INTRODUCTION
Performance appraisal is the process of obtaining, analyzing and recording information about the
relative worth of an employee. The focus of the performance appraisal is measuring and
improving the actual performance of the employee and also the future potential of the employee.
"Performance appraisal is the systematic, periodic and an impartial rating of an employees
excellence in the matters pertaining to his present job and his potential for a better job."
Performance appraisal is a systematic way of reviewing and assessing the performance of an
employee during a given period of time and planning for his future. It is a powerful tool to
calibrate, refine and reward the performance of the employee. It helps to analyze his
achievements and evaluate his contribution towards the achievements of the overall
organizational goals.
What is Performance?
Performance is synonymous with behavior; it is what people actually do. Performance includes
those actions that are relevant to the organizational growth and can be measured in terms of each
individuals proficiency (level of contribution). Effectiveness Performance refers to the
evaluation of results of performance that is beyond the influence or control of the individual.
How is Performance managed?
Good performance by the employees creates a culture of excellence, which benefits the
organization in the long run. The activity includes evaluation of jobs and people both, managing
gender bias, career planning, and devising methods of employee satisfaction etc. the efforts are to
make to generate the individuals aspirations with the objectives of the organization.
Organization has to clear the way of career advancements for talented and hardworking people.
Fear of any kind from the minds of the employees should be removed so that they give best to
their organization. Allow free flow of information. Communication network should be designed
in such a way no one should be allowed to become a hurdle. This enables the managers to take
correct decisions and that too quickly.
Performance appraisal
Why Performance Appraisal?
Todays working climate demands a great deal of commitment and effort from employees, who
in turn naturally expect a great deal more from their employers. Performance appraisal is
designed to maximize effectiveness by bringing participation to more individual level in that it
provides a forum for consultation about standards of work, potential, aspirations and concerns. It
is an opportunity for employees to have significantly greater influence upon the quality of their
working lives. In these times of emphasis on Quality, there is a natural equation: better quality
goods and services from employers who enjoy better quality goods and services from their
employers.
Performance appraisal must be seen as an intrinsic part of managers responsibility and not an
unwelcome and time-consuming addition to them. It is about improving performance and
ultimate effectiveness.
Performance appraisal is a systematic means of ensuring that managers and their staff meet
regularly to discuss post and present performance issues and to agree what future is appropriate
on both sides.
This meeting should be based on clear and mutual understanding of the job in question and the
standards and outcomes, which are part of it. In normal circumstances, employees should be
appraised by their immediate managers on one to one basis. Often the distinction between
performance and appraising is not made. Assessment concerns itself only with the past and the
present. The staff is being appraised when they are encourages to look ahead to improve
effectiveness, utilize strengths, redress weaknesses and examine how potentials and aspirations
should match up.
It should also be understood that pushing a previously prepared report across and desk cursorily
inviting comments, and expecting it to be neatly signed by the employee is not appraisal this is
merely a form filling exercise which achieves little in terms of giving staff any positive guidance
and motivation.
Performance appraisal
Who Conducts Performance Appraisals
Human resource management (HRM) conducts performance management. Performance
management systems consist of the activities and/or processes embraced by an organization in
anticipation of improving employee performance, and therefore, organizational performance.
Consequently, performance management is conducted at the organizational level and the
individual level. At the organizational level, performance management oversees organizational
performance and compares present performance with organizational performance goals. The
achievement of these organizational performance goals depends on the performance of the
individual organizational members. Therefore, measuring individual employee performance can
prove to be a valuable performance management process for the purposes of HRM and for the
organization. Many researchers would argue that performance appraisal is one of the most
important processes in Human Resource Management.
The performance management process begins with leadership within the organization creating a
performance management policy. Primarily, management governs performance by influencing
employee performance input (e.g. training programs) and by providing feedback via output (i.e.
performance assessment and appraisal). The ultimate objective of a performance management
process is to align individual performance with organizational performance. A very common
and central process of performance management systems is performance appraisal (PA). The PA
process should be able to inform employees about the organization's goals, priorities, and
expectations and how well they are contributing to them.
Performance appraisal
THE APPRAISAL OF PERFORMANCE SHOULD BE GEARED TO:
It is widely accepted that the most important factor in organization effectiveness is the
effectiveness of the individuals who make up the organization. If every individual in the
organization becomes more effective, then the organization itself will become more effective.
The task of reviewing situations and improving individual performance must therefore be a key
task for all managers
For appraisal to be effective, which means producing results for the company, each manager has
to develop and apply skills of appraisal.
These are
Setting Standards of the performance required, which will contribute to the achievement of
specific objective.
Analyzing any differences between the actual performance and the required performance to
establish the real cause of shortfall rather than assume the fault to be in the job holder.
Interviewing having a discussion with the jobholder to verify the true cause of a shortfall,
developing a plan of action which will provide the performance required.
Appraisal can then become a way of life, not concerned simply with the regulation of rewards
and the identification of potential, but concerned with improving the performance of the
company. The benefits of appraisal in these terms are immediate and accrue to the appraising
manager, the subordinate manager/employee, and to the company as a whole.
Performance appraisal
MEANING OF PERFORMANCE APPRAISAL
The formal definitions of performance appraisal extracted from book of HRM and personnel
management are:-
K. Aswathappa.
Performance Appraisal is a formal, structured system of measuring and evaluating an
employees job related behavior and outcomes to discover how and why the employee is
presently performing on the job and how the employee can perform more effectively in the future
so that the employee, organization and society all benefit.
Dale S. beach.
Performance appraisal is the systematic evaluation of the individual with respect to his or her
performance on the job and his or her potential for development
Edwin B. flippo.
Performance appraisal is the systematic, periodic, and an impartial rating of an employees
excellence in matters pertaining to his present job and his potential for a better job.
