PERFORMANCE APPRAISAL METHOD IN INDIAN ORGANIZATION

INTRODUCTION:

Performance appraisal can be viewed as the process of assessing and recording staff performance for the
purpose of making judgments about staff that lead to decisions. Performance appraisal should also be
viewed as a system of highly interactive processes which involve personnel at all levels in differing
degrees in determining job expectations, writing job descriptions, selecting relevant appraisal criteria,
developing assessment tools and procedures, and collecting interpreting, and reporting results.
Objectives for performance appraisal policy can best be understood in terms of potential benefits, identify
the following:

 Increase motivation to perform effectively

 Increase staff self-esteem
 Gain new insight into staff and supervisors
 Better clarify and define job functions and responsibilities
 Develop valuable communication among appraisal participants
 Encourage increased self-understanding among staff as well as insight into the kind of
development activities that are of value
 Distribute rewards on a fair and credible basis
 Clarify organizational goals so they can be more readily accepted
 Improve institutional/departmental manpower planning, test validation, and development of
training programs

Performance appraisal should be viewed as a process, and not simply as the creation of ubiquitous
standards.

The overriding purpose of performance appraisal is to help staff to improve and, thus, to improve
organizational effectiveness. Performance appraisal therefore addresses institutional needs as well as staff
member needs, abilities, motivation, and expectancies.

The integrated staffing model suggests two integrated functions toward this purpose: the evaluation of
staff relative to job requirements and the development of staff for improved performance. Thus,
performance appraisal and staff development are closely related and should operate in concert with one
another.

The integrated staffing model also suggests that staffing practices occur within a larger context of
institutional culture. Thus, judgments about performance appraisal, as well as the design and
implementation of appraisal systems, should be considered contextually. Effective appraisal systems
should address clarity, openness, and fairness; recognize productivity through rewards; and be cognizant
of appraiser leadership qualities.

Appraisal System Attributes: Clarity, Openness, and Fairness

The performance appraisal system must possess the attributes of clarity, openness, and fairness. These
attributes are related to the historic values of the student affairs profession. While specific implementation
of these attributes may vary, the following should be represented in effective performance appraisal:
Ongoing Review of Position and Performance - Effective performance appraisal systems conduct ongoing
evaluations of both the position and the staff member occupying it. With ongoing position analysis and
performance appraisal, there are few surprises, and changes in the environment are quickly incorporated
into the official appraisal system.

Job Descriptions – Job descriptions should be reliable, valid, understandable, and specific enough to
provide direction for staff behavior. Job descriptions should focus on what the staff member does (e.g.
advises the student government association) and what outcomes are expected. These outcomes should be
clearly linked to departmental and institutional objectives and needs.

Job descriptions should use action words such "plans" or "supervises" rather than "demonstrates
initiative" or "is likable." Job descriptions should provide guidelines for staff so they know the specific
behaviors expected to perform. The responsibilities of the staff member should be listed in order of
importance and weighted relative to importance, if possible.

Participatory and Interactive Appraisal – Appraisal system processes should be designed in concert
with all stakeholders and open to constant interaction with them. Plans made jointly by staff and
administrators have a better chance of working than plans made independently by either party.

Workable Formats that Avoid Systemic Bias - Effective performance appraisal systems must include
workable formats that avoid systematic biases. Checklists of performance criteria completed at the same
time every year should be avoided. This type of approach simply fails to produce any useful information
for individual or organizational improvement.

Other biases include giving preferential treatment to some but not all staff, rating all staff the same, being
overly lenient or overly harsh toward some or all staff, and practicing conscious or unconscious racial or
gender prejudice.

Adopting a format that includes the standards of clarity, openness, and fairness and that involves more
than one appraiser may help to control some of these biases.

