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  1. 1. Performance Appraisal
  2. 2. Performance Appraisal : <ul><li>Performance Appraisal (PA) refers to all those procedures that are used to evaluate the personality, performance, potential, of its group members </li></ul>
  3. 3. Relationship between jab analysis and performance appraisal: <ul><li>Job analysis performance performance </li></ul><ul><li>standards appraisal </li></ul><ul><li>Describes work </li></ul><ul><li>& Personnel </li></ul><ul><li>Requirement </li></ul><ul><li>Of a particular </li></ul><ul><li>job </li></ul>Translate job Into levels of To acceptable Or unacceptable performance Describes the Job relevant strengths and weakness of Each individual
  4. 4. Question arises? <ul><li>Why do we measure performance? </li></ul><ul><li>Effective performance appraisal systems </li></ul><ul><li>How do we measure performance? </li></ul>
  5. 5. Characteristics <ul><li>It is a step by step process </li></ul><ul><li>It examine the employee strengths and weaknesses </li></ul><ul><li>Scientific and objective study </li></ul><ul><li>Ongoing and continuous process </li></ul><ul><li>Secure information for making correct decisions on employees </li></ul>
  6. 6. Needs and Objectives: <ul><li>Provide feedback about employees </li></ul><ul><li>Provide database </li></ul><ul><li>Diagnose the S & W of individuals </li></ul><ul><li>Provide coaching, counseling, career planning to subordinates </li></ul><ul><li>Develop positive relation and reduce grievance </li></ul><ul><li>Facilitates research in personnel management </li></ul>
  7. 7. Appraisal Benefits (cont.) <ul><li>Appraisals offer employees: </li></ul><ul><ul><li>Direction </li></ul></ul><ul><ul><li>Feedback </li></ul></ul><ul><ul><li>Input </li></ul></ul><ul><ul><li>Motivation </li></ul></ul>
  8. 8. Appraisal Benefits <ul><li>Appraisals offer the company: </li></ul><ul><ul><li>Documentation </li></ul></ul><ul><ul><li>Employee Development </li></ul></ul><ul><ul><li>Feedback </li></ul></ul><ul><ul><li>Legal protection </li></ul></ul><ul><ul><li>Motivation system </li></ul></ul>
  9. 9. Why Appraisals Are Important <ul><li>Recognize accomplishments </li></ul><ul><li>Guide progress </li></ul><ul><li>Improve performance </li></ul>
  10. 10. Why Important (cont.) <ul><li>Review performance </li></ul><ul><li>Set goals </li></ul><ul><li>Identify problems </li></ul><ul><li>Discuss career advancement </li></ul>
  11. 11. Steps in performance appraisal Establishing job standards Designing an appraisal programme Appraise performance Performance interview Use appraisal data For appropriate purpose
  12. 12. Process of PA Setting performance standards Taking corrective standards Discussing results Comparing standards Measuring standards Communicating standards
  13. 13. Issues in appraisal system Appraisal Design? Formal and informal Whose performance? Who are the raters? What problems? How to solve? What to evaluate? When to evaluate? What methods?
  14. 14. What to evaluate? (Philip Model) Problem children Planned separation stars Social citizen H L H L Potential Performance
  15. 15. How PA contribute to firm’s competitive advantages Improving performance Making correct decision Ensuring legal competence Minimizing dissatisfaction And turnover Values and behavior Competitive advantage
  16. 16. Problems in performance appraisal <ul><li>Errors In rating </li></ul><ul><ul><li>Halo effects </li></ul></ul><ul><ul><li>Stereotyping </li></ul></ul><ul><ul><li>Central tendency </li></ul></ul><ul><ul><li>Constant error </li></ul></ul><ul><ul><li>Personal bias </li></ul></ul><ul><ul><li>Spill over effect </li></ul></ul>
  17. 17. <ul><li>Incompetence </li></ul><ul><li>Negative approach </li></ul><ul><li>Multiple objectives </li></ul><ul><li>Resistance </li></ul><ul><li>Lack of knowledge </li></ul>Problems in performance appraisal (Cont’d)
  18. 18. Essentials of an effective appraisal system <ul><li>Mutual trust </li></ul><ul><li>Clear objectives </li></ul><ul><li>Standardizations </li></ul><ul><li>Training </li></ul><ul><li>Job relatedness </li></ul><ul><li>Documentation </li></ul><ul><li>Feedback and participation </li></ul><ul><li>Individual differences </li></ul><ul><li>Post appraisal review </li></ul><ul><li>Review and appeal </li></ul>
