Performance appraisal (PA) refers to evaluating employee performance, potential, and personality. PA involves setting job standards, measuring performance against those standards, and providing feedback. It aims to provide coaching, improve performance, and facilitate employee development. However, PA can be prone to errors from biases and inconsistencies. An effective PA system requires clear objectives, job relevance, training, documentation, and participation.

1. Performance
Appraisal

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. Relationship between jab analysis
and performance appraisal:
Job analysis performance performance
standards appraisal
Translate job
Describes work Into levels of Describes the
& Personnel To acceptable Job relevant
Requirement Or unacceptable strengths and
performance weakness of
Of a particular
Each individual
job

4. Question arises?
 Why do we measure performance?
 Effective performance appraisal
systems
 How do we measure performance?

5. Characteristics
 It is a step by step process
 It examine the employee strengths and
weaknesses
 Scientific and objective study
 Ongoing and continuous process
 Secure information for making correct
decisions on employees

6. Needs and Objectives:
 Provide feedback about employees
 Provide database
 Diagnose the S & W of individuals
 Provide coaching, counseling, career
planning to subordinates
 Develop positive relation and reduce
grievance
 Facilitates research in personnel management

7. Appraisal Benefits (cont.)
 Appraisals offer
employees:
 Direction
 Feedback
 Input
 Motivation

8. Appraisal Benefits
 Appraisals offer the company:
 Documentation
 Employee Development
 Feedback
 Legalprotection
 Motivation system

9. Why Appraisals Are Important
•Recognize accomplishments
•Guide progress
•Improve performance

10. Why Important (cont.)
 Review performance
 Set goals
 Identify problems
 Discuss career advancement

11. Steps in performance appraisal
Establishing job standards
Designing an appraisal programme
Appraise performance
Performance interview
Use appraisal data
For appropriate purpose

12. Process of PA
Setting
performance
Taking corrective
standards Communicating
standards standards
Discussing Measuring
results standards
Comparing
standards

13. Issues in appraisal system
Formal and informal
What methods? Whose performance?
When to evaluate? Appraisal Design? Who are the raters?
What to evaluate? What problems?
How to solve?

14. What to evaluate? (Philip Model)
H Problem stars
children
Potential Social
Planned
separation citizen
L
L Performance H

15. How PA contribute to firm’s
competitive advantages
Improving
performance
Making correct
Values and behavior decision
Competitive
advantage
Minimizing dissatisfaction Ensuring legal
And turnover competence

16. Problems in performance appraisal
1. Errors In rating
 Halo effects
 Stereotyping
 Central tendency
 Constant error
 Personal bias
 Spill over effect

17. Problems in performance appraisal
(Cont’d)
2. Incompetence
3. Negative approach
4. Multiple objectives
5. Resistance
6. Lack of knowledge

18. Essentials of an effective appraisal system
 Mutual trust
 Clear objectives
 Standardizations
 Training
 Job relatedness
 Documentation
 Feedback and participation
 Individual differences
 Post appraisal review
 Review and appeal

19. Appraisals and Discrimination
 Title VII
 ADA
 Other fair employment
 Laws

20. Discrimination (cont.)
 Failure to communicate standards
 Failure to give timely feedback
 Failure to allow employees to correct
performance
 Inconsistency in measuring
performance
 Failure to document performance
objectively

21. Appraisal Forms
 Define performance expectations
 Describe measurement tools
 Use a rating system
 Cover specific examples
 Set measurable goals

22. Measure Performance
 Measurement systems need to be:
 Specific
 Fair
 Consistent
 Clear
 Useful

23. Measure Performance (cont.)
Systems can be:
 Numerical
 Textual
 Management by Objective (MBO)
 Behavior oriented

24. Document Performance
 Make sure documentation is objective
 Document performance of all
employees
 Provide complete and accurate
information
 Document performance on a regular
basis

25. Set Goals….
 Based on job requirements
 Realistic
 Measurable
 Observable
 Challenging
 Prioritized

26. Employee Input
 Employees take an active role:
 Setting goals
 Designing action plans
 Identifying strengths and weaknesses
 Employees participate in the PA meeting

27. Preparation
Employees:
 Review performance
 Think about new goals

28. Preparation (cont.)
Supervisors:
 Review performance
 Complete written appraisal
 Think about new goals
 Schedule time and place

