PERFORMANCE APPRAISAL

37. PADMAJA ANIL KESARKAR

38. MADHURA KHAIRNAR
39. ASHUTOSH KHANDARE
40. VAIBHAVI KHANOLKAR
41. GAJANAN KHUDE
42. KISHAN KANISHKA
 MEANING
• A performance evaluation or appraisal is the process whereby organizations assess the performance of
employees.

• Performance appraisal is the systematic evaluation of the performance of employees and to

understand the abilities of a person for further growth and development.
 PURPOSE
• To review the performance of the employees.

• To judge the gap between the actual and the desired performance.

• To help the management in exercising organizational control.

• To diagnose training and development needs of the future.

• Provide information to assist in the hr decisions like promotions, transfer, etc.

• Helps to strengthen the relationship and communication between superior-subordinate and

management-employee.
 FACTORS

* Knowledge of work * Extent of co-operation

* Initiative * Honesty
* Quality of work * Ambition
* Target attainment * Discipline
* Aptitude * Punctuality
* Degree of skill
PROCESS
Objectives of
performance
appraisal

Use appraisal
data for Establish job
appropriate expectations
purpose

Performance Design appraisal

interview pragram

Appraise
performance
THE PHILLIPS MODEL

Problem children Stars

Planned seperations Solid citizens

 LIVE CASES

• 1. Adobe introduced continuous performance management in place of annual

reviews
Adobe were the forerunners of change when they abandoned annual performance appraisals back
in 2012. They replaced them with regular check-ins, supported by frequent feedback – both positive
and constructive. There are no performance ratings or rankings and they allow different parts of the
organization to determine how frequently they should hold check-in conversations, according to their
work cycles.
The result has been a marked increase in employee engagement, with voluntary turnover decreasing
by 30% since check-ins were introduced.
• 2. DELOITTE SAVED 2 MILLION WORKING HOURS PER YEAR WITH WEEKLY CHECK-
INS
DELOITTE WAS THE FIRST BIG NAME TO ANNOUNCE IN 2015 THAT IT WAS SCRAPPING ONCE-A-YEAR
PERFORMANCE REVIEWS, 360-DEGREE FEEDBACK AND OBJECTIVE CASCADING. THIS WAS AFTER IT CALCULATED
THAT THESE PROCESSES WERE CONSUMING A REMARKABLE 2 MILLION HOURS A YEAR ACROSS THE
ORGANISATION.
DELOITTE’S NEW PROCESS REQUIRES EVERY TEAM LEADER TO CHECK IN WITH EACH TEAM MEMBER ONCE A WEEK
TO DISCUSS NEAR-TERM WORK AND PRIORITIES, COMMENT ON RECENT WORK AND PROVIDE COACHING. TO
ENSURE THESE CHECK-INS TAKE PLACE FREQUENTLY, THE CHECK-INS ARE INITIATED BY THE TEAM MEMBERS,
RATHER THAN THE TEAM LEADERS.
THESE WEEKLY CHECK-INS ARE SUPPORTED BY QUARTERLY REVIEWS IN WHICH TEAM LEADERS ARE ASKED TO
RESPOND TO FOUR FUTURE-FOCUSED STATEMENTS ABOUT EACH TEAM MEMBER. RATHER THAN ASKING TEAM
LEADERS WHAT THEY THINK OF THE TEAM MEMBER, WHICH IS WHAT TRADITIONAL PERFORMANCE RATINGS DO,
THEY ASK WHAT THE TEAM LEADER WOULD DO WITH THE TEAM MEMBER.
• 3. General electric put an end to ‘rank and yank’ performance management
Under the reign of its former CEO, jack welsh, general electric was the most well-known proponent of
annual performance ratings and forced distribution curves. For decades, GE operated a ‘rank and yank’
system, whereby employees were appraised and rated once a year, following which the bottom 10%
were fired. Not exactly a recipe for employee engagement.
In 2015, ge announced that it was replacing this approach with frequent feedback and regular
conversations called ‘touchpoints’ to review progress against agreed near-term goals. This is supported by
an online and mobile app, similar to our own clear review performance management tool, which enables
employees to capture progress against their goals, give their peers feedback and also request feedback.
Managers will still have an annual summary with employees, looking back at the year and setting goals,
but this conversation will be more about standing back and discussing achievements and learnings, and
much less fraught than annual reviews
• 4. Accenture abandoned ratings for performance development
As of september 2015, accenture, one of the largest companies in the world, disbanded its former
ranking and once-a-year evaluation process. LIKE GE, accenture has decided to put frequent
feedback and conversations at the heart of its new process and focus on performance development,
rather than performance rating.
As ellyn shook, chief hr officer at accenture, stated: “rather than taking a retrospective view, our
people will engage in future-focused conversations about their aspirations, leading to actions to help
them grow and progress their careers.”
• 5. Cargill introduced on-the-job conversations in place of annual appraisals
Like adobe, cargill, the US food producer and distributor, started to transform its traditional performance
management processes back in 2012, when it introduced ‘everyday performance management’. It
removed performance ratings and annual review forms and instead focused on managers having
frequent, on-the-job conversations and giving regular, constructive feedback. They have made this work
by:
Regularly rewarding and recognising managers who demonstrate good day-to-day performance
management practices.
Sharing the experiences and tips of their successful managers.
Holding teams accountable for practicing day-to-day performance management.
Building the skills needed to succeed at everyday performance management, including effective two-way
communication, giving feedback, and coaching.
The outcome has been impressive, with 70% of cargill employees now saying they feel valued as a result
of their ongoing performance discussions with their manager.
 Case Study on Microsoft

