This document discusses performance appraisals, including definitions, purposes, types of appraisals, and methods for conducting appraisals. It defines performance appraisal as the systematic evaluation of an employee's job performance and potential. Some key points covered include: - Performance appraisals are used to review past performance, provide feedback, and set goals. They inform human resources decisions like promotions and compensation. - Common appraisal methods include rating scales, essays, critical incident reports, checklists, and forced distribution. Each has strengths and limitations. - An effective performance appraisal process involves setting clear standards, collecting performance data, providing feedback interviews, and establishing future goals. Regular communication is important to avoid issues

1. [Business Communication]
[Company Name]
Performance Appraisal

2. DEFINITION
Performance appraisal
• According to Flippo, a prominent personality in
the field of Human resources, "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.  Provide a review of past work
performance.
 Establish lines of communication.
 Create an opportunity to discuss
professional development goals and
objectives.
NEED OF
PERFORMANCE EVALUATIONS

4. –Document employee performance.
–Document corrective action necessary to improve
work performance.
–It is the supervisor’s and manager’s responsibility
to monitor, evaluate and coach employees.

5. PURPOSES OF PERFORMANCE
APPRAISAL
• To review the performance of the
employees.
• To judge the gap between the actual and
the desired performance.
• To help the management in exercising
organizational control.
• To diagnose the training and development
needs of the future.

6. • Provide information to assist in the HR
decisions like promotions, transfers etc.
• Provide clarity of the expectations and
responsibilities of the functions to be
performed by the employees.
• To judge the effectiveness of the other
human resource functions.
• To reduce the grievances of the employees.
• Helps to strengthen the relationship and
communication between superior –
subordinates and management –
employees.

7. WORK RELATED OBJECTIVES
–To provide a control for
work done
–To improve efficiency
–To help in assigning work
and plan future work
assignment; and
–To carry out job
evaluation

8. CAREER DEVELOPMENT
OBJECTIVES
– To identify strong and weak points and
encourage finding remedies for weak
points through training;
– To determine career potential;
– To plan developmental( promotional or
lateral) assignments; and
– To plan career goals

9. OBJECTIVES OF COMMUNICATION
• To provide adequate feedback on
performance;
• To clearly establish goals, i.e what is
expected of the staff members in terms
of performance and future work
assignments;
• To provide counseling and job
satisfaction through open discussion on
performance and
• To let employees assess where they
stand within the organization in terms
of their performance.

10. ADMINISTRATIVE OBJECTIVES
• To attend as a basis for promotion or
demotion;
• To serve as a basis for allocating
incentives;
• To serve as a basis for determining
transfers ; and
• To serve as a basis for termination in case
of reduction of staff.

11. AIMS OF PERFORMANCE APPRAISAL
• Give employee feedback.
• Identify employee training need
• Document criteria.
• Form a basis for personnel: salary increases,
promotions, disciplinary actions, bonuses, etc.
• Provide the opportunity for organizational diagnosis and
development
• Facilitate communication
• Validate selection techniques and human resource
policies.

12. USE OF PERFORMANCE APPRAISAL
SYSTEM
Raises, Merit
Pay, Bonuses
Personnel
Decisions(
e.g.
promotion,
transfer,
dismissal)
Identification
of training
needs
Research
purposes

13. ELEMENTS OF PERFORMANCE
APPRAISAL
Setting performance
goals and objectives
Determining key
competencies
Measurement of
performance
against the goals
and objectives
Measurement of
performance
against key
competencies,
Feedback of
results.
Amendment to
goals and
objectives

14. CHARACTERISTICS OF EFFECTIVE
PERFORMANCE APPRAISAL
• The philosophy, purpose, and
objectives of the organization are
clearly stated so that performance
appraisal tools can be designed to
reflect these.
• The purposes of performance
appraisal are identified,
communicated, and understood.
• Job descriptions are written in such
a manner that standards of job
performance can be identified for
each job.

15. • The appraisal tool used is suited to the
purposes for which it will be utilized and is
accompanied by clear instructions for its use.
• Evaluators are trained in the use of the tool.
• The performance appraisal procedure is
outlined, communicated and understood.
• Plans for policing the appraisal procedure and
evaluating appraisal tools are developed and
implemented. Performance appraisal has the
full support of top management.
• Performance appraisal is considered to be fair
and productive by all who participate in it.

16. RESISTANCE ON THE PART OF
EVALUATOR BECAUSE:
• Performance appraisal demands
too much of supervisors efforts
in terms of time, paperwork,
and periodic observation of
subordinates’ performance.
• Supervisors do not fully
understand the purposes and
procedures of performance
appraisal.

17. • Supervisors lack skills in appraisal
techniques.
• Performance appraisal is not perceived as
being productive.
• Evaluator biases and rating errors.
• Lack of clear, objective standards of
performance.
• Failure to communicate purposes and
• Lack of suitable appraisal tool.
• Failure to police the appraisal procedure
effectively.

