Performance appraisal and performance management are related but distinct processes used in human resource management. Performance appraisal involves evaluating an employee's past performance against standards, while performance management is the ongoing process of setting goals, monitoring performance, providing feedback and coaching to help employees meet goals. There are various methods used for performance appraisal, including rating scales, rankings, behavioral observations and management by objectives. Both processes aim to improve employee performance and development.
3. Performance aPPraisal and
Performance management
Performance appraisal
Evaluating an employee’s current and/or past
performance relative to his or her performance
standards.
Performance management
The process employers use to make sure employees
are working toward organizational goals.
4. difference between Pm and Pa
Processes used to identify,
encourage,
measure,evaluate,
improve, and reward
employee performance.
The process of evaluating how
well employees perform their
jobs and then communicating
that information to the
employees.
6. definitions
According to Newstrom, “It is the process of evaluating
the performance of employees, sharing that information with
them and searching for ways to improve their performance’’.
meaning
Performance appraisal is the step where the management
finds out how effective it has been at hiring and placing
employees.
A “Performance appraisal” is a process of evaluating an
employee’s performance of a job in terms of its requirements.
7. wHY tHe Performance aPPraising
Appraisals play an integral role in the employer’s
performance management process.
Appraisals help in planning for correcting deficiencies
and reinforce things done correctly.
Appraisals, in identifying employee strengths and
weaknesses, are useful for career planning
Appraisals affect the employer’s salary raise decisions.
9. continuous imProvement
A management philosophy that requires employers to
continuously set and relentlessly meet ever-higher
quality, cost, delivery, and availability goals by:
Eradicating the seven wastes:
overproduction, defective products, and
unnecessary downtime, transportation, processing
costs, motion, and inventory.
Requiring each employee to continuously improve
his or her own personal performance, from one
appraisal period to the next.
10. Performance aPPraisal roles
Supervisors
Usually do the actual appraising.
Must be familiar with basic appraisal techniques.
Must understand and avoid problems that can
cripple appraisals.
Must know how to conduct appraisals fairly.
11. Performance aPPraisal roles (cont’d)
HR department
Serves a policy-making and advisory role.
Provides advice and assistance regarding the
appraisal tool to use.
Prepares forms and procedures and insists that all
departments use them.
Responsible for training supervisors to improve their
appraisal skills.
Responsible for monitoring the system to ensure that
appraisal formats and criteria comply with EEO laws
and are up to date.
12. stePs in aPPraising
Performance
1.Defining the job
Making sure that you and your subordinate agree on
his or her duties and job standards.
2.Appraising performance
Comparing your subordinate’s actual performance
to the standards that have been set; this usually
involves some type of rating form.
3.Providing feedback
Discussing the subordinate’s performance and
progress, and making plans for any development
required.
13. designing the aPPraisal
tool
What to measure?
Work output (quality and quantity)
Personal competencies
Goal (objective) achievement
How to measure?
Graphic rating scales
Alternation ranking method
MBO
15. Performance aPPraisal
methods
Graphic rating scale
A scale that lists a number of traits and a
range of performance for each that is used to
identify the score that best describes an
employee’s level of performance for each
trait.
17. comParative methods
Ranking
A listing of all employees from highest to lowest in
performance.
Drawbacks
Does not show size of differences in
performance between employees
Implies that lowest-ranked employees are
unsatisfactory performers.
Becomes difficult process if the group to be
ranked is large.
18. Forced-Choice Method
A trait approach to performance appraisal that requires the rater
to choose from statements designed to distinguish between
successful and unsuccessful performance.
Similar to grading on a curve; predetermined percentages of
rates are placed in various performance categories.
Example:
15% high performers
20% high-average performers
30% average performers
20% low-average performers
15% low p
19. Behavioral /oBjective methods
Behavioral Rating Approach
Assesses employees’ behaviors instead of other
characteristics
Consists of a series of scales created by:
Identifying important job dimensions
Creating statements describing a range of desired and
undesirable behaviors (anchors)
Type of behavioral scale
Behaviorally anchored rating scales (BARS)
BARS is an appraisal tool that anchors numerical rating
scale with specific examples of good or poor
performance.