• Computer software and hardware industry, Most reliable and progressive

computer software company in the world.
• Established in 1975 by Bill Gates
• No. of employees : 124,000 (2016)
• Revenue : US$ 89.95 billion (2017)
 During the 1990s, it could be recalled that the world’s computer software and hardware
industry was being dominated by IBM, while Microsoft was still way behind but nonetheless
was already providing excellent competition. At present, the situation has completely reversed.
 During the height of its success, IBM decided to neglect the development of its organizational
culture and its employees and concentrate more on efforts to sustain their profitability. They
invested heavily in research and development activities to find out the most important
computer products that were being needed by the people.
 On the part of Microsoft, instead of worrying so much about maximizing their profits, Bill
Gates prioritized on strengthening the organizational culture of the company.
 He helped instill the values, mission and vision that would remain as the solid foundations of
achieving success in Microsoft. Bill Gates focused more in addressing the needs of the
employees and making sure that they would be working in an environment that can bring out
the best in their capabilities and skills.
 Such was the Vision of Bill Gates that he knew that profitability and progress would
eventually come if he took care of Microsoft’s organizational culture first.
 He did not worry about the big lead that IBM was having during the 1980s because he knew
that Microsoft’s time to dominate the computer hardware and software industry would came.
 He was not worried about the slow results because Gates realized that as the employees
and leaders of Microsoft are given adequate time to understand the purpose and objectives
of the company, the more productive and profitable the company is going to be in the long
run.
 The prophecy of Bill Gates turned out to be corrct as the strong and solid organization
culture of Microsoft that took years to establish eventually proved to be the winning formula
for Microsoft to go ahead of IBM in the computer hardware and software industry.
 PROBLEMS FACED BY MICROSOFT

• Discrimination
• Legal restrictions
• Intercultural effects
• Personal Bias
 METHODS THEY CAME WITH

• Rating scale
• Critical Incident Method
• Balance Scorecard
• 360 Degree Feedback
• Field Review Method
 PAST ORIENTED (TRADITIONAL) METHODS

Ranking method: employee is compared with all others for the purpose of placing order of worth.
Checklist : questions are prepared with their yes/no answers by hr department.
Forced choice method : the rater is forced to answer ready-made statements of two or more blocks , about the
employees in terms of true or false.
Forced distribution method: employees performance level confirms to a normal statistical distribution i.E.,
10,20,40,20,10%
Critical incidents method: describes extremely good or bad behavior related to job performance.
Field review method: appraisal done by someone from outside usually HR department or corporates.
Grading: there can be three categories established for employees: outstanding, satisfactory and
unsatisfactory. There can be more than three grades. Employee performance is compared with grade
definitions.
Confidential report method: done mainly for government department. Structured format is devised to
know strength,weakness,intelligence,character,attendance.
Graphic scale method: it is also known as linear rating scale. In this method, the printed appraisal form
is used to appraise each employee.
Paired comparison approach: employee is compared on one-to-one basis.
 Modern method

• ASSESSMENT CENTRE METHOD

• APPRAISAL THROUGH MANAGEMENT BY OBJECTIVES (MBO)
• THE 360 DEGREE APPRAISAL
• HUMAN RESOURCE ACCOUNTING METHOD
 Assessment centre method

• In this approach, indivisuals from various department arre brought together to spend two or three
days working on indivisual or group assignmens similar to the ones they would be handling when
they are promoted .

• The evaluators in this method consist of experienced manager working at different levels who prepare
a summary report for the management as well as for the employees. This technique usually measures
the planning ability interpersonal skills and organizational skills of an employee.
 Appraisal through management by objectives (MBO)

• “Process whereby the superior and subordinate managers of an organization jointly identify its
common goals, define each individual’s major areas of responsibility in terms of results expected of
him and use these measures as guides for operating the unit and assessing the contribution of each its
members”.
Process of management by objectives
Determining
Organizational Goals

The Performance Determining Employees’ Objectives

Appraisal Constant Monitoring Progress and
Performance

Providing Performance
Feedback Evaluation
The 360 degree appraisal

• Self appraisal
• Appraisal by superiors
• Appraisal by subordinates
• Peer appraisal
• Potential appraisal
 Human resource accounting method

• Human resources are a valuable asset for any organization and it can be valued in monetary
terms. This method evaluates the performance of an employee in terms of costs and contributions.
HR costs include expenses incurred on HR planning recruitment selection induction and training. The
difference between this costs and the contribution by an employee reflects the performance of that
employee. This method is still developing hence is not very popular at present.
 ADVANTAGES

• PERFORMANCE IMPROVEMENT
• DEVELOPMENT OF EMPLOYEES
• CORRECTIVE ACTIONS
• CAREER PLANNING
• MOTIVATION
• OTHER BENEFITS
 DISADVANTAGES

• The halo effect

• Contrast error
• Rater bias
• Central tendency error
• Sampling error
• Primary and regency errors
 Legal aspects of performance appraisals

• Performance appraisals as evidence

• Discrimination
• Inconsistency
• Inappropriate feedback
• Over-rating
• Retaliation
 Problem in performance appraisals

• Determining the evaluation criteria

• Create a rating instrument
• Lack of competence
• Errors in rating and evaluation
• Resistance
 Refrences

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