Productivity and Rewards

Appraisal systems are related to institutional productivity requirements. Appraisal systems are expected to
reveal under-productive units and to serve as a response system to focus attention on problem areas.
Appraisal systems should also function to reward productive units and staff.
One of the most crucial response systems is the institution's reward structure. Hypothetically,
performance appraisal is used to reward productive staff through upward salary adjustments. While salary
adjustment may be fixed, especially in state institutions, alternative reward structures may be initiated by
departments to recognize productive staff. Concerns with under-productive staff may be addressed
through targeted staff development activities or through other means as appropriate.

Appraiser Leadership Attributes

Supervisor or appraiser behavior may be more important than the format used in the performance
appraisal system. Appraisers who act like leaders in their organization are more likely to experience
successful results from the appraisal system than will appraisers who behave as non-leaders.
Leaders can model desired behavior and prescribe behavior sought from staff. This modeling carries the
advantage of organizational prestige and power associated with the position.
OBJECTIVES OF PERFORMANCE APPRAISAL

The main objectives of Performance Appraisal are as follows:-

 To provide feedback to employees so that they come to know where they stand and can improve
their job performance.

 To provide a valid database for personnel decisions concerning placements, pay, promotion,
transfer, punishment, etc.

 To diagnose the strength and weakness of individuals so as to identify further training needs.

 To improve coaching, counseling, career planning and motivation to subordinates.

 To develop positive superior-subordinate relations and thereby reduces grievances.

 To facilitate research in personnel management.

 To test the effectiveness of recruitment, selection, placement and induction programmers.

Thus, Performance Appraisal aims at both judgment and developmental efforts. The first two objectives
are judgmental whereas the remaining is developmental. Under developmental efforts employees are
helped to identify their weakness and take steps to overcome them.

ETHICS OF PERFORMANCE APPRAISAL

In a performance appraisal, due consideration must be given to the ethics of appraisal, failing which may
give rise to organizational problems and the very purpose of appraisal may be defeated. In this connection
M.S. Kellog has suggested the following do’s and don’ts:-

Don’t appraise without knowing why the appraisal is needed.

 Appraise on the basis of sufficient and relevant information.

 Be honest in your assessment of all the fact you have obtained.
 Don’t write one thing and say another.
 In offering an appraisal, offer it as only your personal opinion of the facts you observed.
 Pass on the appraisal information only to those who have good reason to want it.
 Don’t imply the existence of an appraisal that has not been made.
 Don’t accept another’s appraisal without knowing the basis on which it was made.

Kellog maintains that these ethical standards are most certain to be met if appraisals are accomplished by
such qualities as:-

 The fact on which an appraisal is based.

 The time period covered.
 The purpose for which appraisal is made.
 The situational factor which shed light on the facts presented.
  The nature of appraiser’s working relationship with the appraisee.
 An explanation of how and where the facts were obtained.
METHODS OF PERFORMANCE APPRAISAL

Following methods are widely used in Performance Appraisal.

1) FORCED-CHOICE RATING

This technique was developed to reduce bias and establish objective

standards of comparison between individuals, but it does not involve the intervention of a third party.
Although there are many variations of this method, the most common one asks raters to choose from
among groups of statements those which best fit the individual being rated and those those which least fit
him. The statements are then weighted or scored, very much the way a psychological test is scored.
People with high scores are, by definition, the better employees; those with low scores are the poorer
ones. Since the rater does not know what the scoring weights for each statement are, in theory at least, he
cannot play favorites. He simply describes his people, and someone in the personnel department applies
the scoring weights to determine who gets the best rating.

The rationale behind this technique is difficult to fault. It is the same rationale used in developing
selection test batteries. In practice, however, the forced choice methods tend to irritate raters, who feel
they are not being trusted. They want to say openly how they rate someone and not be second-guessed or
tricked into making “honest” appraisals.

