Professional Documents
Culture Documents
Appraisal
Meaning
• Performance Appraisal is the process of
evaluating an employee’s performance of a
job in terms of its requirements. Performance
appraisal involves assessment of the actual
performance of an employee against what is
expected of him/her. Such assessment is the
basis for awarding promotions, effecting
transfers or assessing training needs.
• Performance Appraisal is the systematic
evaluation of the individual with respect to his
or her potential for development.
Objectives of Performance Appraisal
• To promote the employees, on the basis of performance and
competence.
• To identify the requirement for training and development of
employees.
• To provide confirmation to those employees who are hired as
probationary employees, upon completion of the term.
• To take a decision regarding the hike in employees pay, incentives etc.
• To facilitate communication between superior and subordinate.
• To help employees in understanding where they stand in terms of
performance.
• Data obtained from the appraisal of performance, are documented
and used for different organizational purposes.
PROCESS/ STEPS OF
PERFORMANCE
APPRAISAL
1.Establishing Performance Standards
•The appraisal process begins with the setting up of
criteria to be used for appraising the performance of
employees.
•The criteria is specified with the help of job analysis
which reveals the content of a job.
•This criteria should be clear, objective and in
writing.
•It should be discussed with the supervisors to
ensure that all the relevant factors have been
included.
•Who is to do the appraisal and how frequently
appraisal is to be done should also be decided.
2.Communicating the Standards
•The performance standards specified in the
first step are communicated and explained to
the employees so that they come to know
what is expected of them.
•The reactions of employees to the standards
should be obtained.
3.Measuring Performance
•Once the performance standards are specified and
accepted, the next stage is the measurement of actual
performance.
•This requires choosing the right technique of
measurement. identifying the internal and external
factors influencing performance and collecting
information on results achieved.
•Personal observations, written reports and-face-to-face
contacts are the means of collecting data on performance.
•The performance of different employees should be so
measured that it is comparable.
4. Comparing the Actual with the Standards
•Actual performance is compared with the
predetermined performance standards.
•Such comparison will reveal the deviations which
may be positive or negative. Positive deviations
occur when the performance exceeds the
standards. On the other hand, excess of standard
performance over the actual performance
represents negative deviation.
5.Discussing the Appraisal
•The results of the appraisal are communicated
to and discussed with the employees.
•Along with the deviations, the reasons behind
them are also-analysed and discussed. Such
discussion will enable an employee to know his
weaknesses and strengths. Therefore, he will be
motivated to improve himself.
6.Taking Corrective Actions
•Through mutual discussions with employees,
the steps required to improve performance
are identified and initiated.
•Training, coaching, counseling, etc. are
examples of corrective actions that help to
improve performance.
SEVERAL METHODS AND TECHNIQUES
are used for evaluating employee performance. They may be classified into
two broad categories :
a) Traditional Methods
i. Confidential Report
ii. Free Form or Essay b) Modern Methods
iii. Straight Ranking i. Assessment Centre
iv. Paired Comparisons ii. Human Resource
v. Forced Distribution Accounting
vi. Graphic Rating Scales
vii. Checklist Method
iii. Behaviorally
viii. Critical Incidents Anchored Rating Scales
ix. Group Appraisal iv. Appraisal through MBO
x. Field Review v. 360 Degree Appraisal
a) Traditional Methods
i. Confidential Report
• Used in most government organizations.
• A report is prepared by the employee’s immediate superior
which covers the strengths and weaknesses, main
achievements and failure, personality and behavior of the
employee.
• It is descriptive in nature
• Used mainly used for promotions and transfers of employees.
• Employee is not provided with the feedback. Therefore the
employees never get to know about his strengths and
weaknesses.
• The method focuses on evaluating rather than developing the
employee.
ii. Free form or Essay
• The evaluator writes a short essay on the
employee’s performance on the basis of overall
impression.
• The description should be factual and concrete.
• The drawback is that the method may involve
biasness as evaluation is not based on specific
performance dimensions related to the job.
• Another drawback is that quality of appraisal
depends on the writing ability of the evaluator
rather than on employee performance
iii. Straight Ranking
• In this method, the superior ranks his or her subordinates in the
order of their merit, starting from the best to the worst.
• Straight ranking is one of the oldest and Simplest methods.
• The ‘how’ and ‘why’ are not questioned, nor answered.
• The method only indicates how a person stands in relation to
others in the group but does not tell how much better or worse he
is than another.
iv. Paired Comparisons Method
• In this method one employee’s performance is compared
with that of the other employees. Two employees are
taken at a time and a decision is made on who is more
competent. Then another pair is compared and the same
process is repeated until all are compared and ranked.
• The number of times an employee is judged better
than the other determines his
• Comparison is made on the basis of overall performance.
The number of comparisons to be made can be
decided on the basis of the following formula:
N(N-1)/2
Checklist Method
• A checklist is a list of statements that describe the
characteristics and performance of employees on the
job.
• The rater checks to indicated if the behavior of an
employee is positive or negative to each statement.