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Performance appraisal
Wendell French.
Performance appraisal is the formal, systematic assessment of how well employees are
performing ther jobs in relation to established standards and the communication of that
assessment to employees.
G.D. Fisher.
Performance appraisal is the process by which an employees contribution to the organization
during a specified period of time is assessed.
Performance appraisal
HISTORY OF PERFORMANCE APPRAISAL
The history of performance appraisal is quite brief. Its roots in the early 20th century can be
traced to Taylor's pioneering Time and Motion studies. But it is not very helpful, for the same
may be said about almost everything in the field of modern human resources management.
As a distinct and formal management procedure used in the evaluation of work performance,
appraisal really dates from the time of the Second World War - not more than 60 years ago. Yet
in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical,
it might very well lay claim to being the world's second oldest profession!
There is, A basic human tendency to make judgments about those one is working with, as well
as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a
carefully structured system of appraisal, people will tend to judge the work performance of
others, including subordinates, naturally, informally and arbitrarily. The human inclination to
judge can create serious motivational, ethical and legal problems in the workplace. Without
structured appraisal system, there is little chance of ensuring that the judgments made in the
organization will be lawful, fair, defensible, accurate and desirable to others. Performance
appraisal systems began as simple methods of income justification. That is, appraisal was used to
decide whether or not the salary or wage of an individual employee was justified. The process
was firmly linked to material outcomes. If an employee's performance was found to be less than
ideal, a cut in pay would follow. On the other hand, if their performance was better than the
supervisor expected, a pay rise was in order.
Little consideration, if any, was given to the developmental possibilities of appraisal. It was felt
that a cut in pay, or a rise, should provide the only required impetus for an employee to either
improve or continue to perform well.
Performance appraisal
Sometimes this basic system succeeded in getting the results that were intended; but more often
than not, it failed. For example, early motivational researchers were aware that different people
with roughly equal work abilities could be paid the same amount of money and yet have quite
different levels of motivation and performance. These observations were confirmed in empirical
studies. Pay rates were important, yes; but they were not the only element that had an impact on
employee performance. It was found that other issues, such as morale and self-esteem, could also
have a major influence.
As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s
in the United States, the potential usefulness of appraisal as tool for motivation and development
was gradually recognized. The general model of performance appraisal, as it is known today,
began from that time.
Performance appraisal
Managing people:Performance Appraisal helps in managing the employees the best way. It helps to assist staff in
performing their ability, thus maximizing their job satisfaction and their contribution to the
companys objectives. Managing employees by identifying their strengths and weakness and
informing them as to what performance is expected from them. If he understands his role will be
more effective on his job. The feedback reinforces good performances and discourages poor
performance.
Motivating the employees:Achievements, recognition, involvement, job satisfaction and development are more likely to
motivate than anything else, given that they are provided in satisfactory working conditions and
that their awards are appropriate. Appraisals offer a good opportunity for managers to keep in
touch with their employees changing capabilities and aspiration. For managers who take the
motivation of their staff seriously, performance appraisal is an indispensable tool. The added
value is the satisfaction managers themselves derive from appraising staff well and seeing the
results it can bring in terms of increases ability and achievement.
Improving Communication
Performance Appraisal serves as a mechanism for communicating between superiors and
subordinates. Since Appraisal is a particularly refined form of corporate communication, using it
to improve communications is a relevant objective. This applies to both communication on one
to one basis between managers and staff and top management communication in general. Here is
an opportunity to ensure that all issues relating to performance are clarified and to exchange
information in order to improve operational effectiveness.
Providing basis for promotions, transfer, termination and deciding the pay:
Performance Appraisal can identify those sub-ordinates who deserve promotion or require lateral
shift or termination. Thus, performance appraisal can be used for career planning. Performance
Appraisal can help in development of scientific basis for reward allocation, wage fixation, raises
incentives etc.
Performance appraisal
Identifying training and development needs and aiding in designing Training and
development and training programme:
It helps in bringing out areas where a person is weak and helps in identifying training and
development needs of employee for meeting challenges in their current and future employment.
Therefore then training and development programme are made.
Record Keeping:
It gives a written record for various reasons. For instance, a new manager can get a clear idea of
performance standards expected by him and ongoing targets. Some can compare their present
performance with past performance. It is also necessary for allocation of salary purposes.
Staff Retention:
Many vacancies are unavoidable through retirement, illness, leaving the area or sheer
incompatibility. However many casualties can be avoided if managers can address themselves
to some other issues which cause staff to leave for alternative employment frustration, boredom
, lack of opportunity, lack of recognition etc. Appraisal must be seen as the way of identifying
problem.
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Performance appraisal
BENEFITS OF 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 addressed.
Almost universally, where performance appraisal is conducted properly, both supervisors and
subordinates have reported the experience as beneficial and positive.
Appraisals offer 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, thats the first time anyone
have even bothered to sit down and tell me how I am doing.
The value of this intense and purposeful interaction between a supervisor and subordinate should
not be underestimated.
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Performance appraisal
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 individuals sense of worth commitment and belonging.
The strength and prevalence of this natural human desire for individuals 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.
Employee Evaluation
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Performance appraisal
Though often understand or even denied evaluation is a legitimate and major objective of
performance appraisal. But the need to evaluate 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.
Through organizations have a clear right some would say a duty to conduct such evaluations
of performance, much 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.
Legal Compliance
Appraisal serve a very valuable purpose in providing legally defensible reasons for making
promotion, transfer, reward and discharge decisions. Increasingly a large number of aggrieved
and personnel are taking recourse to legal action when faced with adverse decisions in their own
organizations. Therefore, a formalized Performance Appraisal system can help the company
justify its decision on firm and legally satisfactory grounds
Performance appraisal
In order to achieve the objectives of the appraisal it is very essential that certain critical elements
be heeded if the appraisal process needs to be successful.
