This document discusses performance appraisal. It defines performance appraisal as evaluating individual job performance as a basis for personnel decisions. It notes that performance appraisal is important because it encourages employees to maintain desired behavior knowing their performance is monitored. The key processes in performance appraisal are establishing standards, setting goals, measuring performance, comparing to standards, discussing results with employees, and taking corrective action. The document also outlines various appraisal methods and sources, as well as common errors and how to overcome them.

1. PERFORMANCE
APPRAISAL
Patriana Z P.
Benliro

2. What is
performance?

3. Performance
Its Determinants & Obstacles
• Performance- refers to the effective and
efficient accomplishment of objectives.
• It may be stated in terms of levels:
excellent
outstanding
good
poor

4. Performance
Its Determinants & Obstacles
• It is the result of the efforts expended by
the employee and which is modified by
his abilities and his perception of his/her
role.
• Abilities eg. Language facility, finger
dexterity, etc.
• Role perceptions constitute the directions
in which the employee believes he should
exert his effort in doing his job.

5. Performance
Its Determinants & Obstacles
• Poor performance may be the result of
any or all of the following:
Employee
• Inadequate effort expended on the job;
• Lack of proficiency in doing the job
• Wrong role perception.

6. Performance
Its Determinants & Obstacles
Environmental Factors
• Conflicting demands on the employee’s
time
• Inappropriate work facilities &
equipment
• Restrictive policies that affect the job
• Lack of cooperation from co-employees
• Poor supervision

7. Performance
Its Determinants & Obstacles
• Poor performance may be the result of any
or all of the following:
Environmental Factors
• Inappropriate temperature in the workplace
• Poor lighting
• Noisy surrounding
• Improper shifting of the employee
• Unsafe premises

8. Performance
Its Determinants & Obstacles
Effort
Obstacles
Performance
Motivation
Role
Perception
Abilities
Figure 1. Determinants & Obstacles of Performance

9. What is
performance
appraisal?

10. What is Performance Appraisal?
It is the process of evaluating individual job
performance as a basis for making
objective personnel decisions.
It is alternately referred to as
• Employee rating
• Employee evaluation
• Performance review
• Performance evaluation
• Results appraisal

11. Importance of Performance Appraisal
• One reason why
employees tend to
maintain the desired
behavior is if they knew
that their performance
is monitored and
appraised.

12. Performance
Its Determinants & Obstacles
Individual Goals
Organizational
Goals
Performance
Performance
Evaluation
Process
Behavior
Figure 2. Behavior And Performance
Appraisal

13. Uses of Performance Appraisal
• The information generated from
Performance Appraisal is useful inputs in
making decisions involving:
– Compensation -financial reward
– Placement- decisions concerning promotion,
demotion, discharge
– Training and Development- potentials and
weakness of employees are needed for
identifying training & development needs.

14. Formal Performance Appraisal
• Performance Appraisal is formal if it uses a
systematic appraisal. Usually characterized
by the following:
• Managers & subordinates share understanding
about what has to be accomplished.
• Performance is measured using some techniques.
• Assessment of employee performance is done on
a regular basis such as every six months or every
year.
• During the assessment proceedings, the
employee is well aware that his performance is
being assessed.

15. Informal Performance Appraisal
• Informal appraisal is done
whenever the supervisor
feels the need for it.
• The assessment is usually
made during conversations
between superior and the
subordinate or on the spot
examination of the
subordinate’s output.

16. What are the processes
in performance
appraisal?

17. Process of Appraisal
• Establishment of performance
standards.
• Joint superior-subordinate setting of
measurable goals.
• Measurement of performance.
• Compare performance with standards.
• Discuss result appraisal with employee.
• When necessary, corrective action is
initiated.

18. Process of Appraisal
Establish
performance
standards
Joint superior-
subordinate setting of
goals
Measurement of
actual performance
Compare
performance with
standards
Relay result to
employee
Corrective action
initiated when
necessary

19. What are the methods
of performance
appraisal?

20. Methods of Appraisal
• Work standards approach
• Critical-incident appraisal
• Checklist
• Essay appraisal
• Graphic rating scale
• Behaviorally anchored rating scale
• Ranking methods
• Forced-choice rating
• Goal-setting or management by objectives
(MBO)

21. Methods of Appraisal
• Work standards approach
Involves setting a standard level of
output and then comparing every
employee’s performance with the
standard.
Disadvantage: There is difficulty in
comparing standards for the different
categories of job.

22. Methods of Appraisal
• Critical-incident appraisal
The evaluator keeps a record of
desirable and desirable incidents of each
employee.
Disadvantages:
-Recording the incidents covering all
employees is time consuming.
-There is much difficulty quantifying
critical incidents.

23. Methods of Appraisal
• Checklist
Item Yes No
1. Does the person scan records to
determine accounts due for collection
everyday?
/
2. Does the person make a routine check-up
of equipment under his care?
/
3. When a customer is unable to settle an
amount due, does the person make a follow-
up?
/
4. Does the person make a report right after
field collection?
/
5. Does the person volunteer to help other
employees?
/

24. Methods of Appraisal
• Essay Appraisal
The appraiser writes a narrative about
the person being appraised. The narrative
describes a person’s strengths,
weaknesses, past performance, potential,
etc.
Disadvantages:
-Writing abilities of appraisers differ.
-Difficult to compare.
-Difficult to quantify

25. Methods of Appraisal
• Graphic Rating Scale
Uses identified performance factors.
Eg. Quantity, quality of work, job
knowledge, dependability, attendance,
loyalty, etc. Rating scales are developed
making it easier to assess performance.
Disadvantages:
-It does not provide the depth of
information other methods do.

