Methods of Performance Appraisal

Approaches to Appraisal can be

classified into
1.Past-oriented method
2.Future-oriented method
 Past-oriented methods
 Rating scale
 Checklists
 Forced choice
 Forced distribution
 Critical incident
 BARS
 Field review
 Tests and observations
 ACRS
 Essay
 Cost Accounting
 Comparative Evaluation Method
 Future-oriented methods
 MBO
 360 Appraisal
 Psychological appraisals
 Assessment centres
 Rating scale
 Simplest and most popular technique
 A form is used to evaluate the performance of the
employees

 Consists of several numerical scales

 Each scale ranges from excellent to poor.
 Each scale representing a job-related performance
such as dependability,
initiative, output,attendance,attitude,
co-operation etc.
 Rating Scales
Attitude
0 5 10 15 20

No interest Careless: Interested in Enthusiastic Enthusiastic

In work: In-different work: Accepts about job & opinions &
consistent Instructions opinions & fellow-workers advice sought
complainer advice of by others
others

Decisiveness
0 5 10 15 20

Slow to Take decisions Takes Take decisions Take decisions

take after careful decisions in consultation without
decisions consideration promptly with others consultation
whose views he
values
 Checklist

 A checklist is a set of objectives or descriptive statements

about the employee and his behavior.

 Under weighted checklist, value of each question may be
weighted.
 Example:
 Is the employee really interested in the task assigned?
Yes / No
 Is he respected by his colleagues? Yes / No
 Forced Choice Method

 This method uses several sets of paired phrases, two of

which may be positive and two negative

 The rater is asked to indicate which of the four phrases is

the most and least descriptive of a particular worker

 Favorable qualities earn plus credit and unfavorable ones

earn the reverse

 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
 Forced Distribution Methods

 The rater is asked to appraise the employee according to

predetermined distribution scale.
 Two criteria used for rating are: job performance and
promotability.
 A five point performance scale is also used without mentioning
any descriptive statements.
 The worker is placed between two extremes of “good” and “bad”
performance.
 Forced distribution method

No.
of 40% 20%
10% 20% 10%
employees
poor Below average good Excellent
average

Force distribution curve

 Critical Incident Technique

 Manager prepares lists of statements of very effective

and ineffective behavior of an employee

 These critical incidents represent the outstanding or

poor behavior of the employees

 The manager periodically records critical incidents of

employee’s behavior
 Critical Incident Technique

Example:
 July 20 - Sales clerk patiently attended to the customers
complaint. He is polite, prompt, enthusiastic in solving the
customers’ problem
 July 20 - The sales assistant stayed 45 minutes beyond his
break during the busiest part of the day. He failed to answer
store manager’s call thrice. He is lazy, negligent, stubborn
and uninterested in work
 Critical Incident Technique

 Limitation of this technique are:

 Negative incidents may be more noticeable than positive incidents.
 Supervisors have a tendency to unload a series of complaints about
incidents.
 Results in very close supervision which may not be liked by the
employee.
 The recording of incidents may be a chore for the manager concerned
who may be too busy or forget to do it.
 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
Behaviorally Anchored Rating Scale

Combination of rating scale and critical incidence

 Steps:
 Collect critical incidents
 Identify performance dimensions
 Reclassification of incidents
 Assigning scale values to incidents
 Producing the final instrument
 Behavioral Anchored Rating Scales
Performance Points Behavior
Extremely good 7 Can expect trainee to make valuable suggestions for
increased sales and to have positive relationships with
customers all over the country.

Good 6 Can expect to initiate creative ideas for improved sales.

Above average 5 Can expect to keep in touch with the customers

throughout the year.
Average 4 Can manage, with difficulty, to deliver the goods in
time.
Below average 3 Can expect to unload the trucks when asked by the
supervisor.
Poor 2 Can expect to inform only a part of the customers.

Extremely poor 1 Can expect to take extended coffee breaks & roam
around purposelessly.
 Field Review Technique

 The appraiser goes to the field and obtains the information

about work performance of the employee by way of

questioning the said individual, his peer group, and his

superiors
 Field review method
Performance subordinate peers superior customer
Dimension

Leadership ^ ^

Communication ^ ^

Interpersonal skills ^ ^

Decision making ^ ^ ^

Technical skills ^ ^ ^

Motivation ^ ^ ^
 Tests and Observations
 Employee assessment may be based upon a
test of knowledge or skills.
 Test may be of paper and pencil or an
actual demonstration of skills.
performance tests are apt to measure
potential more than actual performance
 Confidential Report

 Prepared at the end of the year

 Prepared by the employee’s immediate supervisor

 The report highlights the strengths and weaknesses of

employees
 Prepared in Government organizations

 Does not offer any feedback to the employee

 Essay Evaluation

 The rater is asked to express the strong as well as weak

points of employee’s behavior
 The rater considers the employee’s :
 Job knowledge and potential
 Understanding of company’s programs, policies, objectives etc
 Relation with co-workers and supervisors
 Planning, organizing and controlling ability
 Attitude and perception
 Essay Evaluation