The components are:
1. Identification of key performance areas
Every job has set of functions to be performed by the holder. As one rises in the
organizational hierarchy, from a supervisor to managerial jobs, the activities and functions
become complex and may keep on changing priority from time to time. The employees will
be assessed on these key performance areas. It differs according to the nature of the job. In
addition to the identification of key performing areas, it is useful to set targets for the period
of appraisal. The target should deal with the task expected to be accomplished by the
appraisee under each key performing areas. The target settling helps the employee to be clear
of the expectation and also provides an opportunity for him to ask the assistance required
from his job in order to accomplish whatever was set for him. The target setting should be
done through a process of mutual consultations and discussions.
3. Self -Appraisal
Analyzing ones own strengths and weaknesses is the best way of identifying the potentials
available, rather than the other person telling. Self appraisal is a tool to analyze oneself. At
the end of the year of the appraisal process should begin with self appraisal for every
employee. To appraise ones own self on key performing targets and qualities, the appraise
would go through a process of reflection and review. It is an established fact that change is
faster when it is self initiated. If any employee has to improve or do better, he must first feel
the need to do so. Reflection and review is a process that enables him to feel the need and
improve more upon his strengths and weaknesses.
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Performance appraisal
4. Performance analysis
Analyzing ones own performance gives new insights on how one is performing and what are
the critical points where he has to put his best and improve upon. Increased communication
with the appraiser and appraise will help in sorting out the difficulties and also understanding
the circumstances under which his appraisee is working, the difficulties he is experiencing
and the contribution he is making. The appraised should also understand how he himself is
responsible for some achievements or non-achievements. To meet these objectives at the end
of the year, the appraiser reflects about his performance and identifies factors that prevented
him from doing better. He classifies these factors into factors within his control and factors
outside his control. To this process, he lists the difficulties he is facing. He then gives
analysis to the supervising officer who may add upon the list.
5. Performance discussion
After identification of strengths and weakness and after analyzing the performance, it is
important that the appraiser fixes the time for review and discussion. Counseling is an
important tool for review and discussion. It is intended to understand each other more,
increase mutuality and help each other so that they jointly do better in future. Employee
counseling is often neglected in any organization.
Counseling involves helping an employee to identify his strengths and weaknesses to
contribute to his growth and development. Counseling is a continuous process. Purpose is to
help an employee improve his performance level, maintain his morale, guide him to identify
and develop his strong points, overcome his weak points , develop new capabilities to handle
more responsibilities, identify his training needs. For the appraiser, it is an opportunity to
understand his subordinate more, help him to understand his own strengths and weaknesses
and help him to identify mechanisms for development and performance improvement. Much
of the success of the appraisal depends on these dimensions. If the appraiser does not set a
healthy climate and does not attempt to luster to the feelings of his appraisee, the outcome
may be continued poor performance and tension between the two.
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Performance appraisal
6. Identify developmental needs.
Performance analysis and review leads to identification of strengths and weaknesses of
employees which provides a foundation for identification of developmental needs. Poorly
performed KPAs are the indicators of inadequate performance and lack of capabilities. An
employee suffering from poor performance can be developed through training on the job,
coaching. If poor performance is due to lack of motivation, it should be dealt with during
counseling session. The appraiser should therefore indicate the developmental needs of the
employee and suggest action after assessment.
7. Final assessment
The appraiser should give the final assessment after completing all steps mentioned above.
By this stage, he would have a thorough understanding of his subordinates, his
accomplishments, strengths and weaknesses; developmental needs etc and are in a good
position to assess him on a rating scale. The final assessment should be shown to the
employees. In case of many strong differences, the appraiser should have the scope for
communicating his reaction so the appraisers boss would have an opportunity to review the
appraisal and moderate.
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Performance appraisal
THE FIVE-WAY TESTS OF THE PERFORMANCE APPRAISAL SYSTEM:
There is a five-way test determines whether the Performance Appraisal that the organization has
adopted is successful, credible and commands to respect the staff.
The following figure shows the five-way tests for credibility of the Performance Appraisal
system:
Perfor
manc
e
Appra
isal
Syste
m
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Performance appraisal
Is it Valid?
Is it Reliable?
Reliability in Performance Appraisal refers to the consistency of judgment. This has to aspects:
Firstly, for a particular employee, reliability is enhanced when independent raters evaluate
him more or less similarly. This is especially so when such raters are at about the same level,
say supervisors, peers or subordinates, then perceptions would, in all probability, differ
widely.
Secondly for data to be reliable, the rater must have had adequate opportunity of observing
the employees functions, actions, demeanor, work output etc.., as well as the conditions
under which he or she had performed. Otherwise, if observance had been occasional
intermittent, periodic or inadequate, the data generated would not be reliable.
Is it Sensitive?
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Performance appraisal
What is implied here is that an evaluation and assessment system must be capable of making a
clear distinction between effective and ineffective performances. Where this does not happen,
and employees, whether good or bad, are rated more or less the same, three consequences follow:
The appraisal becomes useless for any significant administrative exercise;
The purpose of employee development is not served;
Supervisors come to regard the rating process as a routine and meaningless task and
subordinates lose faith in it.
Is it Practical?
From a purely practical standpoint it has to be remembered that a Performance Appraisal systems
takes time, effort and money to develop, implement and use. Hence it must:
Demonstrate establish that the benefits that accrue to the organization outweigh the costs;
Be relatively easy to use. A complex, difficult or cumbersome modus operandi will nullify
the projected gains and breed user resistance.
Render it, easily and freely, to other HR uses.
Is it Acceptable?
This is the most important and essential requirement of all. Performance Appraisal is not of value
unless the system inspires confidence among all sections as to its fairness and freedom from bias.