2) FIELD REVIEW

When there is reason to suspect rater bias, when some raters appear to be using higher standards than
others, or when comparability of ratings is essential, essay or graphic ratings are often combined with a
systematic review process. The field review is one of several techniques for doing this. A member of the
personnel or central administrative staff meets with small groups of raters from each supervisory unit and
goes over each employee’s rating with them to (a) identify areas of inter-rater disagreement, (b) help the
group arrive at a consensus, and (c) determine that each rater conceives the standards similarly.
This group-judgment technique tends to be fairer and more valid then individual ratings and permits the
central staff to develop an awareness of the varying degrees of leniency or severity-as well as bias-
exhibited by raters in different departments. On the negative side, the process is very time consuming.

3) ESSAY APPRAISAL

In its simplest form, this technique asks the rater to write a paragraph or more covering an individual’s
strengths, weaknesses, potential, and so on. In most selection situations, particularly those former
employers, teachers, or associates carry significant weight. The assumptions seems to be that an honest
and informed statement –either by word of mouth or in writing form someone who knows a man well, is
fully as valid as more formal and more complicated methods.

The biggest drawback to essay appraisals is their variability in length and content. Moreover, since
different essays touch on different aspects of a mans performance or personal qualifications, essay ratings
are difficult to combine or compare. For comparability, some type of more formal method, like the
graphic rating scale, is desirable.
4) MANAGEMENT BY OBJECTIVES

To avoid, or to deal with, the feeling that they are being judged by unfairly high standards, employees in
some organizations are being asked to set-or help set-their own performance goals. Within the last five or
six years, MBO has become something of a fad and is so familiar to most managers that I will not dwell
on it here.

It should be noted, however, that when MBO is applied at lower organizational levels, employees do not
always want to be involved in their own goal setting. As Arthur N. Turner and Paul R. Lawrence
discovered, many do not want self-direction or autonomy. As a result, more coercive variations of MBO
drifting into a kind of manipulative form of management in which pseudo-participation substitutes for the
real thing. Employees are consulted, but management ends up imposing its standards and its objectives.
Some organizations, therefore, are introducing a work-standards approach to goal setting in which
management openly sets the goals. In fact, there appears to be something of a vogue in the setting of such
work standards in white-collar and service areas.

5) ASSESSMENT CENTERS

So far, we have been talking about assessing past performance. What about
the assessment of future performance or potential? In any placement decision and even more so in
promotion decisions, some prediction of future performance is necessary. How can this kind of prediction
be made most validly and most fairly?

One widely used rule of thumb is that “what a man has done is the best predictor of what he will do in the
future”. But suppose you are picking a man to be a supervisor and this person has never held supervisory
responsibility? Or suppose you are selecting a man for a job from among a group of candidates, none of
who has done the job or one like it? In these situation, many organizations use assessment centers to
predict future performance more accurately.

Typically, individuals from different departments are brought together to spend two or three days working
on individual and group assignments similar to the ones they will be handling if they are promoted. The
pooled judgment of observers – sometimes derived by paired comparison or alternation ranking – leads to
an order –of-merit ranking for each participant. Less structured, subjective judgment is also made.
There are good deals of evidence that people chosen by assessment center methods work out better than
those not chosen by these methods. The center also makes it possible for people who are working for
departments of low status or low visibility in an organization to become visible and, in the competitive
situation of an assessment center, show how they stack up against people from better-known departments.
This has the effect of equalizing opportunity, improving morale, and enlarging the pool of possible
promotion candidates.

6) GRAPHIC RATING SCALE

This method is more consistent and reliable. Typically, a graphic scale assesses a person on the quality
and quantity of his work and on a variety of other factors that vary with the job but usually include
personal traits like reliability and cooperation. It may also include specific performance items like oral
and written communication.
The graphic scale has come under frequent attack, but remains the most widely used rating method. In a
classic comparison between the “old-fashioned” graphic scale and the much more sophisticated force-
choices technique, the former proved to be fully as valid as the best of the forced-choice forms, and better
than most of them. It is also cheaper to develop and more acceptable to raters than the forced-choice
form. For many purposes there is no need to use anything more complicated than a graphic scale
supplement by a few essay questions.