26. Methods of Appraisal
• Behaviorally-Anchored Rating Scale
Scale Values Attitude Toward Customers & Prospects
1-Unacceptable The salesclerk should be expected to ignore persons who
make inquiries.
2-Very Poor The SC show little interest in convincing prospect buyers.
3-Poor The SC listen to suggestions and complaints from customers.
4-Below Average The SC relay suggestions and complaints of customers.
5-Average The SC require some help in knowing the right approach to
customers.
6-Good The SC apply various procedures designed to make
customers feel free to communicate
7-Very good The SC make customers feel that they are important to the
company.
8-Excellent The SC regard customer an important link between them &
the company.

27. Methods of Appraisal
• Ranking Method
1. Alternation
From the list of employees to be evaluated,
the evaluator prepares another list where the
individual names are entered and arranged
according to their value or importance.
The method is useful if the list is short but
may encounter problems if the list is too long.
1. Paired Comparisons
2. Forced-Distribution

28. Methods of Appraisal
• Ranking Method
2. Paired Comparisons
The name of the employee is paired with
another and the evaluator determines who is
better employee.
Paired Comparison Results
_X _Gina vs. Anna ___ ___Anna vs. Donna___
___Gina vs.Juana___ X_Juana vs Dina ____
___Gina vs Donna___ ___Juana vs Diana___
Note: X mark indicates better employee.

29. Methods of Appraisal
• Ranking Method
2. Paired Comparisons
Name of Employee No. of times judged as
better employee
Rank
Gina 5 1
Anna 4 2
Juana 3 3
Dina 2 4
Donna 1 5
Diana 0 6

30. Methods of Appraisal
• Ranking Method
3. Forced-Distribution
The levels of performance Percentage
Does not meet expected results 15%
Meets expected results 70%
Exceeds expected results 15%

31. Methods of Appraisal
• Forced-Choice Rating
Sales supervisor evaluating the performance of a
sales clerk:
____ 1. is able to hold the interest of prospects
____ 2. performs product demonstrations with
confidence
____ 3. provides accurate information to
prospects
____ 4. prepares accurate sales report
____ 5. thinks generally in terms of items sold.
The rater must choose between two or more specific
statements about an employees work behavior

32. Goal Setting or MBO
MBO Steps
1.The employee and his superior jointly set
goals.
2.The employee tries to meet the goals.
3.Performance is evaluated against the goals.
4.The employee and superior jointly set new
goals for the next time period.

33. Goal Setting or MBO
Management By-Objectives (MBO)
Prerequisites:
1.The use of the participative style of
management.
2.Pinpointing which employee is
responsible for which results.
3.Providing performance feedback to
concerned employees.

34. Who are the sources of
performance
appraisal?

35. Sources of Performance Information
• Supervisors
• Peers
• Subordinates
• Self
• Customers

36. What are the errors of
performance
appraisal?

37. Errors in Performance Appraisal
• Halo Error
Result of evaluation of one trait
influences the evaluator in the assessment of
other traits.
• Single Criterion
Several tasks are evaluated on the basis
of a single criterion.
• Leniency Error
Evaluators use his or her own value
system in appraising the performance of
employees.

38. Errors in Performance Appraisal
• Central Tendency Error
All employees are rated within a narrow
range as if the performances of all
employees are equal or almost equal.
Performance No. of employees rated
Excellent 0
Above Average 10
Average 1, 246
Below Average 9
Poor 0

39. Errors in Performance Appraisal
• Recency Problem
Recent performance is given greater
weight than earlier performance.
Primacy Error/Problem
Early performance is considered more
important than later performance.

40. How do we overcome
errors in performance
Appraisal?

41. Overcoming Errors in Performance
Appraisal
• Using multiple criteria.
• Emphasizing behaviors rather than traits.
• Documenting performance behavior.
• Using multiple evaluators.
• Evaluating selectively.
• Training evaluators.

42. Summary
• Performance Appraisal is the process of
evaluating the job performance of each
employee or manager.
• Performance evaluation outputs are inputs of
decision-making, especially on matters
relation to promotion, transfer and retention
of employees.
• Appraisal is formal if it uses a systematic
appraisal system. It is informal if it is done
anytime the supervisor fells there is a need for
it.

43. Summary
• The steps in performance appraisal consist
of 1.)establishing performance standards,
2.)joint superior-subordinate setting of
measurable goals, 3. measuring
performance, 4. comparing performance
with standards, 5. discussing results of
appraisal with the employee and 6.
initiating corrective action when
necessary.

44. Summary
• Various methods of appraising consist of
work-standards approach, critical incident
appraisal, checklist, essay appraisal, graphic
rating scale, behaviorally anchored rating
scale, ranking method, force-d choice rating
and goal setting or management by
objectives.
• Sources of PA are supervisors, peers,
subordinates, self and customers.

45. Summary
• Appraisal Errors consist of halo error,
single criterion, leniency error, central
tendency error and recency problem.
• Overcoming errors in PA are using multiple
criteria, emphasizing behavior rather than
traits, documenting performance
behaviors, using multiple evaluators,
evaluating selectively and training
evaluators.