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performance appraisal

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Preeti Bhaskar
Preeti Bhaskar

The document discusses performance appraisal systems. It begins by outlining the contents to be covered, which include planning performance appraisal systems, types of systems, problems with systems, and essential characteristics of effective systems. It then provides definitions and examples. One definition states that a performance appraisal is the process of evaluating an employee's job performance in terms of requirements. It also discusses the primary uses of performance appraisals and common problems with systems, such as personal bias, lack of uniform standards, and stress on the individual rather than performance. Lastly, it outlines traditional and modern methods of conducting performance appraisals.

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Performance Appraisal System
Contents  Planning performance appraisal system  Types of performance appraisal system  Problems with performance appraisal  Essential characteristics of an effective performance appraisal system
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’’.
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
• Goal: Maintain Organizational Productivity • Results: Organization Productivity Individual Performance • Methods: Individual Performance Goals Purpose of Performance Appraisal System
performance appraisal
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
• 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
■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.
performance appraisal
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
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
Planning performance appraisal system Discussing results [Feedback] Comparing actual performance with desired performance Measuring the actual performance Communicating the standards Establishing performance standards
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.
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.
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.
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%
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
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
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performance appraisal

  • 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