  19. 19. Appraisals and Discrimination <ul><li>Title VII </li></ul><ul><li>ADA </li></ul><ul><li>Other fair employment </li></ul><ul><li>Laws </li></ul>
  20. 20. Discrimination (cont.) <ul><li>Failure to communicate standards </li></ul><ul><li>Failure to give timely feedback </li></ul><ul><li>Failure to allow employees to correct performance </li></ul><ul><li>Inconsistency in measuring performance </li></ul><ul><li>Failure to document performance objectively </li></ul>
  21. 21. Appraisal Forms <ul><li>Define performance expectations </li></ul><ul><li>Describe measurement tools </li></ul><ul><li>Use a rating system </li></ul><ul><li>Cover specific examples </li></ul><ul><li>Set measurable goals </li></ul>
  22. 22. Measure Performance <ul><li>Measurement systems need to be: </li></ul><ul><li>Specific </li></ul><ul><li>Fair </li></ul><ul><li>Consistent </li></ul><ul><li>Clear </li></ul><ul><li>Useful </li></ul>
  23. 23. Measure Performance (cont.) <ul><li>Systems can be: </li></ul><ul><li>Numerical </li></ul><ul><li>Textual </li></ul><ul><li>Management by Objective (MBO) </li></ul><ul><li>Behavior oriented </li></ul>
  24. 24. Document Performance <ul><li>Make sure documentation is objective </li></ul><ul><li>Document performance of all employees </li></ul><ul><li>Provide complete and accurate information </li></ul><ul><li>Document performance on a regular basis </li></ul>
  25. 25. Set Goals…. <ul><li>Based on job requirements </li></ul><ul><li>Realistic </li></ul><ul><li>Measurable </li></ul><ul><li>Observable </li></ul><ul><li>Challenging </li></ul><ul><li>Prioritized </li></ul>
  26. 26. Employee Input <ul><li>Employees take an active role: </li></ul><ul><ul><li>Setting goals </li></ul></ul><ul><ul><li>Designing action plans </li></ul></ul><ul><ul><li>Identifying strengths and weaknesses </li></ul></ul><ul><ul><li>Employees participate in the PA meeting </li></ul></ul>
  27. 27. Preparation <ul><li>Employees: </li></ul><ul><li>Review performance </li></ul><ul><li>Think about new goals </li></ul>
  28. 28. Preparation (cont.) <ul><li>Supervisors: </li></ul><ul><li>Review performance </li></ul><ul><li>Complete written appraisal </li></ul><ul><li>Think about new goals </li></ul><ul><li>Schedule time and place </li></ul>
  29. 29. Start the Meeting <ul><li>Lay out agenda </li></ul><ul><li>Talk about money </li></ul><ul><li>Encourage input </li></ul><ul><li>Give good news first </li></ul>
  30. 30. During the Meeting <ul><li>Review performance: </li></ul><ul><li>Based on previous goals </li></ul><ul><li>Noting strengths and accomplishments </li></ul><ul><li>Identifying areas for improvement </li></ul>
  31. 31. Presentation Tips <ul><li>Focus on the professional </li></ul><ul><li>Give objective examples </li></ul><ul><li>Invite response </li></ul><ul><li>Listen actively </li></ul><ul><li>Create “we” mentality </li></ul>
  32. 32. During the Meeting (cont.) <ul><li>Set goals: Based on company goals </li></ul><ul><li>Building on areas that need improvement </li></ul>
  33. 33. End the Meeting <ul><li>Encourage good performance </li></ul><ul><li>Lay out action plan </li></ul><ul><li>Communicate outcome of goals not met </li></ul><ul><li>Confirm understanding </li></ul>
  34. 34. Continuous Feedback <ul><li>Formal appraisals </li></ul><ul><li>Informal appraisals </li></ul><ul><li>Open communication </li></ul>
  35. 35. Recognize Good Performance <ul><li>Verbal </li></ul><ul><li>Public </li></ul><ul><li>Tangible </li></ul><ul><li>Monetary </li></ul>
  36. 36. Identify Poor Performance <ul><li>Act early </li></ul><ul><li>Take the right approach </li></ul><ul><li>Deal with employee reaction </li></ul><ul><li>Handle continued poor performance </li></ul>
  37. 37. Discipline Poor Performance <ul><li>Recognize problems </li></ul><ul><li>Talk with employee </li></ul><ul><li>Follow company policy </li></ul>
  38. 38. Handle Hard Cases <ul><li>Reviewing highly emotional employees </li></ul><ul><li>Rating former peers </li></ul>