7) RANKING METHODS

For comparative purposes, particularly when it is necessary to compare people who work for different
supervisors, individual statements, ratings, or appraisal forms are not particularly useful. Instead, it is
necessary to recognize that comparisons involve an overall subjective judgment to which a host of
additional facts and impressions must somehow be added. There is no single form or way to do this.

Alternation ranking: In this method, the names of employees are listed on the left-hand side of the sheet
of paper – preferably in random order. If the rankings are for salary purposes, a supervisor is asked to
choose the “most valuable” employee on the list, cross his name off, and put it at the top of the column on
the right-hand side of the sheet. Next, he selects the “least valuable” employee on the list, cross his name
off, and puts it at the bottom of the right-hand column. The ranker then selects the most valuable person
from the remaining list, crosses his name off and enters it below the top name on the right-hand list, and
so on.

Paired – comparison ranking: This technique is probably just as accurate as alternation ranking and might
be more so. But with large numbers of employees it becomes extremely time consuming and
cumbersome.

Certain techniques in performance appraisal have been thoroughly investigated, and some have been
found to yield better results than others.

• Encourage Discussion

Research studies show that employees are likely to feel more satisfied with their appraisal result if they
have the chance to talk freely and discuss their performance. It is also more likely that such employees
will be better able to meet future performance goals. Employees are also more likely to feel that the
appraisal process is fair if they are given a chance to talk about their performance. This especially so
when they are permitted to challenge and appeal against their evaluation.

• Constructive Intention

It is very important that employees recognize that negative appraisal feedback is provided with a
constructive intention, i.e., to help them overcome present difficulties and to improve their future
performance. Employees will be less anxious about criticism, and more likely to find it useful, when the
believe that the appraiser's intentions are helpful and constructive. In contrast, other studies have reported
that "destructive criticism" - which is vague, ill-informed, unfair or harshly presented - will lead to
problems such as anger, resentment, tension and workplace conflict, as well as increased resistance to
improvement, denial of problems, and poorer performance.

• Set Performance Goals

It has been shown in numerous studies that goal setting is an important element in employee motivation.
Goals can stimulate employee effort, focus attention, increase persistence, and encourage employees to
find new and better ways to work. The useful of goals as a stimulus to human motivation is one of the
best-supported theories in management. It is also quite clear that goals which are "...specific, difficult and
accepted by employees will lead to higher levels of performance than easy, vague goals (such as do your
best) or no goals at all.

• Appraiser Credibility

It is important that the appraiser (usually the employee's supervisor) be well informed and credible.
Appraisers should feel comfortable with the techniques of appraisal, and should be knowledgeable about
the employee's job and performance. When these conditions exist, employees are more likely to view the
appraisal process as accurate and fair. They also express more acceptances of the appraiser's feedback and
a greater willingness to change.

BENEFITS OF PERFORMANCE APPRAISAL

Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working life, it
offers a rare chance for a supervisor and subordinate to have "time out" for a one-on-one discussion of
important work issues that might not otherwise be addresses.

Appraisal offers a valuable opportunity to focus on work activities and goals, to identify and correct
existing problems, and to encourage better future performance. Thus the performance of the whole
organization is enhanced.

For many employees, an "official" appraisal interview may be the only time they get to have exclusive,
uninterrupted access to their supervisor. Said one employee of a large organization after his first formal
performance appraisal, "In twenty years of work, that's the first time anyone has ever bothered to sit down
and tell me how I'm doing."

The value of this intense and purposeful interaction between a supervisors and subordinate should not be
underestimated.

