This document discusses performance appraisal systems used by organizations. It defines performance appraisal and explains that it is used for human resource planning, employee training and development, compensation, and assessing potential. Several common performance appraisal methods are described, including 360-degree feedback, rating scales, critical incidents, essays, rankings, and work standards. Limitations of performance appraisal like halo effects, central tendency, and personal bias are also outlined. Finally, characteristics of effective appraisal systems like using job-related criteria and continuous open communication are presented.

1. Presented by
Mohammad Asaduzzaman
ID 34006
An Evaluation of Performance Appraisal
System Followed by Organizations

2. Performance Appraisal has been defined as a systematic appraisal of
an employee by his/her supervising officer who is conversant with
the employee’s job performance. It is effective for the followings:
• Planning of Human Resource
• Employee Training and Development
• Employee Career Planning and Development
• Employee Compensation Programs
• Assessment of Employee Potential
• Supervisory Understanding
• Guide to job changes
Introduction

3. • Increase communication with subordinates
• Establish clear expectation
• Reinforce smart performance
• Improve failing performance of the worker
• Identify special skills
Why it is important?
Performance Appraisal (PA) is a vital management tool and a superior
motivation weapon.

4. Performance Appraisal Process

5. Performance Appraisal Methods
360-Degree Feedback Evaluation Method
The 360-degree feedback evaluation method is a popular performance appraisal
method that involves evaluation input from multiple levels within the firm as well as
external sources.
All people around the employee who may provide rating-
 senior managers
 the employee himself or herself
 supervisors
 subordinates
 team members
 internal or external customers

6. The rating scales method is a performance appraisal method
that rates employees according to defined factors.
Using this approach, evaluators record their judgments about
performance on a scale. The scale includes several categories,
normally 5–7 in number, defined by adjectives such as
outstanding, meets expectations, or needs improvement.
Rating Scales Method

7. Rating Scales Method cont

8. Critical Incident Method
The critical incident method is a performance appraisal method that
requires keeping written records of highly favorable and unfavorable
employee work actions.
When such an action, a “critical incident,” affects the department’s
effectiveness signi- ficantly, either positively or negatively, the manager
writes it down. At the end of the appraisal period, the rater uses these
records along with other data to evaluate employee performance.

9. Essay Method
The essay method is a performance appraisal method in which the rater writes a brief
narrative describing the employee’s performance. This method tends to focus on extreme
behavior in the employee’s work rather than on routine day-to-day performance.
some managers believe that the essay method is not only the most simple but also an
acceptable approach to employee evaluation.
Ranking Method
The ranking method is a performance appraisal method in which the rater ranks all employees
from a group in order of overall performance For example, the best employee in the group
is ranked highest, and the poorest is ranked lowest.

10. The work standards method is a performance appraisal method that
compares each employee’s performance to a predetermined standard or
expected level of output.
Standards reflect the normal output of an average worker operating at a
normal pace. Firms may apply work standards to virtually all types of jobs,
but production jobs generally receive the most attention. An obvious
advantage of using standards as appraisal criteria is objectivity.
Work Standards Method

11. Limitation of the performance appraisal:
1.Halo
A halo error happens once a manager generalizes one positive performance feature or
incident to any or all aspects of worker performance, leading to a better rating.
2. Central tendency
Central tendency error is an evaluation appraisal error that occurs when employees are
incorrectly rated near the average or middle of a scale
3.Personal Bias (Stereotyping)
4.Manipulating the Evaluation in terms of Race, Religion and nationality, gender, position

12. • Job-Related Criteria : Job-relatedness is perhaps the most basic criterion needed
in employee performance appraisals.
• Performance Expectations: Managers and subordinates should agree on
performance expectations prior to of the appraisal amount.
• Trained Appraiser : A common deficiency in appraisal systems is that the
evaluators rarely receive coaching on the way to conduct effective evaluations.
• Continuous Open Communication
Characteristics of an Effective Appraisal System

13. Appraisal system varies from organization to organization
according to the structure or hierarchy and jobs performed.
Appraisal plans need the rater to rate or score the worker on his
potential traits and characteristics and on his contributions.
Conclusion