29. Start the Meeting
 Lay out agenda
 Talk about money
 Encourage input
 Give good news first

30. During the Meeting
Review performance:
 Based on previous goals
 Noting strengths and accomplishments
 Identifying areas for improvement

31. Presentation Tips
 Focus on the professional
 Give objective examples
 Invite response
 Listen actively
 Create “we” mentality

32. During the Meeting (cont.)
 Set goals: Based on company goals
 Building on areas that need
improvement

33. End the Meeting
 Encourage good performance
 Lay out action plan
 Communicate outcome of goals not
met
 Confirm understanding

34. Continuous Feedback
 Formal appraisals
 Informal appraisals
 Open communication

35. Recognize Good Performance
 Verbal
 Public
 Tangible
 Monetary

36. Identify Poor Performance
 Act early
 Take the right approach
 Deal with employee reaction
 Handle continued poor performance

37. Discipline Poor Performance
 Recognize problems
 Talk with employee
 Follow company policy

38. Handle Hard Cases
 Reviewing highly emotional employees
 Rating former peers

39. Key Points to Remember
 You must conduct objective appraisals on a
scheduled basis.
 Appraisals tell employees how they’re doing and
how they can improve.
 Appraisals help create a system of motivation
and rewards based on performance.

40. Performance Appraisal Methods
 Individual Evaluation Methods
 Confidential report
 Essay evaluation
 Critical incidents
 Checklists
 Graphic rating scale
 Behaviorally anchored rating scale
 MBO

41. Critical Incident method
Ex: A fire, sudden breakdown, accident
Workers reaction scale
A informed the supervisor immediately 5
B Become anxious on loss of output 4
C tried to repair the machine 3
D Complained for poor maintenance 2
E was happy to forced test 1

42. Checklist method
•Simple checklist method
•Weighted checklist method
•Forced choice method
Simple checklist method:
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

43. Weighted checklist method
weights performance rating
(scale 1 to 5 )
Regularity 0.5
Loyalty 1.5
Willing to help 1.5
Quality of work 1.5
Relationship 2.0

44. Forced choice method
Criteria Rating
1.Regularity on the job Most Least
•Always regular
•Inform in advance for delay
•Never regular
•Remain absent
•Neither regular nor irregular

45. Graphic Rating Scale
• Continuous Rating Scale
• Discontinuous Rating Scale
Employee name_________ Deptt_______
Rater’s name ___________ Date________
------------------------------------------------------------------------
Exc. Good Acceptable Fair Poor
5 4 3 2 1 _
Dependability
Initiative
Overall output
Attendance
Attitude
Cooperation
Total score Continuous Rating Scale

46. Indifferent Enthusiastic
Attitude
No Interested Very
Interest enthusiastic
Discontinuous Rating Scale

47. BARS( behaviorally Anchored rating scale)
Step 1. Identify critical incidents
Step 2. Select performance dimension
Step 3. Retranslate the incidents
Step 4. Assign scales to incidents
Step 5. Develop final instrument

48. MBO Process
 Set organizational goals
 Defining performance target
 Performance review
 feedback

49. Performance Appraisal Methods
 Group Appraisal
 Ranking
 Paired comparison
 Forced distribution
 Performance tests Field review
technique

50. Ranking method
Employee Rank
A 2
B 1
C 3
D 5
E 4

51. Paired comparison method
A B C D E Final Rank
A - - - + + 3
B + - - + + 2
C + + - + + 1
D - - - - + 4
E - - - - - 5
No of Positive evaluation
Total no. of evaluation * 100 = employee superior evaluation

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

53. Field review method
Performance subordinate peers superior customer
Dimension
Leadership ^ ^
Communication ^ ^
Interpersonal skills ^ ^
Decision making ^ ^ ^
Technical skills ^ ^ ^
Motivation ^ ^ ^

54. Performance criteria for executives
 For top managers
 Return on capital employed
 Contribution to community development
 Degree of upward communication from
middle-level executives
 Degree of growth and expansion of
enterprise.

55. For middle level managers
 Departmental performance
 Coordination among employees
 Degree of upward communication from
supervisors
 Degree of clarity about corporate goals and
policies

56. For supervisors
 Quality and quantity of output in a given period
 Labor cost per unit of output in a given period
 Material cost per unit in a given period
 Rate of absenteeism and turnover of employees
 No of accidents in a given period