  39. 39. Key Points to Remember <ul><li>You must conduct objective appraisals on a scheduled basis. </li></ul><ul><li>Appraisals tell employees how they’re doing and how they can improve. </li></ul><ul><li>Appraisals help create a system of motivation and rewards based on performance. </li></ul>
  40. 40. Performance Appraisal Methods <ul><li>Individual Evaluation Methods </li></ul><ul><ul><li>Confidential report </li></ul></ul><ul><ul><li>Essay evaluation </li></ul></ul><ul><ul><li>Critical incidents </li></ul></ul><ul><ul><li>Checklists </li></ul></ul><ul><ul><li>Graphic rating scale </li></ul></ul><ul><ul><li>Behaviorally anchored rating scale </li></ul></ul><ul><ul><li>MBO </li></ul></ul>
  41. 41. 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 2 E was happy to forced test 1
  42. 42. Checklist method <ul><li>Simple checklist method </li></ul><ul><li>Weighted checklist method </li></ul><ul><li>Forced choice method </li></ul>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
  43. 43. Weighted checklist method weights performance rating (scale 1 to 5 ) Regularity 0.5 Loyalty 1.5 Willing to help 1.5 Quality of work 1.5 Relationship 2.0
  44. 44. Forced choice method <ul><li>Criteria Rating </li></ul><ul><li>1.Regularity on the job Most Least </li></ul><ul><ul><li>Always regular </li></ul></ul><ul><ul><li>Inform in advance for delay </li></ul></ul><ul><ul><li>Never regular </li></ul></ul><ul><ul><li>Remain absent </li></ul></ul><ul><ul><li>Neither regular nor irregular </li></ul></ul>
  45. 45. Graphic Rating Scale <ul><li>Continuous Rating Scale </li></ul><ul><li>Discontinuous Rating Scale </li></ul>Employee name_________ Deptt_______ Rater’s name ___________ Date________ ------------------------------------------------------------------------ Exc. Good Acceptable Fair Poor 5 4 3 2 1 _ Dependability Initiative Overall output Attendance Attitude Cooperation Total score Continuous Rating Scale
  46. 46. Discontinuous Rating Scale Attitude No Interest Indifferent Interested Enthusiastic Very enthusiastic
  47. 47. 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
  48. 48. MBO Process <ul><li>Set organizational goals </li></ul><ul><li>Defining performance target </li></ul><ul><li>Performance review </li></ul><ul><li>feedback </li></ul>
  49. 49. <ul><li>Group Appraisal </li></ul><ul><ul><li>Ranking </li></ul></ul><ul><ul><li>Paired comparison </li></ul></ul><ul><ul><li>Forced distribution </li></ul></ul><ul><ul><li>Performance tests Field review technique </li></ul></ul>Performance Appraisal Methods
  50. 50. Ranking method Employee Rank A 2 B 1 C 3 D 5 E 4
  51. 51. Paired comparison method A B C D E Final Rank A - - - + + 3 B + - - + + 2 C + + - + + 1 D - - - - + 4 E - - - - - 5 No of Positive evaluation Total no. of evaluation * 100 = employee superior evaluation
  52. 52. Forced Distribution method 10% 20% 40% 20% 10% poor Below average average good Excellent No. of employees Force distribution curve
  53. 53. Field review method Performance subordinate peers superior customer Dimension Leadership ^ ^ Communication ^ ^ Interpersonal skills ^ ^ Decision making ^ ^ ^ Technical skills ^ ^ ^ Motivation ^ ^ ^
  54. 54. Performance criteria for executives <ul><li>For top managers </li></ul><ul><ul><li>Return on capital employed </li></ul></ul><ul><ul><li>Contribution to community development </li></ul></ul><ul><ul><li>Degree of upward communication from middle-level executives </li></ul></ul><ul><ul><li>Degree of growth and expansion of enterprise. </li></ul></ul>
  55. 55. For middle level managers <ul><li>Departmental performance </li></ul><ul><li>Coordination among employees </li></ul><ul><li>Degree of upward communication from supervisors </li></ul><ul><li>Degree of clarity about corporate goals and policies </li></ul>
  56. 56. For supervisors <ul><li>Quality and quantity of output in a given period </li></ul><ul><li>Labor cost per unit of output in a given period </li></ul><ul><li>Material cost per unit in a given period </li></ul><ul><li>Rate of absenteeism and turnover of employees </li></ul><ul><li>No of accidents in a given period </li></ul>