18. DEVELOP THE STANDARDS FOR
EVALUATION
Performance standards are:
• Based on the position, not the individual
• Observable, specific indicators of success
• Meaningful, reasonable and attainable
• Describe “fully satisfactory” performance
once trained
• Expressed in terms of quantity, quality,
timeliness, cost, safety or outcomes

19. SETTING OBJECTIVES
• Specific
• Performance oriented
• Realistic
• Observable

20. DATA COLLECTION
• Sources of performance information
– Personal observation
– Reports, documentation, correspondence. Etc.
– Feedback (internal and external)
– Periodic discussions with employee

21. Step by step Guide to Performance Appraisals
Develop performance standards
Setting goals and objectives
Data collection
Performance appraisal interview
Future goals and objectives
Follow up
Rewarding performance

22. Benefits of Performance Appraisal
Organization
• Recognize and manage staff performance
• Planning and decision making
• Improve staff retention
Appraiser
• Framework for sharing feedback
• Promote career planning for staff (Chandra & Frank, 2004)
• Feedback on own management style and leadership skills (Parkin &
McKimm, 2009)

23. Benefits of Performance Appraisal
Appraisee
• Reflection on areas of weakness and strengths (Finlay &
Mclaren, 2009)
• Opportunity to raise issues / complications
• Focus on developing individual performance
• Better understanding of goals and requirements
• Identify action plan for future development
• Indication for Salary increment / incentives (Parkin & McKimm,
2009)

24. Types of appraisal
Management By Objectives (MBO)
• A method in which managers or employers set a list
of objectives and make assessments on their
performance on a regular basis, and finally make
rewards based on the results achieved (Nandy, 2011)
• This method mostly cares about the results achieved
(goals) but not to the way how employees can fulfill
them.
360 Degree Performance Appraisal
• A method that employees will give confidential and
unidentified assessments on their colleagues. A
method that employees will give confidential and
anonymous assessments on their colleagues. It’s also
known as multi-rater feedback, multi source
feedback, or multi source assessment

25. Types of appraisal
Performance Ranking Method
• Used to assess the working performance of employees from the highest to lowest
levels
• Managers will make comparisons of an employee with the others, instead of making
comparison of each employee with some certain standards (Dhami, 2010)
Peer Review Appraisal
• A way to more effectively gauge the performance of employees by establishing
relevant evaluation criteria, using those best equipped to speak about individual’s
work to grade him / her accordingly
• Peer review can take the form of disciplinary panels or ongoing feedback between
co-workers (Lovering, 2006)
• This method helps to enhance employee trust and communication

26. Disadvantages of Performance Appraisal
• If not done right, they can create a NEGATIVE EXPERIENCE.
• Performance appraisals are very time consuming and can be
crushing to managers with many employees.
• They are based on human assessment and are subject to rater
errors and biases.
• They can create a very stressful environment for everyone
involved.

27. Assign to appraise
Higher Management
Performance
Appraisal
Change
in rating
Existing
state of
affairs

28. Approach in re-appraisal
Know your organization appraisal tools well
Analyze the objective and subjective data. To substantiate rating, get ready
the subordinate’s reference records such as incident reports, anecdotal
entries, etc. (Dessler, 2003).
Objective Data Subjective Data
Management by objectives (MBO)
Key Results Area (KRA)
Interview staff & previous appraiser in order to
find out the reason for their grievances
1) Personality clash with previous appraiser
2) Possible error in rating
3) Provide listening ear
Unreliable entries
Peer review - more accurate appraisal
(Nankervis, Compton & Baird, 2002)
(Raymond, 2009)

29. Review Employee’s Performance
Is there a problem?
No
Give feedback
as appropriateYes
Root causes
Skill Related
• Provide education
• Coach
• Simplify task
• Reassign
Motivation related
• Clarify expectation
• Determine obstacle and remove them
• Remove punishment
• Determine subordinate value regarding
rewards
(Sullivan & Decker, 2005)

30. Performance Appraisal : past-oriented methods
Rating scale
Confidential report
Essay evaluation
Critical incident method
Checklists
Forced choice method
Behaviorally anchored rating scale
Ranking
Paired comparison method
Forced distribution method
 Field review technique

31. Performance Appraisal : past-oriented methods
Rating scale
Confidential report
Essay evaluation
Critical incident method
Checklists
Forced choice method
Behaviorally anchored rating scale
Ranking
Paired comparison method
Forced distribution method
 Field review technique

32. 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

33. Example:
Employee name_________ Dept_______
Rater’s name ___________ Date________
_____________________________________________________________________
_________
Exc. Good Acceptable Fair Poor
______________________5_______4________3__________2______1________
___________
 Dependability
 Initiative
 Overall output
 Attendance
 Attitude
 Cooperation
__________________________________________________________________
_________

34. 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

35. 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

36. 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

37. 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

38. 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

39. 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

40. 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 routine for the supervisor
concerned who may be too busy or forget to do it.

41. 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

42. 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

43. 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.

44. 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

45. 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

46. Forced Distribution method
Example:
10% 20% 40% 20% 10%
poor Below
average
average good Excellent
No.
of
employees
Force distribution curve

47. 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

48. 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

49. 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

50. Conclusion
• There is NO ONE PERFECT appraisal tool
• Compilation record of positive or negative incidents are useful in
justifying PPA rating
• Appropriate communication skills used are REALLY essential
• Constant evaluation and feedback should be given to subordinate to
enhance expectation on performance and progress and to avoid
surprises during PPA.