This document discusses performance appraisals, including what they are, their purpose, benefits, methods, and best practices. Performance appraisals are formal evaluations of an employee's job performance and contributions. They are used to provide feedback to employees, identify training needs, determine compensation, and plan career development. Some common methods include traditional approaches like rating scales and essays, as well as contemporary approaches like management by objectives and 360 degree feedback. The goal is to improve employee and organizational performance through open communication and goal setting.

1. Performance Appraisal – Part I.
Compensation & Performance
Management

2. What is performance Appraisal
 It is the process of evaluating the
performance of employees, sharing that
information with them and searching for
ways to improve their performance.

3. What does it involve?
Purpose
Empowerment
Relationship
Flexibility
Optimal
Performance
Recognitionand
Rewards
Morale

4. What is in it for
measuring the efficiency
maintaining organizational
control.
concrete and tangible
particulars about their work
assessment of
performance
mutual goals of the
employees & the organization.
growth & development
increase harmony & enhance
effectiveness
 Personal development
 work satisfaction
 involvement in the
organization.
Aims at:

5. Benefits of PA to..
Organization
 Recognize and manage staff performance
 Planning and decision making
 Improve staff retention
 Framework for sharing feedback
 Promote career planning for staff (Chandra & Frank, 2004)
 Feedback on own management style and leadership skills (Parkin & McKimm,
2009)
Appraisee
 Reflection on areas of weakness and strengths (Finlay & Mclaren, 2009)
 Opportunity to raise issues / obstacles
 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)

6. Advantages of PA?
provide a record of
performance over a
period of time.
provide an opportunity
for a manager to meet &
discuss performance
Provide the employee
with feedback about
their performance
Provide an opportunity
for an employee to
discuss issues and to
clarify expectations
Can be motivational
with the support of a
good reward and
compensation

7. Disadvantages..
• If not done right, they can create a NEGATIVE
EXPERIENCE.
• Performance appraisals are very time consuming
and can be overwhelming 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.

8. What are the PA benefits?
Performance improvement
Compensation adjustments
Placement decisions
Training & Development
needs
Career planning &
development
Identify deficiencies in
staffing process
Detect informational
inaccuracies
Diagnose job design errors
Avoidance of discrimination
External challenges

9. Errors of Appraisal
 Rater Errors
 Varying Standards
 Recency and Primary effects
 Central Tendency, Leniency and Strictness Errors
 Halo and Horns effects
 Similar-to-Me / Different-from-Me Errors

10. What are some concerns with PA?
Formal and informal
Whose performance?
Who are the raters?
What problems?
How to solve?
What to evaluate?
When to evaluate?
What methods?

11. THE PDCA Cycle
Plan
Do
Check
Act

12. Methods of Appraisal
Traditional Contemporary
1. Paired comparison
2. Graphic Rating scales
3. Forced choice
Description method
4. Forced Distribution
Method
5. Checks lists
6. Free essay method
7. Critical Incidents
8. Group Appraisal
9. Field Review Method
10.Confidential Report
11.Ranking
1. Assessment Center
2. Appraisal by Results or
Management by
Objectives
3. Human Asset
Accounting
4. Behaviorally Anchored
Rating scales

13. 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)

14. 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

15. 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
 This method mostly cares about the results achieved
(goals) but not to the way how employees can fulfill
them.

16. 360 Degree Performance Appraisal
 A method that employees will give confidential
and anonymous assessments on their managers,
colleagues, etc.
 Who are involved in the process?

17. Dos and Don’ts
 Focus on their actions, not on the person
 Be specific and timely
 Be calm
 Reaffirm your faith in the person
 Define positive steps
 Get over it
 Postpone interview when subordinate is not ready
― Allow subordinate to let off the steam when confronting
(Dessler, 2003)
― Allow subordinate to reflect on what has transpired (Sullivan &
Decker, 2005)
 Recognize your own limitation
― Seek help and do not expect to solve every problem by yourself
(Dessler, 2003)

18. How to handle the appraisal Session?
 Recognize denial is the first reaction of a subordinate with
poor performance
 Others react with anger and aggression
 Never attack a person’s defenses
―Concentrate on the act itself rather than on the
person (Dessler, 2003)
―Direct subordinate to focus on organizational
performance standards (Ellis, 2008)
• Maintain subordinate dignity (Rayner & Smith, 2009)
― Interview session to be done in private
― Provide constructive feedback

19. Good References
 Chandran, A., & Frank, D. Z. (2004). Utilization of Performance Appraisal
Systems in Health Care Organizations and Improvement Strategies for
Supervisors. The Health Care Manager, 23(1), 25-30.
 Dessler, G. (2003). Human Resource Management (9th ed.). New Jersey: Prentice
Hall.
 Dhami, R. 2010. Performance appraisal methods. Retrieved from
http://www.humanresources.hrvinet.com/performance-appraisal-methods/
 Lovering, C. (2006). The advantages of the peer review appraisal method.
Retrieved from http://smallbusiness.chron.com/advantages-peer-review-
appraisal-method-34573.html
 Rayner, C., & Smith, D.A. (2009). Managing and Leading People. London:
Chartered Institute of Personnel & Development.
 Sullivan, E. J., & Decker, P. J. (2005). Effective leadership and management in
nursing (6th ed.). New Jersey: Prentice Hall.