This document provides an overview of performance appraisal and management systems. It discusses the need for performance appraisals to provide feedback, identify training needs, and inform personnel decisions. It also covers the differences between traditional appraisal and modern performance management, focusing on elements like frequency of reviews and emphasis on development versus evaluation. Finally, it lists some common limitations and problems with performance appraisals, such as bias, errors in judgment, and resistance from employees.

1. PERFORMANCE APPRAISALPERFORMANCE APPRAISAL
MANAGEMENT SYSTEMMANAGEMENT SYSTEM
PRESENTED BY:PRESENTED BY:
DIVYA SHARMADIVYA SHARMA
(MBA SOMG)(MBA SOMG)

2. TOPICS INCLUDED:
INTRODUCTION.
NEED OF PERFORMANCE APRRAISAL.
PERFORMANCE APRRAISAL Vs PERFORMANCE
MANAGEMENT.
MODEL.
PROCESS.
METHODS OF APRRAISALS.
DIFFERENCE BETWEEN TRADITIONAL APRRAISAL &
MORDERN APRRAISAL.
LIMITATIONS.

3. INTRDUCTIONINTRDUCTION
Performance appraisalPerformance appraisal, also known as, also known as
employee appraisalemployee appraisal, is a method by which the, is a method by which the
job performancejob performance of anof an employeeemployee is evaluatedis evaluated
(generally in terms of(generally in terms of qualityquality,, quantityquantity,, costcost andand
timetime). Performance appraisal is a part of career). Performance appraisal is a part of career
development.development.
According to CIPD(U.K.)-”The 21According to CIPD(U.K.)-”The 21stst
centurycentury
organisation is one in which people really are theorganisation is one in which people really are the
greatest asset, and people management needs togreatest asset, and people management needs to
go beyond lip service to become a corego beyond lip service to become a core
competence of every organisation.”competence of every organisation.”

4. NEED OF PERFORMANCENEED OF PERFORMANCE
APPRAISALAPPRAISAL
Give feedback on performance toGive feedback on performance to
employees.employees.
Identify employee training needs.Identify employee training needs.
Document criteria used to allocateDocument criteria used to allocate
organizational rewards.organizational rewards.
Form a basis for personnel decisions:Form a basis for personnel decisions:
salary increases, promotions, disciplinarysalary increases, promotions, disciplinary
actions, etc.actions, etc.

5. ..
Provide the opportunity for organizationalProvide the opportunity for organizational
diagnosis and development.diagnosis and development.
Facilitate communication betweenFacilitate communication between
employee and administratonemployee and administraton
Validate selection techniques and humanValidate selection techniques and human
resource policies to meet federal Equalresource policies to meet federal Equal
Employment Opportunity requirementsEmployment Opportunity requirements

6. DIFFERENCE BETWEENDIFFERENCE BETWEEN
PERFORMANCE APPRAISALPERFORMANCE APPRAISAL
 Top down assessment.Top down assessment.
 Annual appraisal meeting.Annual appraisal meeting.
 Use of rating.Use of rating.
 Monolithic system.Monolithic system.
 Focus on quantified objectives.Focus on quantified objectives.
 Often linked to pay.Often linked to pay.
 Bureaucratic- complex paperwork.Bureaucratic- complex paperwork.
 Owed by the HR department.Owed by the HR department.
PERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENT
 Joint process through dialogue.Joint process through dialogue.
 Continuous review with one or moreContinuous review with one or more
formal reviews.formal reviews.
 Rating less common.Rating less common.
 Flexible process.Flexible process.
 Focus on value and behaviors as wellFocus on value and behaviors as well
as objectives.as objectives.
 Less likely to be direct link to pay.Less likely to be direct link to pay.
 Documentation kept to be minimum.Documentation kept to be minimum.
 Owed by line managers.Owed by line managers.

7. MODEL OF PERFORMANCEMODEL OF PERFORMANCE
APPRAISALAPPRAISAL

8. Process of performance appraisalProcess of performance appraisal
MEASURING ACTUAL
PERFORMANCE
COMPARING
WITH STANDARDS
SETTING PERFORMANCE
STANDARDS

10. Methods of performance appraisalsMethods of performance appraisals
Essay appraisal :Essay appraisal :
Narrative description of the employee strengthNarrative description of the employee strength
,weakness, past performance and suggestions for,weakness, past performance and suggestions for
improvement in rater’s own words.improvement in rater’s own words.
Critical incident appraisal :
KKey behavior of an employee like “aggressive” orey behavior of an employee like “aggressive” or
“imaginative” or “relaxed" but does not tell anything about how“imaginative” or “relaxed" but does not tell anything about how
well the job has been done.well the job has been done.
Checklist :Checklist :
EEvaluator uses a list of “behavioral description", goes down thevaluator uses a list of “behavioral description", goes down the
list and give yes or no responses. he checks and ticks thelist and give yes or no responses. he checks and ticks the
items.items.
Graphic rating scale :Graphic rating scale :
The assessor goes down the list of factors and notes thatThe assessor goes down the list of factors and notes that
point along the scale that best describe the employee.point along the scale that best describe the employee.