This is possible only if there is some openness. Therefore supervisors should enlist active support
and cooperation to subordinates by making explicit what aspects of job performance they will be
evaluated on. Instead of secrecy there should be openness then only can then they achieve the
level of acceptability and commitment be achieved which is so sorely needed in Performance
Appraisal.
Performance appraisal
1. Career Development
This provides an opportunity for discussion of career objectives, and creation of a strategy
designed to maximize career potential.
To provide an opportunity for career counseling
To help in succession planning.
To assess training needs
To plan for career development
To assess and develop individual abilities
To provide an objective basis on which to base decisions about training and promotion
2. Feedback
As well, feedback is encouraged in both directions: as such, employees are encouraged to
prepare ratings of their supervisors.
To provide constructive feedback to the individual regarding how their performance is seen.
This provides a structured format for the discussion of performance issues
on a regular basis.
Feedback either reinforces performance strengths, or provides the opportunity to discuss
resolution of performance deficiencies.
Performance appraisal
Salary
Promotion
Retention/termination
Recognition of performance
Layoffs
Identification of poor performers
4. Performance History
This provides a performance history which is not dependent upon human memory, and which
may be useful in the full range of personnel decisions, including compensation decision-making.
To review past and present performance, identifying strengths and weaknesses.
5. Organizational Goals
To clarify, for the individual, organizational expectations
This provides an opportunity to view ones performance in the context of broader
organizational goals.
To assess future promotion prospects and potential
To set objectives for the next period
6. Job Standards
This provides an opportunity for clearer articulation and definition of performance expectations.
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Performance appraisal
PROCESS OF PERFORMANCE APPRAISAL
The process of performance appraisal is mentioned with the help of the chart.
ESTABLISHING
PERFORMANCE
STANDARDS
COMMUNICATING THE
STANDARDS
DISCUSSING RESULTS
DECISION MAKING
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Performance appraisal
In case the performance of the employee cannot be measured, great care should be taken to
describe 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. 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.
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.
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Performance appraisal
COMPARING THE ACTUAL WITH THE 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
The result of the appraisal is communicated and discussed with the employees on one-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. The purpose of the meeting should be to solve the problems
faced and motivate the employees to perform better.
DECISION MAKING
The last step of the process is to take decisions which can be taken either to improve the
performance of the employees, take the required corrective actions, or the related HR decisions
like rewards, promotions, demotions, transfers etc.
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Performance appraisal
PERFORMANCE REVIEW
Performance reviews are designed to both evaluate general performance and measure progress
around specific goals. When well-structured, performance reviews offer an opportunity to
acknowledge the work of staff, address areas in need of improvement, and identify professional
development and training that will further support the staff members' career growth.
Reduce overlap of job duties and ineffective, inefficient use of employee skills
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Performance appraisal
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Performance appraisal
1. Design a legally valid performance review process; consider these legal requirements of the
performance review process: Performance appraisals should be: job-related and valid; based on a
thorough analysis of the job; standardized for all employees; not biased against any race, color,
sex, religion, or nationality; and performed by people who have adequate knowledge of the
person or job. Be sure to build in the process, a route for recourse if an employee feels he or she
has been dealt with unfairly in an appraisal process, e.g., that the employee can go to his or her
supervisor's supervisor. The process should be clearly described in a personnel policy.
2. Design a standard form for performance appraisals, and include the name of the employee,
date the performance form was completed, dates specifying the time interval over which the
employee is being evaluated, performance dimensions (include responsibilities from the job
description, any assigned goals from the strategic plan, along with needed skills, such as
communications, administration, etc.), a rating system (e.g., poor, average, good, excellent),
space for commentary for each dimension, a final section for overall commentary, a final section
for action plans to address improvements, and lines for signatures of the supervisor and
employee. Signatures may either specify that the employee accepts the appraisal or has seen it,
depending on wording on the form.
3. Schedule the first performance review for six months after the employee starts employment.
Schedule another six months later, and then every year on the employee's anniversary date.
4. Initiate the performance review. Tell the employee that you're initiating a scheduled
performance review. Remind them of what's involved in the process. Schedule a meeting about
two weeks out.
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Performance appraisal
5. Have the employee suggest any updates to the job description and provide written input to the
appraisal. Have them record their input concurrent to the your recording theirs. Have them
record their input on their own sheets (their feedback will be combined on the official form later
on in the process).
6. Record your input to the appraisal- always reference the job description and associated formal
goals for basis of review. Be sure you are familiar with the job requirements and have sufficient
contact with the employee to be making valid judgments. Use examples of behaviors wherever
you can in the appraisal to help avoid counting on hearsay. Always address behaviors, not
characteristics of personalities.
7. Hold the performance appraisal meeting. State the meeting's goals of exchanging feedback
and coming to action plans, where necessary. In the meeting, let the employee speak first and
give their input. Respond with your own input. Then discuss areas where you disagree. Attempt
to avoid defensiveness; admitting how you feel at the present time, helps a great deal. Discuss
behaviors, not personalities. Avoid final terms such as "always," "never," etc. Encourage
participation and be supportive. Come to terms on actions, where possible. Try to end the
meeting on a positive note.
8. Update and finalize the performance appraisal form. Add agreed-to commentary on to the
form. Note that if the employee wants to add attach written input to the final form, he or she
should be able to do so.
9. Note that if the supervisor has been doing a good job supervising, then nothing should be
surprising to the employee during the appraisal. Any performance issues should have been
conveyed when they occurred, so nothing should be a surprise in the review meeting.
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Performance appraisal
CASE STUDY: PERFORMANCE REVIEW AT PINEHURST
Pinehurst Resorts & Country club believes that its employees should learn as much as they can
about their performance so that they can be even more effective in the future.
