performance appraisal

1. Performance
Appraisal
System

2. Contents
 Planning performance appraisal system
 Types of performance appraisal system
 Problems with performance appraisal
 Essential characteristics of an effective
performance appraisal system

3. According to Newstrom,
“It is the process of evaluating the
performance of employees, sharing that
information with them and searching for
ways to improve their performance’’.

4. Tech Mahindra in its annual performance appraisal
process layoff bottom performers every year and this
year too. company, however, did not specify the number
of employees that could be asked to leave. However,
industry sources suggest that the number would run into
hundreds. At the end of December 2016, the company
had over 1.17 lakh employees. In an another incident the
US-based Cognizant had rolled out a voluntary separation
programme for directors, associate VPs and senior VPs,
offering them 6-9 months of salary.
The development comes at a time when Indian IT firms
are facing challenges in the business environment and stricter
work permit regime in countries like the US, Singapore, Australia
and New Zealand

5. • Goal:
Maintain Organizational Productivity
• Results:
Organization Productivity Individual Performance
• Methods:
Individual Performance Goals
Purpose of Performance Appraisal
System

7. Essential characteristics of an Effective
Performance Appraisal system
Explain The Appraisal Process
Clarify Job Expectations
Review and Update Job Skills
Review Accomplishments and Goals
Final Steps and Rewards

8. • Explain The Appraisal Process
In the meeting between a manager and employee, the manager should
first explain the purpose and the process of the performance appraisal.
Generally, a performance appraisal is conducted to clarify job
expectations, set goals for improvement of weaknesses and reward for
accomplishments and overall performance. The manager’s job is to
explain the steps involved during and after the performance appraisal.
• Clarify Job Expectations
A mutual understanding of the job expectations is essential to an
effective performance appraisal. Absent this, the appraisal meeting could
spiral downward because the manager and employee might be working
from completely different vantage points. A review of the job description,
and employee skills, qualifications and responsibilities should precede the
actual performance appraisal.
Essential characteristics of an Effective
Performance Appraisal system

9. ■Review and Update Job Skills
Review the employee’s beginning job skills, meaning what qualifications the employee had at the
start of the evaluation period one year ago. Discuss any improvements necessary and praise the
employee for skills that have improved during this time. Determine what additional skills the employee
can learn during the next evaluation period by setting reasonable goals for professional development.
The employee should feel free to provide input throughout the performance appraisal. Employers who
formally implement employee input often have an employee self-appraisal form. If this is the case, the
employee will come to the performance appraisal meeting with the completed self-appraisal.
■Review Accomplishments and Goals
Accomplishments throughout the evaluation year will be enumerated. If there are quantifiable goals
established for the review period, the manager and employee determine if the goals have been met.
Often, a “management by objective” technique is used to track specific goals, progress and
completion for each quarter. Using this technique simplifies the performance appraisal because there
are intermediate assessments made during the evaluation period.
■Final Steps and Rewards
An overall appraisal score may be discussed during the meeting or it may be calculated after the
manager has had an opportunity to consider the employee input. In addition, the manager should
indicate whether or not the employee will be entitled to an increase in pay or bonus, if applicable.
Many employers use a scale that determines a percentage increase for performance appraisal scores.
Whenever possible, the manager should inform the employee of the type or amount of increase to
expect for her performance during the year.

11. Opportunity to Regularly Discuss Results
Supervisor Identifies Strengths and Weaknesses
Fair and Equitable Format
Basis for Salary/Promotion Recommendations
Individual Rewards (Base and Incentive)
Feedback for Sub-Ordinate (Plus and Minus)
Recognition of Superior Performance
Documentation of Weak Performance
Personnel Decision-Making
Future Goal Commitments (Planned Achievementsa)
Objectives

12. Compensation "Pay for Performance"
Job Performance Improvements
Feedback to Subordinates
Documentation for Decisions
Goal Setting - Later Evaluation
Promotion Decisions
Identify Training Needs
HR Planning
Reasons for Appraisals

13. Planning performance appraisal system
Discussing results [Feedback]
Comparing actual performance with desired performance
Measuring the actual performance
Communicating the standards
Establishing performance standards

14. Comparing actual performance with desired performance
The actual performance is compared with the desired or the standard performance. The
comparison tells the deviations in the performance of the employees from the standards
set. The result can show the actual performance being more than the desired performance
or, the actual performance being less than the desired performance depicting a negative
deviation in the organizational performance. It includes recalling, evaluating and analysis
of data related to the employees’ performance.
Discussing results [Feedback]
The result of the appraisal is communicated and discussed with the employees on on e-to-
one basis. The focus of this discussion is on communication and listening. The results, the
problems and the possible solutions are discussed with the aim of problem solving and
reaching consensus. The feedback should be given with a positive attitude as this can
have an effect on the employees’ future performance. Performance appraisal feedback by
managers should be in such way helpful to correct mistakes done by the employees and
help them to motivate for better performance but not to demotivate. Performance feedback
task should be handled very carefully as it may leads to emotional outburst if it is not
handing properly. Sometimes employees should be prepared before giving them feedback
as it may be received positively or negatively depending upon the nature and attitude of
employees.

15. Establishing performance standards
The first step in the process of performance appraisal is the setting up of the standards which will be used to as
the base to compare the actual performance of the employees. This step requires setting the criteria to judge the
performance of the employees as successful or unsuccessful and the degrees of their contribution to the
organizational goals and objectives. The standards set should be clear, easily understandable and in
measurable terms. In case the performance of the employee cannot be measured, great care should be taken to
describe the standards.
Communicating the standards
Once set, it is the responsibility of the management to communicate the standards to all the employees of the
organization. The employees should be informed and the standards should be clearly explained to the
employees. This will help them to understand their roles and to know what exactly is expected from them. The
standards should also be communicated to the appraisers or the evaluators and if required, the standards can
also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.
Measuring the actual performance
The most difficult part of the Performance appraisal process is measuring the actual performance of the
employees that is the work done by the employees during the specified period of time. It is a continuous process
which involves monitoring the performance throughout the year. This stage requires the careful selection of the
appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the
process and providing assistance rather than interfering in an employees work. of employees.

16. Performance appraisal is the step where the
management finds out how effective it has been at
hiring and placing employees .
A “Performance appraisal” is a process of
evaluating an employee’s performance of a job in
terms of its requirements.

17. Primary Uses of Performance Appraisals
Small Organizations Large Organizations All Organizations
Compensation 80.2% 66.7% 74.9%
Performance improvement
46.3% 53.3% 48.4%
Feedback 40.3% 40.6% 40.4%
Documentation 29.0% 32.2% 30.2%
Promotion 26.1% 22.8% 24.8%
Training 5.1% 9.4% 7.3%
Transfer 8.1% 6.1% 7.3%
Discharge 4.9% 6.7% 5.6%
Layoff 2.1% 2.8% 2.4%
Personnel research 1.8% 2.8% 2.2%
Manpower planning 0.7% 2.8% 1.5%

18. Personal Bias
Halo Effect
Horn Effect
Lack of Uniform Standards.
Appropriate Appraisal Technique
Wrong Appraisal by Superiors
stress on Individual and not on Performance
Central Tendency
Lack of Importance to Self-Development :
Lack of Communication and Participation with Employees :
Time-Consuming and Huge Paperwork.
Problems with performance appraisal

19. Types of performance appraisal system
1. Assessment Center
2. Appraisal by
Results or
Management by
Objectives
3. Human Asset
Accounting
4. Behaviorally
Anchored Rating
scales
Traditional Methods Modern Methods
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

20. Thank
You