate incidents (to various dimensions) Assigning scale value to incidents Develop final instruments (Finally BARS instrument is created which consists of several vertical scales)
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