Pinehurst has a structured, formalized review system that gives every associate and manager the
chance for a detailed, constructive review at least once a year. We see that system as both a
tremendous commitment and accomplishmentconsidering that we have nearly 1,000 people on
our staff.
The resort follows several guidelines to ensure the best results. First, supervisors prepare for the
process. Supervisors give associates a copy of the review form and ask them to review their
performance. That encourages a healthy selfcriticism in associates and gives them an
opportunity to familiarize themselves with the questions and categories the review will address.
After this selfevaluation, supervisors schedule a formal appointment with the associate.
Supervisors set the appointment in advance so the review comes as no surprise. The appointment
is set for a period with minimum conflict. Supervisors should not schedule review in between
appointments on their calendars. The interview itself needs to be held in a productive climate;
there should be no interruptions, and the setting should be private and comfortable.
Generally the supervisors approach reviews in this way. First, they set an appointment with the
associate. When the associate arrives in their office, they try to establish a comfortable
atmosphere before getting started. After establishing a relatively stressfree atmosphere, the
supervisor conducts that evaluation a productive experience.
Near the end of the review, supervisors spend time with the associate establishing goals for the
upcoming year. Sometimes, these goals can be regular daytoday performance issues on the
job; in other cases, goals could be special project or educational opportunities. Associates leave
the evaluation with an understanding of their past performance, as well as what their future
performance and achievements can be. For the management end, a successful performance
review means weve contributed to one of our most important responsibilities: the training and
development of our staff.
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Performance appraisal
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Performance appraisal
A look at methods
Performance Appraisal can be conducted in various ways but there are some ways that are: Past
Oriented and Future Oriented.
Past Essay
Oriented
are those methods that assess Assessment
the employees
past performance and give
Appraisal
Centers
suggestions for improvement.
Graphics Rating Scale
Management by Objectives
It is not enough if only the past performance is assessed. How an employee can perform in future
Field Review
360-degree Performance
is equally important. Hence focus should be more on employee potential and setting future
Appraisal
performance
goals. The
future oriented techniques are used for this purpose.
Forced Choice
Rating
Critical Incidents Appraisal
Work
Standards
Approach
PAST
ORIENTED
METHOD
Methods
1.Ranking
Essay appraisal
to Man Comparisons
InMan
its simplest
form, this technique asks the rater to write a paragraph or more covering an
individuals strength, weakness, potential and so on. In most selection situations, particularly
Checklist Method
those involving professional, sales or managerial positions, essay appraisal from former
Performance
Test or
and
employers,
teachers
associates carry significant weight. The assumption seems to be that
Observation
an
honest and informed statement either by word or mouth or in writing - from someone
who knows a man well, is fully as valid as more formal and more complicated methods.
Confidential report
The biggest drawback to essay appraisals is their variability in length and content. Moreover,
since different essays touch on different aspects of 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.
31
Performance appraisal
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 supplemented by a few essay questions.
3. 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 graphics ratings
are often combined with a systematic review process. The field review is one of the 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 employees rating
with them to
a) Identify areas of inter-rater disagreement
b) Help the group arrive at consensus and
c) Determine that each rater conceives the standards similarly
4. Forced choice rating
Like the review, 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 group of statements those which best fit the individual being
rated and 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 raters does not know what the
scoring rates for each statement are, in theory at least, he cannot play favourites. He simply
describes his people and someone in the personnel department applies the scoring rates 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 scored-guessed or tricked into making honest appraisals.
A few clever raters even found ways to best beat the system. When they want to give average
employee a higher rating, they simply describe the best employee they know. An additional
32
Performance appraisal
drawback is the difficulty and cost of developing forms. Consequently , the technique is
usually limited to middle and lower management levels where the jobs are sufficiently
similar to make standard common forms feasible. Finally forced choice forms tend to be a
little value and probably have a negative effect when used in performance appraisal
interviews.
Performance appraisal
delay feedback to employees and it is hardly desirable to wait six months or a year to
confront an employee with a misdeed or a mistake.
Finally the supervisors set the standards. If they seem unfair to subordinate, might he not be
more motivated atleast has some say in setting or atleast agreeing to the standards against
which he is judged.
7. Ranking Methods
34
Performance appraisal
For comparative purposes, particularly when it is necessary to compare people who work for
different supervisors, individuals statements, ratings or appraisal form are not particularly
useful. Instead , it is necessary to recognize that comparisons involve an overall subjective
judgement to which a host of additional facts and impressions must somehow be added.
There is no single form or way to do this.
Comparing people in different units for the purpose of, say choosing a service supervisor or
determining the relative size of salary increases for different supervisors requires subjective
judgement, not statistics. The two most effective methods are alternation ranking and
comparison ranking.
Alternation Ranking: In this method the names of employees are listed on the left hand side
of a 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 top list, cross his name off
and put it at the top of the column on 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.
8. Man-to-Man comparisons
35
Performance appraisal
The American Army used this method during World War I , under this method Certain
Factors are selected for the purpose of analysis such as leadership , dependability and
initiative and scale is designed for the rater for each factor. A scale of man is also created for
each selected factor. The each man to be rated is compared with the man in the scale and
certain scores for each factor is awarded to him. In other words, instead of comparing a
whole name to a whole man, personnel are compared to the key man in respect of one
factor at a time. This method id knows as factor comparison method. The defect of this
method is that the developing a scale is quite tough and complicated method.
9. Checklist Method
It is the simplest form of evaluation method. Under this method a list of statements
describing the job related behavior of the employees is given to the evaluator. If the evaluator
perceives that the employee possess a particular trait, the statement is checked and if he feels
that the employees does not possess that quality he leaves it blank. He then submits it to the
human resource department where counting of the checks is carried out and performance is
assessed.