 This method has the following limitations:

 Highly subjective
 Supervisor may write biased essay
 Difficult to find effective writers
 A busy appraiser may write the essay hurriedly without
assessing properly the actual performance of the worker
 If the appraiser takes a long time it becomes uneconomical
from the view point of the firm
 Specimen of Staff Assessment Form [Descriptive Essay Type]

Staff Appraisal
Name . . . . . . . Job Title . . . . . . .
Department . . . . . . . . . . . . Date of Review . . . . . . .
Age . . . . . .. . Years in present job
Section I Appraisal Of Performance
Note to Appraiser
1.Appraisal must cover the period of the preceding 12 months
2.Consideration to every function & responsibility of the job
3.An objective factual assessment of an employee’s improvement or deterioration

Section II Promotability & Potential

Promotability
1.Promotion now
2.Within 2 years
3.Within 5 years
4.Unlikely to qualify for promotion
Section III Career Development
Section IV Notes on Interview with employee

Section V Comments on & Endorsement by Reviewing Authority

 Cost Accounting
 Evalutes performance from monetary returns
the employee yields.
 It establish relationship b/w the cost included in
keeping the employee and the
benefit the firm derives from him or her.
then evaluates according to the relationship b/w
cost and benefit
 Comparative Evaluation Methods

Ranking method
 The evaluator rates the employee from highest to lowest on
some overall criteria

Paired comparison method

 Each worker is compared with all other employees in a group
 For several traits paired comparisons are made, tabulated and
then rank is assigned to each worker
 This method is not applicable when the group is large
 Ranking employees by paired comparison Method

For the Trait “Quality of For the Trait “Creativity”

work”

Person rated Person rated

As compared to A B C As compared to A B C
- + +

+ A + + A + - +
+ - +
+
- - B
- B - + - - - + -

+ + C -
+ C + - + + - -
 Management by Objectives (MBO)

 MBO emphasizes collectively set goals that are

tangible, verifiable, and measurable

 Focuses attention on goals rather than on methods

 Concentrates on Key Result Areas (KRA)

 Systematic and rational technique that allows

management to attain maximum results from available

resources by focusing on achievable goals

 Key Elements Of MBO

 Arranging organizational goals in a means-ends chain

 Engaging in joint goal setting
 This process has the following steps:
 Identify KRAs
 Define expected results
 Assign specific responsibilities to employees
 Define authority and responsibility relationship
 Conducting periodic progress review
 Conducting annual performance review
 Psychological Appraisals
 Psychologists are used for evaluations
 They assess individual’s future potential and not past
performance.
 It consist of in-depth interviews,
psychological tests ,discussion with supervisors and a
review of other evaluations

 Psychologist writes an evaluation of employee’s

intellectual,emotional,motivational
and other –related characteristics.
 Cont…
 The evaluation is done for considering persons
for specific job
 This approach is slow and costly.
 Also the quality of the appraisal depends
largely on the skills of the psychologists.
 Assessment Centres
 Used for evaluating executive or supervisory potential.
 A central location where managers come together
inorder to participate in job related exercises.
 Evaluated by trained observers.
 Assessees are requested to participate in
in-basket exercises,work groups,computer
simulations,role paying
 Cont…

 It helps to evaluate communication ability,

Planning and organisational ability,
self-confidence,resistance to stress,energy level
decision-making,sensitivity to the feelings of
others,administrative ability,
creativity,mental alertness
360 Appraisal
0
 Introduction to
3600 Appraisal
360 - Degree Appraisal is a system or process in
which employees receive confidential, anonymous
feedback from the people who work around them.
 What are 3600 Measures ?
 360 degree measures behaviors and competencies.

 360 degree addresses skills such as listening, planning,

and goal-setting.

 360 degree focuses on subjective areas such as

teamwork character, and leadership effectiveness.

 360 degree provides feedback on how others perceive an

employee.
The Concept
 Participants
 Superiors
 Subordinates
 Peers/Colleagues
 Direct Reports
 Customers
 Self
 Advantages
To the individual: To the team:
Helps individuals to understand how Increases communication.
others perceive them. Higher levels of trust.
Better team environment.
Uncover blind spots. Supports teamwork.
Increased team effectiveness.
Quantifiable data on soft skills.

To the organization:
 Reinforced corporate culture by linking survey
items to organizational leadership competencies
and company values.

 Better career development for employees

 Improves customer service by involving them.

 Disadvantages
It is the most costly and time consuming type of appraisal.

These programs tend to be somewhat shocking to managers at

first.

The problems may arise with subordinate assessments.

The organization implementing this type of performance appraisal

must clearly define the mission and the scope of the appraisal.

Organizations must consider other issues like safeguarding the

process from unintentional respondent rating errors.
Companies using 3600 Performance Appraisals.

Bell Atlantic
Bell-Core (1980)
International Ltd IBM (1980)
(1998)

Johnson & Johnson Xerox (1980s)

Ltd (1980s)
Wipro Technologies
Ltd (Dec17th 2002)
Any Questions ???

Thank You