PERFORMANCE

APPRAISAL
Presented by:
Amit Kumar,
Varun Bansal,
Arjun Kafle,
Amit Pandey,
Anand Prakash,
Rohit Kumar
 FLOW OF PRESENTATION

1. Concept of Performance Appraisal

2. Objective and Importance of Performance Appraisal

3. Methods of Performance Appraisal

4. Problems in Performance Appraisal

5. New Developments in Performance Appraisal

6. Case Study
 CONCEPT
The assessment of an individual’s performance in a
systematic way, the performance being measured against such
factors as
Ø Job knowledge
Ø Quality and quantity of output
Ø Initiatives
Ø Leadership abilities
Ø Supervision
Ø Dependability
Ø Co-operation
Ø Judgment
Ø Health etc.
 DEFINITION

systematic evaluation of the individual with respect to his or her performance on the job and his or h

rformance Appraisal is an assessment of an individual’s performance against well defined benchmar

 OBJECTIVES
Ø Salary Increase
Ø Promotion
Ø Training and Development
Ø Feedback
Ø Pressure on employees
Ø
 PAST ORIENTED
METHODS
• Rating Scales
• Checklist
• Forced Choice Method
• Forced Distribution Method
• Critical Incidents Method
• Field Review Method
• Essay Method
• Cost Accounting Method
• Ranking Method
•
•
 Rating Scales
• It consists of several numerical scales
representing a job related performance
criterion such as dependability, initiative,
output, attendance, attitude, co-operation
and the like. Each scale ranges from excellent
to poor.
A large no. of employees can be evaluated in a
short period.
Drawbacks
 The rater’s biases are likely to influence evaluation.
 The biases are particularly pronounced on subjective
criteria such as co-operation, attitude and initiative.
•
 Checklist
A performance appraisal tool that uses a
list of statements or work behaviors
that are checked by raters.
 Can be quantified by applying weights to
individual checklist items.


Drawbacks
 Weighting creates problems in appraisal
interpretation
 Assignment of weights to items by persons other
than the raters

Forced Choice
Method
Performance appraisal method in which
rater is forced to select statements
which are readymade.

Drawbacks
 The statements may not be properly framed.
 The statements may not be precisely descriptive
of the ratee’s traits.
Forced Distribution
Method

Performance appraisal method in which
ratings of employees are distributed along a
bell-shaped curve.

Drawbacks
 Assumes a normal distribution of performance
 Providing explanation for placement in a higher or lower
grouping can be difficult.
 Is not readily applicable to small groups of employees
Forced Distribution on a Bell-Shaped Curve
 Critical Incidents
Methods
Manager keeps a written record of highly
favorable and unfavorable employee
actions.

Drawbacks
 Variations in how managers define a “critical
incident”
 Time involved in documenting employee actions
 Most employee actions are not observed and may
become different if observed
•


 Field Review
Method
Outside reviewer reviews employee record
and interviews the employee and his
or her superior and develops a rating for
the employees from the interview notes.

Drawbacks
 An outsider is usually not familiar with conditions in
an employee’s work environment which may affect
the employee’s ability or motivation to perform.
 Reviewer doesn’t have the opportunity to observe
employee behavior of performance over a period of
time and a variety of situation.
 Cost Accounting
Method
This method evaluates performance from
the monetary returns the employee
yields to his or her organization.

Drawbacks
 Performance of employee is evaluated only on the
basis of the cost in keeping the employee and
the benefits derives from him or her.
 Essay Method
Manager writes a short essay describing
an employee’s performance.
Drawbacks
 Depends on the managers’ writing skills and their
ability to express themselves.
 It takes much time because the rater first collect
the information necessary to develop the essay
and write it.

 Ranking Method

Listing of all employees from highest to
lowest in performance.

Drawbacks
 Does not show size of differences in performance
between employees
 Implies that lowest-ranked employees are unsatisfactory
performers.
 Becomes an unwieldy process if the group to be ranked
is large.

Methods of Performance
Appraisal
•

Future Oriented Methods


Management by objective
360 degree appraisal
Psychological appraisal
Assessment centers
•
Management by Objective
(MBO)
 Peter Drucker gave the concept of MBO in 1954

 MBO requires the management to set specific
measurable goals with each employee and then
periodically discuss the latter’s progress towards
these goals.

 MBO focuses attention on what must be
accomplished (goals) rather than how it is to be
accomplished.
 Contd..
It is thus a kind of goal setting and
appraisal program involved 6 steps :
•

 Setting the organizational goals

 Setting the departmental goals
 Discussing departmental goals
 Defining expected results
 Reviewing the performance
 Providing feedback
 360 Degree feedback
system
 It collects performance information from multiple
parties including one’s subordinate, peers,
superiors and customers.

 It is also currently used for designing the promotion
and rewards besides being earlier used as a fact
finding and self correction techniques.

 By design the 360 degree appraisal is effective in
identifying and measuring interpersonal skills,
customer satisfaction and team building skills.
 Psychological
Appraisal
Large organization employs full time
industrial psychologist, who assess an
individual’s future potential and not past
performance.

Appraisal normally consist of in depth
interviews, psychological tests,
discussion with superior and a review of
other evaluation.
 Contd..
Psychologist then makes an evaluation of
the employee’s future performance.

These evaluations helps in placement and
development decision to shape the
person’s career.