FUTURE-ORIENTED
36
Performance appraisal
1. Assessment Centre
So far, we have been talking about assessing the past performance. What about the future
performance or potential? In any placement decision and even more so in promotion
decision, some prediction of future performance is necessary. How can the kind of prediction
be made most validly and fairly?
One widely used rule of thumb is that what a man had done is the best predictor of what he
will do in future. But suppose you are picking a man to be supervisor and this person has
never held a supervisory responsibility? Or suppose you are selecting a man for a job from
among a group of candidates , none of who had done the job or one like it? In these
situations, many organizations use assessment centers to predict future performance more
accurately
Typically, individuals from different department 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 for each participant. Less structured, subjective judgments
are also made.
There is a good deal 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 visibility in an organization to become
visible and , in the competitive situation of an assessment centers, show how they stack up
against people from more well know departments. This has the effect of equalizing
opportunity . Improving morale and enlarging the pool of possible promotion candidates.
2. Management by objectives
37
Performance appraisal
The use of management objectives was first widely advocated in the 1950s by the noted
management theorist Peter Ducker. MBO (management by objectives) methods of
performance appraisal are results oriented. That is, they seek to measure employee
performance by examining the extent to which predetermined work objectives have been
met. Usually the supervisor and subordinate establish the objectives jointly. An example of
an objective for a sales manager might be : Increase the gross monthly sales volume to $
250000 by 31-July. Once an objective is agreed, the employee is usually expected to self
audit, that is to identify the skills needed to achieve the objective, typically they do not rely
on others to locate and specify their strengths and weaknesses. They are expected to monitor
their own development and progress.
The main advantage of the MBO approach is to overcome some of the problems that arise as
a result of assuming that the employees traits, the MBO method concentrates on actual
outcomes. If the employee meets or exceeds the set of objectives, then he or she has
demonstrated an acceptable level of job performance. Employees are judged according to
real outcomes and not on their potential for success or on someones subjective opinion of
their abilities.
The guiding principle of the MBO approach is that direct results can be observed, whereas
the traits and attributes of employees must be guessed or inferred. The MBO method
recognizes that fact that it is difficult to neatly dissect all the complex and varied elements
that go to make up employee performance. MBO advocates claim that the performance of
employees cannot be broken up into so many constituent parts, as one might take part an
engine to study it. But put all the parts together and the performance may be directly
observed and measured.
MBO methods of performance appraisal can give employees a satisfying sense of autonomy
and achievement. But on the downside, they can lead to unrealistic expectations about what
can and cannot be reasonably accomplished. Supervisors and subordinates must have very
good reality checking skills to use MBO appraisal methods.
They will need these skills during the initial stage of objective setting and for the purpose of
self auditing and self motivating, Unfortunately, research studies have shown repeatedly that
human beings tend to lack the skills needed to do their own reality checking. Nor does
training easily convey these skills. Reality itself is an intensely personal experience, prone to
38
Performance appraisal
all forms of perceptual bias. One of the strengths of MBO method is the clarity of purpose
that flows from a set of well articulated objectives. But this can be a source of weakness also.
It has become very apparent that the modern organization must be flexible to survive.
Objectives, by their very nature tend to impose certain rigidity. Of course the obvious answer
is to make the objectives more fluid and yielding. But the penalty for fluidity is loss of
clarity. Variable objectives may cause employee confusion. It is also possible that fluid
objectives may be distorted to disguise of justify failures in performance.
The first step is to establish the goals each subordinate is to attain. In some organizations,
superiors and subordinates work together to establish goals. In others. Superiors establish goals
for subordinates. The goals typically refer to the desired outcome to be achieved. These goals can
then be used to evaluate employee performance.
The second step involves setting the performance standard for the subordinates in a previously
arranged time period. As subordinates perform, they know fairly well what there is to do, what
has been done, and what remains to be done.
In the third step, the actual level of goal attainment is compared with the goals agreed upon. The
evaluator explores reasons for the goals that were not met and for the goals that were exceeded.
This step helps determine possible training needs. It also alerts the superior to conditions in the
organization that may affect a subordinate but over which the subordinate has no control.
The final step involves establishing new goals and, possibly new strategies for goals not
previously attained. At this point, subordinate and superior involvement in goal-setting may
change. Subordinates who successfully reach the established goals may be allowed to participate
more in the goal setting process the next time. The process is repeated. As with other approaches.
39
Performance appraisal
MBO too has been criticized. One comment made against the approach is that it is not applicable
to all jobs in all organizations. Jobs with little or no flexibility. Such as assembly-line work, are
not compatible with MBO. An assembly-line worker usually has so little job flexibility that the
performance standards and objectives are already determined. The MBO process seems to be
most useful with managerial personnel 'and employees who have a fairly wide range of
flexibility and self-control in their jobs. Besides, when the result of an MBO system are to be
used to allocate organizational rewards, employees may be less likely to establish challenging
goals-goals they are confident that they can accomplish. Further, the allocation of merit pay on a
semi-annual or annual basis may encourage the setting up of goals with short time horizons to
the disadvantage of important long-term goals.
Performance appraisal
administered on an annual basis for each financial year. The 360 degree performance
appraisal provides a broader perspective about an employees performance. It facilitates
greater self-development of the employees. Multi-source development feedback is highly
useful. It enables the employee to compare his or her perception about with perception of
others. It provides a formalized link between the employee and his or her customer. It helps
in identifying and measuring interpersonal skills, customer satisfaction and team building
skills. The 360-degree feedback system provides managers an opportunity to learn from their
mistakes
and
incorporate
the
learning
in
their
managerial
process.
