The document discusses performance appraisal, which is defined as a systematic and objective evaluation of an employee's job performance and abilities. It outlines several methods for conducting performance appraisals, including traditional methods like ranking, grading, and checklists as well as modern methods like management by objectives and 360-degree feedback. The purposes of performance appraisal are identified as determining pay, improving job performance, identifying training needs, and making promotion and termination decisions. Limitations and ethical considerations are also discussed.

1. PERFORMANCE APPRAISAL

2. Dr. Parveen Kaur NagpalPERFORMANCE APPRAISAL
Performance appraisal is a systematic and objective way of evaluating the
relative worth or ability of an employee in performing the job.
Performance appraisal is the review of an individual’s performance in an
orderly way, the performance is measured by considering factors like job
knowledge, quality and quantity of output, initiative, leadership abilities,
supervision, dependability, co-operation, judgment etc.
Thus performance appraisal is a process of assessing an employees job
relevant strengths and weaknesses.
According to Flippo, “Performance appraisal is the systematic, periodic and
an impartial rating of an employee’s excellence in the matters pertaining to
his present job and his potential for a better job.”

3. Dr. Parveen Kaur NagpalPERFORMANCE APPRAISAL
•Appraisal should be in writing and carried at least once a year.
•It should be shared with the employee.
•Employees should have a mechanism to appeal the results of the
performance appraisal.
•Evaluator should be trained to carry out the
appraisal process
•It should focus on employee behaviour and
results rather than on personal traits.

4. Dr. Parveen Kaur NagpalPURPOSE/ BENEFITS OF PERFORMANCE APPRAISAL
•Employee pay/ salary decision.
•Improving the quality of an employee in job performance.
•Minimizes the communication gap between the employer and employee.
•Promotion and Transfer decisions
•Identify training needs
•Discharging/ Lay off decisions
•Minimize as well as address employee grievances
•Ensures job satisfaction and increase morale
•Documentation (Evidence)
•Timely Review and Feedback for self development

5. Dr. Parveen Kaur Nagpal
LIMITATIONS OF PERFORMANCE APPRAISAL
•Halo Effect Primacy/ First Impression Effect
•Horn Effect Reluctant Employees
•Leniency or Strictness Tendency Problem of Appropriate Techniques
•Central Tendency Problem Partiality/ Personal Bias
•Similarity Error (similar to me) Fear of Confrontation
•Recency Effect
•Sampling Error
•Time Consuming
•Cost Factor

6. Dr. Parveen Kaur Nagpal
METHODS/ TECHNIQUES OF PERFORMANCE APPRAISAL
Traditional Methods
Confidential
Report
Narrative
Essay
Ranking
Method
Paired
Comparison
Grading
Method
Check List
Rating Scale
Forced Choice
Method
Critical Incident
Method
Modern Methods
Management by
Objectives (MBO)
Behaviorally Anchored
Rating Scale (BARS)
Assessment Centers
360 Degree Appraisal
Human Resource
Accounting

7. Dr. Parveen Kaur Nagpal
TRADITIONAL METHODS OF PERFORMANCE APPRAISAL
1. Confidential Report: The rater prepares a report on employees strengths
and weaknesses and record ratings w.r.t employees attendance, technical
ability, team work etc.
2. Narrative Essay: The manager describes employees performance over the
entire evaluation period by writing a narrative detailing the strength and
weaknesses
3. Ranking Method: An employee is ranked against the other in the working
group under this method.
Each employee be compared with the other person
This can be useful in small organization.

8. Dr. Parveen Kaur Nagpal
TRADITIONAL METHODS OF PERFORMANCE APPRAISAL
4. Paired Comparison Method: Each employee is compared with other
employees considering only one at a time. The evaluator compares two
employees and puts a tick mark against an employee whom he
considers better. It is suitable for big organizations.

9. Dr. Parveen Kaur Nagpal
TRADITIONAL METHODS OF PERFORMANCE APPRAISAL
5. Grading Method: Certain categories of abilities or performance of
employees are defined well in advance to fall in certain grades under
this method. Such grades may be O, A, B, C, D (Outstanding, Good,
Average, Poor and Very poor). Here the individual traits and
characteristics are identified.