 Motivation and Satisfaction

Performance appraisal can have a profound effect on levels of employee motivation and satisfaction - for
better as well as for worse.
Performance appraisal provides employees with recognition for their work efforts. The power of social
recognition as an incentive has been long noted. In fact, there is evidence that human beings will even
prefer negative recognition in preference to no recognition at all.
If nothing else, the existence of an appraisal program indicates to an employee that the organization is
genuinely interested in their individual performance and development. This alone can have a positive
influence on the individual's sense of worth, commitment and belonging.
The strength and prevalence of this natural human desire for individual recognition should not be
overlooked. Absenteeism and turnover rates in some organizations might be greatly reduced if more
attention were paid to it. Regular performance appraisal, at least, is a good start.

 Training and Development

Performance appraisal offers an excellent opportunity - perhaps the best that will ever occur - for a
supervisor and subordinate to recognize and agree upon individual training and development needs.
During the discussion of an employee's work performance, the presence or absence of work skills can
become very obvious - even to those who habitually reject the idea of training for them! Performance
appraisal can make the need for training more pressing and relevant by linking it clearly to performance
outcomes and future career aspirations.
From the point of view of the organization as a whole, consolidated appraisal data can form a picture of
the overall demand for training. This data may be analyzed by variables such as sex, department, etc. In
this respect, performance appraisal can provide a regular and efficient training needs audit for the entire
organization.

 Recruitment and Induction

Appraisal data can be used to monitor the success of the organization's recruitment and induction
practices. For example, how well are the employees performing who were hired in the past two years?
Appraisal data can also be used to monitor the effectiveness of changes in recruitment strategies. By
following the yearly data related to new hires (and given sufficient numbers on which to base the
analysis) it is possible to assess whether the general quality of the workforce is improving, staying steady,
or declining.

 Employee Evaluation

Though often understated or even denied, evaluation is a legitimate and major objective of performance
appraisal.

But the need to evaluate (i.e., to judge) is also an ongoing source of tension, since evaluative and
developmental priorities appear to frequently clash. Yet at its most basic level, performance appraisal is
the process of examining and evaluating the performance of an individual.

Though organizations have a clear right - some would say a duty - to conduct such evaluations of
performance, many still recoil from the idea. To them, the explicit process of judgment can be
dehumanizing and demoralizing and a source of anxiety and distress to employees.
It is been said by some that appraisal cannot serve the needs of evaluation and development at the same
time; it must be one or the other.

But there may be an acceptable middle ground, where the need to evaluate employees objectively, and the
need to encourage and develop them, can be balanced.

SOME COMMON MISTAKES IN PERFORMANCE APPRAISAL

Where performance appraisal fails to work as well as it should, lack of support from the top levels of
management is often cited as a major contributing reason. Opposition may be based on political motives,
or more simply, on ignorance or disbelief in the effectiveness of the appraisal process. It is crucial that top
management believe in the value of appraisal and expresses their visible commitment to it. Top managers
are powerful role models for other managers and employees.

Fear of Failure

There is a stubborn suspicion among many appraisers that a poor appraisal result tends to reflect badly
upon them also, since they are usually the employee's supervisor. Many appraisers have a vested interest
in making their subordinates "look good" on paper. When this problem exists (and it can be found in
many organizations), it may point to a problem in the organization culture. The cause may be a culture
that is intolerant of failure. In other words, appraisers may fear the possibility of repercussions - both for
themselves and the appraisee.

Longneck (1989) argues that accuracy in performance appraisal is impossible to achieve, since people
play social and political games, and they protect their own interests. "No savvy manager...", says
Longneck, "... is going to use the appraisal process to shoot himself or herself in the foot.” No matter
what safeguards are in place, "... when you turn managers loose in the real world, they consciously fudge
the numbers." What Longneck is saying is that appraisers will, for all sorts of reasons, deliberately distort
the evaluations that they give to employees.

Judgment Aversion

Many people have a natural reluctance to "play judge" and create a permanent record which may affect an
employee's future career. This is the case especially where there may be a need to make negative
appraisal remarks. Training in the techniques of constructive evaluation (such as self-auditing) may help.
Appraisers need to recognize that problems left unchecked could ultimately cause more harm to an
employee's career than early detection and correction.