This approach is slow and costly, quality of
appraisal depends largely on the skills of
psychologist.
Assessment Centers
First applied in German army in 1930.
Meant for assessing the potential.
It is not a technique of performance
appraisal by itself. In fact it is the
assessment of individual.
Techniques used are role playing, case
studies, simulation exercises etc.
•



Contd..
Individuals from various departments work
together in groups on assignments
similar to the ones they would be
handling when promoted
Observer rank the performance of each &
every participant in order of merit.
All assesses get an equal opportunity
Proves to be a better method
BASIC TYPES OF
PROBLEMS
JUDGEMENT ERROR

POOR APPRAISAL FORMS

LACK OF RATER’S PREPAREDNESS

INEFFECTIVE ORGANISATIONAL POLICIES &
PRACTICES
JU D G E M E N T E R R O R S

E rro rs co m m itte d w h ile m a kin g d e cisio n s,

d u e to b ia se s & p re ju d ice s a re ju d g e m e n t
e rro rs.
•
judgement errors
FIRST IMPRESSION (PRIMACY
EFFECT): • HALO ERROR:
• •

• The appraiser’s first impression

• One aspect of candidate
of a candidate may colour his covers up all other aspects.
evaluation. •

• •

• Positive primacy effect- • eg. If appraiser deduces the

Candidate can’t do a wrong worker to be good on the
thing. basis of his dress sense.
•

• Positive primacy effect-

Candidate can’t do a thing
right.
•
judgement errors • HORN EFFECT
•

• Rater’s bias is in other direction.

•

• eg. Candidate doesn’t smile at all so he can’t mix with other

people.
judgement
errors STEREOTYPING
•
• CENTRAL TENDENCY
•
•

• It occurs when a rater creates •When rater rates the

a mental picture because of candidates as average
the age, sex, religion, caste employees.
etc. •

•
• R e ce n cy e ffe ct
•

A cu rre n t p e rfo rm a n ce is g ive n

m o re th e n th e
re q u ire d w e ig h ta g e .
POOR APPRAISAL FORMS

Bad appraisal forms are responsible for bad

evaluation.

Following factors may make the form bad :

1.Unclear rating scale.

2.Ignored important job aspects.
3.Unnecessary performance dimensions.
4.Too long or complex forms.
LACK OF RATER’S
PREPAREDNESS
•

• A rater may be unprepared due to:


No proper training
Lack of time.
Confusion due to vague objectives.
INEFFECTIVE
ORGANISATIONAL POLICIES
& PRACTICES

S o m e tim e s o rg a n isa tio n a l p o licie s d e m o tiva te th e w h o le

a p p ra isa l p ro ce ss.
S o m e m a lp ra ctice s a re :
•n o re w a rd to ra te r
•n e g a tive a ttitu d e o f ra te r.
•co lle a g u e s ra tin g th e m se lve s.
• n e g a tive a ttitu d e o f m a n a g e m e n t.
Annual Performance
Appraisals
Purpose: To measure annual performance
against objectives established in performance
plan
Steps:
• 1) Ask employee to complete self evaluation form
• 2) Complete appraisal form
• 3) Schedule performance appraisal discussion in
advance
 Completing the
Appraisal Form
• Consider:
vPerformance notes kept
over course of the
year
vEmployee’s self
evaluation
vFeedback from key
“customers”
vObservations of
supervisor
Preparing Individual
Development Plans

• Develop performance
plans for each employee
based upon the areas of
past performance that need
improvement and the areas
of future development that
an employee can strive to
attain.

How to Prepare Individual
Development Plans
Review training and educational records
Identify educational/training
opportunities
Consider job rotation
Identify sources of assistance
Follow through on commitments
 VBA ’ s Executive
Performance
Appraisal System
A New Approach to Executive
Performance Management
Appraisal Plan
Development
Development Team was comprised of
Directors from the field
Field survey was conducted with the
best ideas incorporated in the final
plan
Performance expectations from senior
level VBA management were
incorporated in the final plan
Executive Performance
Appraisal System
Element 1 - Balanced Scorecard Performance
•

Element 2 - Organizational Support/Teamwork

•

Element 3 - Leadership Development

•

Element 4 - External Relations

•

Element 5 - Workplace Responsibilities

•
The Balanced Scorecard

Balanced Scorecards for each business line

•

contain the following key elements:

Speed
Accuracy
Unit Cost
Customer Satisfaction
Employee Development
 Appraisal Smart ™

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Performance Appraisal / Review System

Based on International Best Practice

www . appraisal - smart . com
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Appraisal / Review process need not be so stressful ,
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oyee Performance Appraisals / Reviews , and will place you at the technol

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A ppr aisal Smar t Accommodates any kind and
combination
of Perfor mance Measur es such as:

Goals

Objectives

Key Performance Indicators (KPI's)

Competencies
 CASE STUDY

Performance Appraisal
HUMAN RESOURCE MANAGEMENT
Electronic industries limited,
Faridabad
•

• Products -electric bulbs, water coolers, air

coolers, and refrigerators
•

• Recent addition- electric motors both for

domestic and agricultural purposes.


45
VACANCY

one engineer with B. tech degree

Currently, five engineers having B. Tech are
working as assistant engineer


46
Advertisement
12 applications received

5 are from company itself


47
selection
Process:- preliminary interview, tests, final
interview, & medical Check-up

Mr. Anil Ambani was selected

He was 4th rank Assistant engineer of the
company


48
Grievance of others
Moved into the court against promotion
unfairness.


49
Questions
Comment on the managerial choice in favour
of Mr Ambani.
Is it necessary to promote only seniors to
higher posts in an organisation? Why? Why
not?
What is the legal position in such cases in
India?



50
References
 Human Resource Management by L.M. Prasad
Human Resource Management
by K. Aswathappa
