APPRAISING AND

MANAGING
PERFORMANCE

DISCUSSANT: MYLENE S. GOJAR

Employee Performance Appraisal
Employee performance appraisal is a staple part of the human resource
management function by which the past or current job of an employee is
reviewed, evaluated, and eventually kept on file as evidence to support
management’s future actions and decisions. It consists of regular
criteria and organizational goals.

Typically, performance appraisal is conducted annually or every six

months or maybe every quarter, or in a shorter cycle such as weekly or
bi-weekly. It involves the following:
Establishing job criteria
Comparing and measuring actual performance vs. job criteria
Communicating results to employees
The Purposes of Performance Appraisal
A central reason for the utilization of performance appraisal is measuring,
correcting, and improving employee work performance. It can also be used as
a basis for employment decisions such as promotion, termination, transfers,
and demotion. However, there are two basic reasons for the use of a
performance appraisal that are favorable to both organizations and employees:

1. As an administrative tool. Performance appraisal or performance review is

relevant to other HR roles specifically in promotions, demotions, and re-
assignments. It is also essential to human resource planning especially in
anticipating the changing needs relating to the acquisition and placement of
employees. Above all, results of the performance appraisals, are used to
synchronize practically all HRM practices like designing training programs
and helping assess pay rates.
2. As a development-oriented tool. Performance review is seen
helpful in feed backing performance evaluation results,
pinpointing employees’ strengths, and weaknesses, and
acknowledging their training needs. From here, organizations can
already envision opportunities to take advantage of the strong
points of employees and at the same time correct their
weaknesses. Without regard to the employee’s level of
performance, the appraisal system gives employers and employees
the chance to deliberate ways to capitalize on their strengths,
remove probable deficiencies, point out difficulties, and create
new goals and objectives for attaining high level of performance.
Fundamental Points to Consider in Creating Performance Criteria
1.Relevance to company strategic goals. This is the degree to which
performance criteria relate to organizational goals. This means that if the
developmental strategy of a certain company is set in a standard that 90%
of training activities are accomplished in a year, then it is relevant for the
training specialist to comply with the standard in response to the set
criteria.
2.Failure to include an important aspect of a performance standard.
Another important point in setting performance standard is the degree to
which these standards cover the entirety of an individual’s responsibilities.
If only a single criterion is measured and failed to include other measurable
and relevant performance measures, then there is criterion deficiency.
Hence, the more deficiencies there are, the more irrelevant the criterion
becomes.
3. Inclusion of a “should have not been there” criterion. This means that
the performance criteria to be reviewed have been manipulated; hence,
performance results were wrongly influenced by a criterion measure “that
should have not been there”. For example, a manager cannot include
“productivity output” as an indicator of good performance for production
employees who handle old machines to others with modern ones.

4. Reliableness. This pertains to the stableness and uniformity of a standard

or the degree to which employees sustain a given level of performance over
a period. This can be measured by associating two sets of ratings done by
only one rater or by two different raters. For instance, two supervisors
would evaluate the same employee and assess his or her fitness for a salary
increases. Their evaluation would then be subject to comparison to
determine its reliability.
Evaluating Employee Performance
If there are numerous criteria to measure performance, there are also lots of
employees subject to appraisal. Evaluations is typically done by managers and
departmental heads, self, peers, and subordinates, and at times, through a 360-degree
feedback. Each is approximately helpful for both administrative and developmental
reasons.

1. Managers and Department Heads. This has been the customary way of employee
evaluation. In this approach, the managers or department heads rate the level of an
employee’s performance based on certain traits that present the accomplishments and
shortcomings of the employee. Then, the manager-rater communicates the results to
the employee after which both discus improvements. Providing feedback on results must
be immediate.
2. Self-Appraisal. This method is otherwise referred to as self-evaluation. It is done
by the employee himself who fills up an appraisal instrument to assess his or her own
job performance. Then, a feedback session transpires between the manager and the
employee, focusing on performance goals and career development plans.
3. Subordinate Appraisal. This is a form of appraisal done by a subordinate to his
supervisor. This is also referred to as upward appraisal. This method has been
practiced by most companies to provide managers an idea on how subordinates
perceived their leadership style, as well as their interpersonal and conceptual
skills. Nevertheless, to avoid possible complications, subordinate appraisal shall be
handed in anonymously.
4. Peer Appraisal. This method is done by an employee to another employee. In
peer appraisal, fellow workers complete the evaluation form then submit to the
supervisor as basis for final appraisal. Although this method is seen as an exact
way of determining worker behavior, there is a risk that those receiving low
ratings might retaliate against their peers.
5. 360-degree Assessment. This appraisal technique gathers feedback from peers,
colleagues, and supervisors. It may also involve gathering different points of view
from outside sources such as the customers, investors, suppliers, and other
stakeholders who are directly communicating and interacting with the employee.
Performance Appraisal Methods
Appraisal methods have been designed to gauge the quality of employee
performance. However, some methods maybe effective to some companies only, and
may not be applicable to others. Therefore, there is no one best way of appraising
performance except as it applies to the specific needs of the company or an
employee.