A figure to make clear the actual functioning of the 360-degree Performance
Top Management
(Internal Customer)
Manager (Internal
Customer)
Suppliers (External
Customer)
Employee
Subordinate (Internal
Customer)
Clients (External
Customer)
Co-workers
or team
members
(Internal
Customer)
Other
Department
Representati
ve
(Internal
Customer)
41
Performance appraisal
42
Performance appraisal
5. Behaviorally anchored Rating Scales
Behaviorally anchored scales are also called behavioral expectation scales. They are rating
scales whose scale points are determined by statements of effective and ineffective behaviors.
The exponents of BARS claim that it is more reliable and advantageous method of
performance appraisal. It is defined to identify critical areas of performance of a job. Under
this method the critical areas of effective and ineffective performance behavior for getting
results are recognized. The evaluator is required to observe the behavior of the employee
while performing the job. He then compares these behavioral observations with behaviorally
anchored ratings scales. Experimental studies of BARS has collected eight performance
criteria namely knowledge and judgment, human relation skills, conscientiousness, skills in
operation of register, organizational ability, skill in monetary transaction, observational
ability. This method is more valid and expected to give more reliable results as it minimizes
the errors in performance appraisals. It identified measurable behavior therefore mere
scientific.
43
Performance appraisal
LIMITATIONS OF PERFORMANCE APPRAISAL TECHNIQUES
1. Halo Effect
The rater may base the full appraisal on the basis or one positive quality which was found out
earlier. For e.g. If a person is evaluated on one quality i.e. emotional stability and if he scores
very high in the case of emotional stability, then the rater may also give him high scores (marks
or grades) for other qualities such as intelligence, creativity etc., even without judging these
characteristics
3. Central Tendency
Sometimes a rater gives only middle range scores to all individuals. Extremely high or low
scores are avoided. This is called Central Tendency.
4. Personal Bias
Performance appraisal is affected by personal bias of the rater. If the rater has good relations with
the rate (an employee who is getting rated), he may give higher scores to the rate, even though
the rate does not deserve such high scores. So personal bias may lead to favored treatment for
some employees, and bad treatment to others.
44
Performance appraisal
5. Paper Work
Some supervisors complain that performance appraisal is pointless paper work. They complain
because many times, performance appraisal reports are found only in the files. It does not serve
any practical purpose. In other words, the performance appraisal reports are not used by some
organizations. They are conducted just as a formality or for the name sake.
8. Horn Effect
Sometimes the raters may evaluate on the basis of one negative quality. This results in overall
lower rating of the particular employee. For e.g. "He does not shave regularly. Therefore, he
must be lazy at work."
9. Spillover Effect
45
Performance appraisal
In this case, the present performance appraisal is greatly influenced by past performance. A
person who has not done a good job in the past is considered (assumed) to be bad for doing
present work.
Performance appraisal
The next step in the appraisal process is to measure the performance. We revert to the moral of
the story narrated in the beginning of this chapter. The moral taught us that we need to measure
the performance and not mere activities.
What then is performance? Performance is essentially what an employee does or does not do.
Employee performance common to most jobs include the following elements:
Quantity of output
Quality of output
Timeliness of output
Presence at work
Cooperativeness
In addition to these, other elements that deserve assessment are job knowledge, leadership
abilities, judgment, supervision, versatility and health. Assessment should also include one's
potential to perform and not just actual performance.
PERFORMANCE INTERVIEW
47
Performance appraisal
Performance interview is another step in the appraisal process. Once appraisal has been made
of employees, the raters should discuss and review the performance with the ratees, so that they
will receive feedback about where they stand in the eyes of superior. Feedback is necessary to
effect improvement in performance, especially when it is inadequate. Specifically, performance
interview has three goals:
(i)
(ii)
(iii)
Raters offer feedback to the ratees through several methods-tell and sell, tell and listen,
problem solving and mixed. In tell and sell, also called directive interview, the interviewer let
assesses know how well they are doing and sells them on the merits of setting specific goals for
improvement, if needed. The tell and listen interview provides the subordinates with chances to
participate and establish a dialogue with their superiors. Its purpose is to communicate the rater's
perceptions about the ratee's strength and weaknesses and let the subordinates respond to these
perceptions. In the problem -solving or participative interview, an active and open dialogue is
established between the superior and the subordinate. Not only are perceptions shared, but also
solutions to problems are presented, discussed, and sought. Mixed interview is a combination of
tell and sell and problem solving interviews.
Whatever be the approach followed, the emphasis in the interview should be on counseling
and development and not on criticism, witch-hunting and buck passing. Because of the
significance of appraisal interview, every effort must be made to make it effective. Guidelines
given in Table below will help make the interview successful.
Performance appraisal
Minimize interruptions
Listen
Be specific
Complete form
49
Performance appraisal
The final step in the evaluation process is the use of evaluation data. The data and information
generated through performance evaluation must be used by the HR department.
It may be recollected that the most significant rewards employers offer to employees are:
1. Money to purchase goods and services required not only for current and future survival, but
also for the luxuries modern life has to offer.
2. The opportunity to use innate and learned skills and talents in a productive manner that the
individual and his or her managers and co-workers recognize as valuable.
3. Opportunities to interact with other people in a favorable working environment.
4. Opportunities to learn, grow, and make full use of their potential.
5. A sense of performance and stability through the continuing existence of the organization and
the job.
6. The opportunity to perform work assignments within an environment that not only protects.
But promotes physiological, emotional and psychological health.