10. Dr. Parveen Kaur Nagpal
TRADITIONAL METHODS OF PERFORMANCE APPRAISAL
6. Check List: The appraisal of the ability of an employee through getting
answers for a number of questions is called the method of check list.
These questions are related to the behavior of an employee.
Examples:
•Is the employee satisfied with the job? Yes/ No
•Does he finish the job accurately? Yes/ No
•Does he respect the superiors? Yes/ No
•Is he ready to accept responsibilities? Yes/ No
•Does he obey the orders? Yes/ No

11. Dr. Parveen Kaur Nagpal
TRADITIONAL METHODS OF PERFORMANCE APPRAISAL
7. Graphic Rating Scale: It is also known as linear rating scale. In this
method, the printed appraisal form is used to appraise each employee.
It lists traits and a range of job performance characteristics for each
trait. The rating is done on the basis of five points on the continuum.

12. Dr. Parveen Kaur Nagpal
TRADITIONAL METHODS OF PERFORMANCE APPRAISAL
8. Forced Choice Method: A method which forces the rater to distribute the
ratings of the overall performance of an employee is known as forced
distribution method. This method is suitable to large organizations, but
the individual traits cannot be appraised. Group wise rating is done.

13. Dr. Parveen Kaur Nagpal
TRADITIONAL METHODS OF PERFORMANCE APPRAISAL
9. Critical Incident Method: The performance appraisal of an employee is
done on the basis of the incidents occurred really to the concerned
employee.

14. Dr. Parveen Kaur Nagpal
MODERN METHODS OF PERFORMANCE APPRAISAL
1. Management by Objectives (MBO): Performance
is rated against the achievement of objectives
stated by the management. It is useful for
managerial positions and not applicable to all jobs
2. 360-degree Feedback: It is a systematic collection
of performance data on an individual group,
derived from a number of stakeholders like
immediate supervisor, team members, customers,
peers and self.

15. Dr. Parveen Kaur Nagpal
MODERN METHODS OF PERFORMANCE APPRAISAL
3. Assessment Centers: Involve the use of methods like social/informal
events, tests and exercises, assignments being given to a group of
employees to assess their competencies to take higher responsibilities in
the future. Trained evaluators observe and evaluate employees as they
perform the assigned jobs and are evaluated on job related
characteristics.
4. Human Resource Accounting Method: It tries to find the relative worth of
human assets in terms of money. Performance appraisal of the employees
is judged in terms of cost and contribution of the employees. Cost include
all the expenses incurred on them like their compensation, recruitment
and selection costs, induction and training costs etc. whereas their
contribution includes the total value added (in monetary terms).

16. Dr. Parveen Kaur Nagpal
MODERN METHODS OF PERFORMANCE APPRAISAL
5. Behaviorally Anchored Rating Scale (BARS): Measuring system which
rates employees or trainees according to their performance and specific
behavioral patterns. BARS is designed to bring the benefits of both
qualitative and quantitative data to the employee appraisal process by
comparing an individual’s performance against specific examples of
behaviour which are then categorized and appointed a numerical value
used as the basis for rating performance.

17. Dr. Parveen Kaur Nagpal

18. Dr. Parveen Kaur Nagpal
PROCESS OF PERFORMANCE APPRAISAL
Establishing Performance
Standards
Communicating The Standards
Measuring the Actual Standards
Comparing Performance with the
Standards
Discussing Results/ Post
Appraisal Interview
Corrective Measures
Review

19. Dr. Parveen Kaur Nagpal
GUIDELINES FOR CONDUCTING PERFORMANCE INTERVIEWS
• Proper Planning
• Efficient Evaluators
• Mutual Trust
• Clear Objectives
• Analysis of Strength and Weaknesses
• Proper Timing
• Timely Feedback
• Standardization
• Trained Evaluators
• Review and Appeal
• Individual Differences