Character Traits Method

This type of appraisal method is easy to create and grade, but oftentimes, highly
subjective. This method could be an edge for employees who are more demonstrative,
innovative, and are rewarded for work that requires such traits, but puts to a
disadvantage employee who do not possess these characteristics. Each person has a
distinguishing character trait often labeled as either good or bad. Good traits include
integrity, loyalty, and determination, while bad traits could be disrespectfulness and
greed. Example of Appraisal methods under the character traits are the following:
a. The Graphic Rating Scale. It evaluates the extent to which an individual
possesses certain traits or behavior that are useful in achieving outstanding
performance. The ratings should conform to the scale which describes the
trait or behavior being appraised. For example, “Teaching Strategy” rating
scale should be “Excellent, Very Good, Good, Fair, and Poor” rather than
rating it “Very High Extent, High Extent, Moderate Extent, Slight Extent,
Very Least Extent”.

b. Mixed Standard Rating Scale. This method is a newer version of the

graphic rating scale. In contrast with other rating scales, the evaluator is
furnished with performance dimensions showing outstanding, average, and bad
performance. Descriptive statements in a mixed standard are randomly
combined, thus reducing rater biases by making it less obvious which item
reflects best or worst performance.
c. Forced Choice Method. This is a form of appraisal in which the
evaluator is provided with questions in multiple choice format, from
which he is required to choose a single option in rating the
employees. The list of questions includes only favorable or
unfavorable behaviors to choose from. This will direct the
evaluator to a position in which he is forced to describe the
performance as either favorable or unfavorable.

d. Written Report Method. This is also known as the essay

method. Here, the evaluator prepares a written report that
details the employee’s strengths and weaknesses in essay form and
offers recommendations for improvement.
Behavior-based Method
One great stumbling block of a character trait method is its tendency to
be unclear and biased. Behavior-based appraisal was designed to
especially outline which conduct or attitude is permissible and not
permissible at work.

a. Critical Incident Appraisal Method. In this method, the manager keeps

a record of exceptionally good and unacceptable employee behaviors. An
example of exceptionally good behavior is when an employee is being
courteous and respectful to his fellow employees, his manager and to the
customers. An undesirable and unacceptable critical incident happens when
an employee is habitually late for work and has too many excuses. The
incidents gathered and logged by the manager are useful guides in
completing the performance rating of the employee.
b. Behavioral Checklist Method. From old times, this method has been
used by evaluators to rate behavioral aspects that are relevant to the
employee’s job. It is done by putting a check mark on the statement
describing the employee’s behavior, as shown in the appraisal form.

c. Behaviorally Anchored Rating Scale. This is a type of appraisal

technique whose rating scales are behaviorally anchored on a sequence
of statements that are descriptive of the employee’s behavior. It is
done by listing all areas of relevant performance behavior and
recorded by the manager/evaluator. Numerical values are then
assigned to each scale of behavioral anchors. The evaluator/manager
should indicate which behavior from each scale appropriately defines
an employee’s performance.
Output-based Method
Instead of focusing on the character traits or the
behaviors of employees on the job, most organizations
assess employees’ performance through the outputs they
accomplished at work. Supporters of the output-based that
this method is unbiased and more motivating for employees.
Additionally, output-based appraisal usually provides
employees the control for their outputs, and at the same
time giving them the freedom to choose the method they
want to use to achieve them. This is promoting
empowerment to employees.
a. Production-based. A performance review technique based on production is often
a well-liked option for those in outcomes-based functions. To illustrate, if you are
in the manufacturing business, you can evaluate worker productivity based on the
quantity of their outcomes and the wastage rate they incur compared to company
standards. This is an ideal way to unite employee goals and organizational goals
that will benefit both camps.

b. Management by Objectives. Or also known as MBO, describes the particular

purpose or objective of an organization that employers can convey to employees,
then decide on how to achieve each objective. Planning and setting of
organizational goals flow from top to bottom and are transformed into personal
goals. This process allows employers to act one at a time that results in a
profitable work environment. On the other hand, this will help employees gain
knowledge about their own accomplishments as they try to pursue each objective.
In MBO, managers and employers work together to determine, document, and
follow-up goals for a certain of time.
Choosing the Best Performance Appraisal Method
Performance reviews are here to stay until a foreseeable future time. It is
because regardless how the appraisal is managed, the fact remains that all
employees need a friendly feedback or conference mechanism to inspire and
guide them toward the improvement of their job performance. However,
pinpointing what is the best method depends on your company’s short and long-
term goals and objectives.

Table 7 describes some of the advantages and disadvantages of character

traits behavior and output-based approaches to appraisal. Some HR people go
for what is the easiest and least costly types of appraisal, yet there are other
HR practitioners who support the more highly developed and complicated method.
However, many researchers do not favor a single technique over the various
appraisal methods. The choices will always be based on what the employers
believe will align with their goals.
Performance Evaluation Errors
Preferably, performance evaluation must be error-free. However, it is often
long way from being accurate, resulting in appraisal errors. Typical rating errors
include the following:

1. Halo Effect. This error occurs when a supervisor gives an all-positive rating
based on one or more traits and characteristics of an employee although the
performance is below standard, thus ignoring certain negative traits.

2. Horn Error. As opposed to halo effect, this error occurs when a supervisor
sees only a particular negative trait of an employee and they give employee a
low rating on all areas of his performance. Central Tendency. It is rating the
performance of all or almost all employee as average, notwithstanding the level
of performance of the employees. This is done to avoid conflict between the
supervisor and employees.
3. Strictness/Leniency. This error occurs when a supervisor rates employee
performance as either too low or too high.
4. Bias. The likelihood that the supervisor negatively rates employee
performance based on age, sex, race, and other personal characteristics.

Employee Appraisal Interview

The employee appraisal interview is one of the means to assure good
working environment and professional development. If is friendly dialogue
between an employee and the manager or supervisor. In an appraisal
interview, the employee gets the chance to improve his efficiency and
change work manners. Both employee and manager talk about employee
performance and the major aspects of employee development. Interviews
should be planned and organized beforehand to give enough time to both
employee and manager to be ready for the dialogue.
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