20. Behavioral /oBjective methods
Management by Objectives
Specifying the performance goals that an individual and
his or her manager agree that employee will try to attain
within an appropriate length of time.
Key MBO Ideas
Employee involvement creates higher levels of
commitment and performance.
Encourages employees to work effectively toward
achieving desired results.
Performance measures should be measurable and should
define results.
21. Narrative methods
Critical Incident
Manager keeps a written record of highly favorable
and unfavorable employee actions.
Drawbacks
Variations in how managers define a “critical
incident”
Time involved in documenting employee actions
Most employee actions are not observed and may
become different if observed
22. Narrative methods(coNtd..)
Essay
Manager writes a short essay describing an employee’s
performance.
Drawback
Depends on the managers’ writing skills and their
ability to express themselves.
23. 360 Feed Back system
A system of collecting performance information from
multiple parties.
Multiple parties include one’s subordinates peers, supervisors
and customers
It is also used to design promotion and reward.
25. poteNtial ratiNg scale
appraisal proBlems
Unclear standards
An appraisal that is too open to interpretation.
Halo effect
Occurs when a supervisor’s rating of a subordinate on one
trait biases the rating of that person on other traits.
For example, supervisors often rate unfriendly employees
lower than the others, on all traits.
Central tendency
A tendency to rate all employees the same way, such as
rating them all average.
26. poteNtial ratiNg scale appraisal
proBlems (coNt’d)
Strictness/leniency
The problem that occurs when a supervisor has a
tendency to rate all subordinates either high or low.
Bias
The tendency to allow individual differences such as
age, race, and sex to affect the appraisal ratings
employees receive.
27. how to avoid appraisal
proBlems
Learn and understand the potential problems, and the
solutions for each.
Use the right appraisal tool. Each tool has its own pros and
cons.
Train supervisors to reduce rating errors such as halo,
leniency, and central tendency.
Have raters compile positive and negative critical incidents as
they occur.
28. Who Should do the
ApprAiSing?
The immediate supervisor
Peers
Rating committees
Self-ratings
Subordinates
360-Degree feedback
30. mAin purpoSeS of performAnce
mAnAgement
Individual Rewards (Base and Incentive)
Feedback for Sub-Ordinate (Plus and Minus)
Recognition of Superior Performance
Documentation of Weak Performance
Personnel Decision-Making
Future Goal Commitments (Planned
Achievements)
31. Why performAnce mAnAgement?
Increasing use by employers of performance
management reflects:
The popularity of the total quality management
(TQM) concepts.
The belief that traditional performance appraisals
are often not just useless but counterproductive.
The necessity in today’s globally competitive
industrial environment for every employee’s efforts
to focus on helping the company to achieve its
strategic goals.
32. SourceS of performAnce
mAnAgement
Managers
Have the ability to rate employees
Feedback from MANAGERS is strongly related to
performance
Peers
Co-worker
Expert knowledge of job requirement
Observe employee daily!
Bring a different perspective in the evaluation process -
provide extremely valid assessment of performance
Useful esp. if supervisor does not always observe
employee (e.g. law enforcement)
33. SourceS of performAnce
mAnAgement
Subordinates
Evaluation of managers
UPWARD FEEDBACK
Self
Not often used
Observe own behaviour
Customers
Often the only best person to observe employee performance
BEST source of information
Customer evaluation sheet
Random mail surveys
Telephone survey
34. performAnce mAnAgement:
A four Step proceSS
Step 1: Performance Planning and Communication
Step 2: Coaching/Feedback
Step 3: Performance Review
Step 4: Staff Development
35. the componentS of An effective
performAnce mAnAgement proceSS
Direction sharing
Role clarification
Goal alignment
Developmental goal setting
Ongoing performance monitoring
Ongoing feedback
Coaching and support
Performance assessment (appraisal)
Rewards, recognition, and compensation
Workflow and process control and return
36. objective Setting:
be Sure it’S S.m.A.r.t.
Specific
Measurable
Achievable
Results Oriented
Time bound