11. Cont…
Forced choice:Forced choice:
AAmong the mentioned statements the rater have to make choicemong the mentioned statements the rater have to make choice
which statement is most descriptive of the individual being evaluated.which statement is most descriptive of the individual being evaluated.
Behaviorally anchored rating scaleBehaviorally anchored rating scale
( BARS) :( BARS) :
TThese scales are descriptions of various degrees of behaviorhese scales are descriptions of various degrees of behavior
relating to an aspect of performance dimension.relating to an aspect of performance dimension.
Ranking method :Ranking method :
Under this method a man is compared with all the otherUnder this method a man is compared with all the other
employees without any specific factors.employees without any specific factors.

12. Cont…Cont…
Confidential report:Confidential report:
It is a descriptive appraisal involves a lot of subjectivityIt is a descriptive appraisal involves a lot of subjectivity
because it based on impressions rather than on data.no feedbackbecause it based on impressions rather than on data.no feedback
is provided to the employee being appraised.is provided to the employee being appraised.
Group appraisal method:Group appraisal method:
A group of evaluators assesses the employee. Personal bias isA group of evaluators assesses the employee. Personal bias is
minimized due to multiple evaluators, but it is consuming method.minimized due to multiple evaluators, but it is consuming method.
Field review method:Field review method:
Under this method ,the line manager do not themselves fillUnder this method ,the line manager do not themselves fill
up the rating form .instead representatives from the personnelup the rating form .instead representatives from the personnel
departement come to the shop floor and interview the supervisorsdepartement come to the shop floor and interview the supervisors
to obtain information about their employees.to obtain information about their employees.

13. Cont…
Assessment centre method:Assessment centre method:
A group of employees is drawn from different work units.A group of employees is drawn from different work units.
They work together on an assignment . The employees areThey work together on an assignment . The employees are
evaluated both individually and collectively, under this methodevaluated both individually and collectively, under this method
,job related characteristics are evaluated to determine employee,job related characteristics are evaluated to determine employee
potential for promotion.potential for promotion.
Human resource accounting method:Human resource accounting method:
Competent and well trained employees are a valuable asset ofCompetent and well trained employees are a valuable asset of
an organization. Performance is judged in terms of costs andan organization. Performance is judged in terms of costs and
financial gains.financial gains.
Appraisal by objectives:Appraisal by objectives:
Employees are evaluated by how well they accomplish aEmployees are evaluated by how well they accomplish a
specific set of objectives that have been determined for their job.specific set of objectives that have been determined for their job.
This method is also known as management by objectives(MBO).This method is also known as management by objectives(MBO).

14. Difference between traditional and modernDifference between traditional and modern
performance appraisal methodsperformance appraisal methods
CATEGORIES TRDITIONAL
APPRAISAL
SYSTEMATIC
MORDERN
APPRAISAL
Guiding values Individualistic, control
oriented,documentory
Systematic,
Developmental,
problem solving.
Leadership styles Directional,
evaluative
Facilitative, coaching.
Frequencies Occasional. Frequent.
Formalities High Low
Reward Individualistic. Grouped,
organizational.

15. LIMITATIONS /PROBLEMS OFLIMITATIONS /PROBLEMS OF
PERFORMANCE APPRAISALPERFORMANCE APPRAISAL
Clarity of standards.Clarity of standards.
Problems of bias.Problems of bias.
Excessive leniency or strictness.Excessive leniency or strictness.
Halo error.Halo error.
Influence of a man’s job.Influence of a man’s job.

16. Cont…Cont…
Recency error.Recency error.
Similarity error.Similarity error.
Stereotyping.Stereotyping.
Central tendency.Central tendency.
Discrimination.Discrimination.

17. CONT..CONT..
Incompetence.Incompetence.
Negative approach.Negative approach.
Resistance.Resistance.
Mere formality.Mere formality.
Varying standards.Varying standards.
Contrast error.Contrast error.