Organizations might consider the confidential archiving of appraisal records more than, say, three years
old.

Feedback-Seeking

Larson (1989) has described a social game played by poor performers. Many supervisors will recognize
the game at once and may have been its victims. The game is called feedback seeking. It occurs where a
poor performing employee regularly seeks informal praise from his or her supervisor at inappropriate
moments.

Often the feedback-seeker will get the praise they want, since they choose the time and place to ask for it.
In effect, they "ambush" the supervisor by seeking feedback at moments when the supervisor is unable or
unprepared to give them a full and proper answer, or in settings that are inappropriate for a frank
assessment. The game seems innocent enough until appraisal time comes around. Then the supervisor
will find that the employee recalls, with perfect clarity, every casual word of praise ever spoken!
The aim of the game is that the feedback- seeker wants to deflect responsibility for their own poor
performance. They also seek to bolster their appraisal rating by bringing in all the "evidence" of casual
praise. Very often the feedback seeker will succeed in making the supervisor feel at least partly
responsible. As a result, their appraisal result may be upgraded.
Was the supervisor partly responsible? Not really. The truth of the matter is that they have been
"blackmailed" by a subtle social game. But like most social games, the play depends on the unconscious
participation of both sides. Making supervisors aware of the game is usually sufficient to stop it. They
must learn to say, when asked for casual praise, "I can't talk about it now... but see me in my office later."

Appraiser Preparation

The bane of any performance appraisal system is the appraiser who wants to "play it by ear". Such
attitudes should be actively discouraged by stressing the importance and technical challenge of good
performance appraisal. Perhaps drawing their attention to the contents of this web site, for example, may
help them to see the critical issues that must be considered.

Employee Participation

Employees should participate with their supervisors in the creation of their own performance goals and
development plans. Mutual agreement is a key to success. A plan wherein the employee feels some
degree of ownership is more likely to be accepted than one that is imposed. This does not mean that
employees do not desire guidance from their supervisor; indeed they very much do.

Performance Management

one of the most common mistakes in the practice of performance appraisal is to perceive appraisal as an
isolated event rather than an ongoing process.

Employees generally require more feedback, and more frequently, than can be provided in an annual
appraisal. While it may not be necessary to conduct full appraisal sessions more than once or twice a year,
performance management should be viewed as an ongoing process.

Frequent mini-appraisals and feedback sessions will help ensure that employees receive the ongoing
guidance, support and encouragement they need.

If appraisal is viewed as an isolated event, it is only natural that supervisors will come to view their
responsibilities in the same way. Just as worrying, employees may come to see their own effort and
commitment levels as something that needs a bit of a polish up in the month or two preceding appraisals.

LIMITATIONS OF PERFORMANCE APPRAISAL

The main problems involved in performance appraisal are as follows:-

1) ERROR IN RATING – Performance appraisal may not be valid indicator of performance and
potential of employees due to the following types of error;

Halo effect: - It is the tendency to rate an employee consistently high or low on the basis of overall
impression. One trait of the employee influences the rater’s appraisal on all other traits.

Stereotyping: - This implies forming a mental picture of a person on the basis of his age, sex, caste or
religion.
Central tendency: - It means assigning average ratings to all the employees in order to avoid commitment
or involvement. As a result the ratings are clustered around the midpoint.

Constant error: - Some evaluators tend to be lenient while others are strict in assessing performance.

Personal biases: - Performance appraisal may become invalid because the rater dislikes an employee.
Such bias or prejudice may arise on the basis of regional or religion beliefs and habits or interpersonal
conflicts.

2) LACK OF RELIABILITY – Reliability implies stability and consistency in the measurement.

Lack of consistency over time and among different raters may reduce the reliability of performance
appraisal.

3) INCOMPETENCE – Raters may fail to evaluate performance accurately due to lack of

knowledge and experience.

4) NEGATIVE APPROACH – Performance appraisal loses most of its value when

When the focus of management is on punishment rather than on development of employees.