20. Dr. Parveen Kaur Nagpal
ETHICAL ASPECTS IN PERFORMANCE APPRAISAL
I. Ethics on the Part of Appraiser / Rater
•Adequate Information
•Reliability
•Objective Evaluation
•Uniform Evaluation Criteria
•Laws and Regulations of Performance Appraisals
•Timely and Proper Feedback
•Communication
•Transparency

21. Dr. Parveen Kaur Nagpal
ETHICAL ASPECTS IN PERFORMANCE APPRAISAL
II. Ethics on the Part of Appraisee
•Correct Information: The appraisee must provide correct and adequate
information to the appraiser for proper conduct of performance appraisal.
•Avoid Confrontation: The ratee may avoid confrontation or be defensive if
he/ she receives unfavorable remarks from the rater.
•Attitude Towards Ratings: The employee should have positive attitude
towards the rating system.

22. Dr. Parveen Kaur Nagpal
CASE STUDY - PERFORMANCE APPRAISAL
Mr. Abeer Mehra is a talented and well experienced Human Resource
Manager of Trinity Company. He is an administrative expert and a change
agent, always an inspiration for his subordinates and the employees whose
performance is measured and appraised by him. It is because of his 10 years
of experience of working in HR department that he got acquainted with
various performance appraisal methods. However, he mainly rated his
employees in a fair manner using graphic rating scale. He commanded lot of
respect and faith from his employees due to his appropriate and fair
performance appraisal techniques.

23. Dr. Parveen Kaur Nagpal
CASE STUDY - PERFORMANCE APPRAISAL
However recently, he developed good rapport with Mr. Rohan Sehgal and Mr.
Ram Kapoor, who belonged to his native place. He suddenly started
appraising Rohan and Ram leniently. He promoted them unethically and the
other employees realized it. Some senior employees resigned as a result of
this.
Questions:
1. Analyze the case
2. What according to you should be the appropriate appraisal methods used
in organizations?
3. Discuss the ethical issues in performance appraisal w.r.t this case.

24. Dr. Parveen Kaur Nagpal
CASE STUDY - PERFORMANCE APPRAISAL
M/S Modern Department stores is having a chain of stores in leading cities
with its HQ at Bangalore. In Bangalore the store has 150 employees. This firm
follows graphic rating scale for performance evaluation. Annual performance
rating is the basis of increment, promotion, selection for training and posting to
attractive positions.
A number of representations were received by the MD in regard to the
subjectivity of the present assessment system.
MD interviewed 10 persons and all of them complained that they were denied
increment because of lesser rating where as many others who are less
qualified and less experienced got the increment because of better rating.

25. Dr. Parveen Kaur Nagpal
CASE STUDY - PERFORMANCE APPRAISAL
On further survey it is found that nearly one third of employees are unhappy
with the present rating system. At present there is no union activities but there
are strong rumours that the employees are thinking of forming a union.
Questions:
1. What are the problems you find in the present rating system of the
company? Put up your suggestions for improvement.
2. Can you propose a better alternate performance evaluation system?

26. Dr. Parveen Kaur Nagpal
CASE STUDY - PERFORMANCE APPRAISAL
Mr. Pinto of Yummy Ice-creams terminated Mr. D’mello, aged 46, from the
services. Mr Pinto argued that termination was based on his low performance.
However Mr. D’mello approached the Grievance Redressal Cell and finally the
court. The court asked Mr. Pinto to provide copies of Mr. D’mello’s poor
performance rating to justify the termination grounds. However in reality there
was no appraisal conducted at all.
Explain the advantages of conducting performance appraisal and maintaining
appropriate records

27. Dr. Parveen Kaur Nagpal
REFERENCES
1. Aswathappa, K., Human Resource Management: Text and cases. Delhi: Tata
McGraw-. Hill Publishing Company Limited, 2008
2. Gary Dessler, “A Framework for Human Resource Management”, Pearson
3. Nagpal, Human Resource Management, M. Com Part II, Sem 3, Sheth
Publishers

28. Thank You
Dr. Parveen Nagpal
www.linkedin.com/in/dr-parveen-kaur-nagpal-82965b15