• There are three types of checklists that can be used:
There are three types of checklist.
1.Simple Checklist
2. Forced Choice Block
3. Weighted Checklist
Critical Incident Method
• In this method the supervisor keeps a written record of critical
events and how different employee behaved during such
events. The rating of an employee depends on his
positive/negative behavior during these events
Field Review method
• In this method, cost of and contribution of human
resources are measured and compared.
• Cost of human resources include recruitment and
selection cost, induction and placement cost, training
and development cost, compensation and benefits
cost etc. and contributions include the value addition
made by the employee to the organization to further
the goals and objectives of the organization.
• Difference between cost and contribution will reflect
the performance of employees.
Behaviorally Anchored Rating Scale (BARS)
• This method combines graphic rating scales with critical incidents
method.
• It is designed to assess behaviors required to successfully perform a
job, where each job is likely to have several job dimensions and
separate scales are supposed to be developed for each.
• It defines the dimensions to be evaluated in behavioral terms and
uses critical events to anchor different performance levels.
• This method identifies incidents that are relevant to the
performance of jobs usually assisted by job analysis.
• Each job is then assigned a numerical value, which shows the
weight that is attached to it.
• These dimensions provide the criteria for assessing employees.
360 degree Method
• This method takes information from more than one source, that is,
superiors, subordinates, peers, customers and oneself in order to get a
360 degree view of an individual’s performance.
• For instance 360 degree evaluation of a manager involves evaluation
of a manager by everyone above, alongside and below him.
• Structured questionnaires are used to collect responses about a
manager from his bosses, peers and subordinates. Several parameters
relating to performance and behavior are used in the questionnaires.
• Each manager is assessed by a minimum of fifteen colleagues, at least
two of them being his bosses, four of them peers, and six of them
subordinates. The responses are presented collectively to the assess in
the form of charts and
Management by Objectives:
• This concept was given by Peter.F.Drucker, according to
him, the performance of an employee can be assessed on
the basis of the targets achieved by him as set by the
management of an organization.Firstly, the management
sets the goals and communicate the same to the
employees, and then the performance of an employee is
compared against these set goals and is evaluated on this
basis.In case the employee is not able to achieve the pre-
established goals, then management decides on a new
strategy or policy that should be undertaken for the
accomplishment of unattainable goals.
Advantages Of Performance Appraisals
1. Improves Performance.
Performance appraisals major focus on improving employees performance as it
analyses and evaluates the opportunity factors like social process and
technology.
2. Employee Development.
Performance appraisal helps determine who is in need of more training as it
gives information regarding the strengths and potentials as well as weaknesses
of the employees.
3. Corrects Deficiencies.
Performance appraisal detects employee deficiency and suggests on corrective
measures to be taken.
4. Career Growth.
Appraisal serves as a tool for the employees’ career planning and development
as it assists in preparing each employee’s SWOT analysis.
5. Promotion.
Appraisals help the management determine which employee is to be promoted,
transferred or rewarded.
6. Motivation.
Appraisals motivate employees to work harder.
LIMITATION OF
PERFORMANCE APPRAISAL
1. Halo effect :
• In this case the superior appraises the person
on certain positive qualities only.
• The negative traits are not considered.
• Such an appraisal will no give a true picture
about the employee.
• And in some cases employees who do not
deserve promotions may get it.
2. Problem of Leniency or Strictness
Many raters are too lenient (not strict) in their ratings. High scores may be given
to all employees, even if they have no merit. Also a reverse situation may take
place, where all employees are rated very strictly and very low scores are given.
3. Central Tendency
Sometimes a rater gives only middle range scores to all individuals. Extremely
high or low scores are avoided. This is called Central Tendency.
4. Personal Bias
Performance appriasal is affected by personal bias of the rater. If the rater has
good relations with the ratee (an employee who is getting rated), he may give
higher scores to the ratee, even though the ratee does not deserve such high
scores. So personal bias may lead to favoured treatment for some employees,
and bad treatment to others.
5. Paper Work
Some supervisors complain that performance appraisal is pointless paper work. They complain because
many times, performance appraisal reports are found only in the files. It does not serve any practical
purpose. In other words, the performance appraisal reports are not used by some organisations. They are
conducted just as a formality or for the name sake.
Performance appraisal may also affect superior-subordinate relations. An appraisal makes the superior more
of a judge than a coach. So, the subordinate may have a feeling of suspicion and mistrust, about the
superior.
7. Evaluate performance not person
The rater should evaluate the performance, i.e. output, new ideas, extraordinary efforts, etc. and not the
person. In reality, the person is evaluated and not his performance. It should be noted that failure is an
event and a not a person.
8. Horn Effect
Sometimes the raters may evaluate on the basis of one negative quality. This results in overall lower rating of
the particular employee. For e.g. "He does not shave regularly. Therefore, he must be lazy at work.“
The rating is also influenced by the most recent behaviour. The rater may ignore an average behaviour
during the full appraisal period