This document discusses various methods used for performance appraisal in organizations. It describes past-oriented methods like rating scales, confidential reports, essays and checklists that evaluate past performance. Future-oriented methods like management by objectives, 360-degree feedback, and assessment centers are aimed at setting goals and standards for future improvement. The document provides examples and limitations of different appraisal techniques to help organizations select the most appropriate method.
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2. Performance Appraisal
Performance Appraisal (PA) refers to all those procedures that are used to evaluate
the
personality
performance
potential of its group members
3. Why Appraisals Are Important??
Set goals
Set goals
Recognize performance
Guide progress
Identify problems
Improve performance
Recognize performance
Guide progress
Identify problems
Improve performance
Discuss career advancement
Discuss career advancement
4. Leads to competitive
advantage…
Improving
performance
Competitive
advantage
Making
correct
decisions
Ensuring
legal
compliance
Minimizing
dissatisfaction and
turnover
Strategy and
behavior
Values and
behavior
8. Future-oriented Methods
Management by objective
360o Feedback Method
Psychological Appraisals
Assessment Centre
9. Rating scale
The rating scale consist of several numerical scales, each representing a job
related performance criterion such as dependability, initiative, output,
attendance, attitude, co-operation and the like
11. Confidential Report
Descriptive report
Prepared by the employee’s immediate supervisor
The report highlights the strengths and weaknesses of employees
Prepared in Government organizations
Does not offer any feedback to the employee
12. Essay Evaluation Method
The rater is asked to express the strong as well as weak points of employee’s
behavior
The rater considers the employee’s :
Job knowledge and potential
Understanding of company’s programs, policies, objectives etc
Relation with co-workers and supervisors
Planning, organizing and controlling ability
Attitude and perception
13. Essay Evaluation
This method has the following limitations:
Highly subjective
Supervisor may write biased essay
Difficult to find effective writers
A busy appraiser may write the essay hurriedly without assessing properly
the actual performance of the worker
If the appraiser takes a long time it becomes uneconomical from the view
point of the firm
14. Critical Incident Technique
Manager prepares lists of statements of very effective and ineffective
behavior of an employee
These critical incidents represent the outstanding or poor behavior of the
employees
The manager periodically records critical incidents of employee’s behavior
15. Critical Incident Technique
Example:
June 21 - Sales clerk patiently attended to the customers complaint. He
is polite, prompt, enthusiastic in solving the customers’ problem
June 21 - The sales assistant stayed 45 minutes beyond his break during
the busiest part of the day. He failed to answer store manager’s call
thrice. He is lazy, negligent, stubborn and uninterested in work
16. Ex: A fire, sudden breakdown, accident
Workers reaction scale
A informed the supervisor immediately 4
B Become anxious on loss of output 3
C tried to repair the machine 2
D Complained for poor maintenance 1
17. Critical Incident Technique
Limitation of this technique are:
Negative incidents may be more noticeable than positive incidents.
Results in very close supervision which may not be liked by the employee.
The recording of incidents is a chore for the supervisor concerned who may be
too busy or forget to do it.
18. Checklist
Checklist contains a list of statements on the basis of which the rater
describes the on job performance of the employees
Example:
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
19. Behaviorally Anchored Rating Scale
BARS represent a range of descriptive statements of behavior varying from the least
to the most effective
In this a rater is expected to indicate which behavior on each scale best describes an
employee’s performance
20. Example:
Performance Points Behavior
Extremely good 7 Can expect trainee to make valuable suggestions for increased sales and to have
positive relationships with customers all over the country.
Good 6 Can expect to initiate creative ideas for improved sales.
Above average 5 Can expect to keep in touch with the customers throughout the year.
Average 4 Can manage, with difficulty, to deliver the goods in time.
Below average 3 Can expect to unload the trucks when asked by the supervisor.
Poor 2 Can expect to inform only a part of the customers.
Extremely poor 1 Can expect to take extended coffee breaks and roam around purposelessly.
21. Forced Choice Method
In the forced choice method the rater is forced to select statements which are
readymade
The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
Favorable qualities earn plus credit and unfavorable ones earn the reverse
22. Example:
Criteria Rating
1.Regularity on the job Most Least
Always regular
Inform in advance for delay
Never regular
Remain absent
Neither regular nor irregular
23. Forced Distribution method
Example:
10% 20% 40% 20% 10%
poor Below
average
average good Excellent
No.
of
employees
Force distribution curve
24. Paired comparison method
For several traits paired comparisons are made, tabulated and then rank is assigned
to each worker
No. of comparisons is calculated by the formula: N(N-1)/2
This method is not applicable when the group is large
25. Ranking method
The evaluator rates the employee from highest to lowest on some overall criteria. In this
“how” and “why” are not questioned nor answered
Employee Rank
A 2
B 1
C 3
D 5
E 4
26. Field Review Method
The appraiser goes to the field and obtains the information about work
performance of the employee by way of questioning the said individual, his peer
group, and his superiors
28. Management by Objectives (MBO)
First step: MBO emphasizes collectively set goals that are tangible, verifiable,
and measurable
Second step: setting the performance standard for the subordinates
Third step: the actual level of goal attainment is compared with the goals agreed
upon
Final step: involves establishing new goals and possibly new strategies for goals
not previously achieved
29. 360o Feedback Method
It is a systematic collection and feedback of performance data on an individual or
group, derived from a number of stakeholders
Data is gathered and fed back to the individual participant in a clear way designed to
promote understanding, acceptance and ultimately behavior
It makes the employee feel much more accountable
31. Psychological Appraisals
It focuses on the future potential of an employee
past performance or the actual performance is not taken into consideration
Evaluation is based on employee’s intellectual, emotional, motivational and other
related characteristics
32. Assessment Centres
An assessment centre is a central location where managers may come
together to have their participation in job-related exercises evaluated by
trained observers