In one way or another, data and information outputs of a performance-appraisal programme can
critically influence these coveted employer-employee reward opportunities. Specifically, the
data and information will be useful in the following areas of HRM:
I. Remuneration administration
2. Validation of selection programmes
3. Employee training and development programmes
4. Promotion, transfer and lay-off decisions
5. Grievance and discipline programmes
6. HR planning
CHALLENGES OF PERFORMANCE APPRAISAL
50
Performance appraisal
The problem with subjective measure is the rating which is not verifiable by others and has the
opportunity for bias. The rate biases include:
(a)halo effect,
(b) the error of central tendency,
(c)the leniency and strictness biases,
(d) personal prejudice, and
(e)the recent performance effect
(a) Halo Effect:
It is the tendency of the raters to depend excessively on the rating of one trait or behavioral
consideration in rating all others traits or behavioral considerations. One way of minimizing
the halo effect is appraising all the employees by one trait before going to rate on the basis of
another trait.
(b) The error of Central Tendency:
Some raters follow play safe policy in rating by rating all the employees around the middle
point of the rating scale and they avoid rating the people at both the extremes of the scale.
They follow play safe policy because of answerability to management or lack of knowledge
about the job and person he is rating or least interest in his job.
(c)The Leniency and Strictness:
The leniency bias crops when some raters have a tendency to be liberal in their rating by
assigning higher rates consistently. Such ratings do not serve any purpose. Equally damaging
one is assigning consistently low rates.
(d)Personal Prejudice:
51
Performance appraisal
If the rater dislikes any employee or any group, he may rate them at the lower end, which
may distort the rating purpose and affect the career of these employees.
(e)The Recent performance Effect:
The raters generally remember the recent actions, of the employee at the time of rating and
rate on the basis of these recent actions favorable or unfavorable than on the whole activities.
52
Performance appraisal
Data Hygiene / Appends, Profile Analysis, Merge Purge, Duplication Elimination, Online
Count System, NCOA(National Change OF Address), CASS report, OASPro, Tally etc. to
companies .
They engage with client by undertaking complex application development, Database projects
or Web site projects using our Delivery Platform or help you in implementing applications
support or manage Databases.
With Design and development expertise in diverse platforms, usage of best-of-breed tools and
techniques, combined with their state-of-the-art software development facilities, SOFTGAINZ
delivers significant business benefits.
They integrate their disparate data sources into a single, cohesive marketing database, so you
can understand, cultivate and profit from your greatest asset. your customers.
Company Overview
53
Performance appraisal
" Complete commitments to helping clients achieve result "
SOFTGAINZ Technologies is a fast growing IT services Company. The Company commenced
its operations in April 2005 providing Web-based Solutions, gradually evolving into a pure IT
SERVICES COMPANY. Today, it provides a wide range of IT Services including Database
Management, Application and Webpage design and Development, etc. to companies in India
and the US.
They engage with client by undertaking complex application development, Database projects
or Web site projects using our Delivery Platform or help them in implementing applications
support or manage Databases.
They can then build a long term outsourcing partnership relationship to manage your
applications or Databases, your processes and even 24X7 DBA support.
Applying innovations to their own operations has also given them unique insight into how to
address their customers business issues.
The depth of their experience enables them to guarantee many projects success at a fixed price.
It is this combination of hands-on experience and relentless focus on results.
SOFTGAINZ Technologies delivers sound and cost effective solutions to your requirements.
We have office that is staffed by talented and experienced professionals whose expertise spans
the Retail, Manufacturing, Financial Services, Utilities, Pharmaceuticals, Media and Textile
Domains.
They have structured their organization to give clients what they need, when they need it, and
built in ways to uncover new efficiency opportunities for them before they realize it
themselves. They believe that their attention to detail, responsiveness, accuracy, and
commitment to our clients is unmatched.
SOFTGAINZ SERVICES
54
Performance appraisal
Application Development:
With design and development expertise in diverse platforms, usage of best-of-breed tools and
techniques, combined with our state-of-the-art software development facilities, SOFTGAINZ
Technologies delivers significant business benefits to its customers.
Database Management:
SOFTGAINZ manages all your incoming customer data via mail, web, email and data feed,
and insures that the data is scrubbed, checked for duplication, and fully integrated into your
customer database.
List Management:
SOFTGAINZ can update and maintain your lists/database for order fulfillment. The average
turnaround time for an order is one business day. Nth name extraction or extraction by list
variables is available
55
Performance appraisal
Objectives
1. To attach a clear set of roles and responsibilities to each position in the organization.
2. To provide opportunities for employees to understand, participate and take responsibility
for accomplishing business goals and objectives.
3. To review individuals performance in terms of objectives set and link it to performance
related pay.
4. To continually help individuals to develop and enhance the necessary competencies and
address issues affecting their effectiveness.
5. To foster an open dialogue between superior and subordinate.
Performance appraisal
1. Position Roles and Responsibilities
The Employee Dialogue begins with this module and it is pre-requisite for other 2 modules.
As every position has some rules and regulations, this module help in defining these roles
and responsibilities. The Position Description is a result of discussion between the employee
and his superior regarding his expected role and perceived role and at the end arriving at an
expected role and responsibilities of the position. Position Description changes with changes
in role and responsibilities.
Persons involved are
Employees
Superiors
Division head
Peers and Colleagues who know the requirement of the position
Why is it done?
Forms Used
A1
A2
57
Performance appraisal
2. Performance Objective Setting and Review
This module ensures that the corporate objectives are laid down and individual objectives are
simultaneously laid down in line with the corporate goals. All this is done in the form of a
dialogue between the superior and the employee. It also ensures that performance is reviewed
objectively not only in terms of actual achievement/ non achievement of targets, but also
keeping in mind the context in which performance was delivered. This module would give
inputs for increment as well as future potential.
Employee
Superior
Why is done?
Forms Used
B1
B2
B3
58
Performance appraisal
3. Effectiveness Mapping and Action Plan
This module aims at enhancing the effectiveness of the individual vis--vis his/her specific
position by mapping the behavioural competencies and functional/technical knowledge
required by the position and comparing the individual competencies and may affect the
individuals effectiveness on the job. It also has an Action Plan that rectifies the competency
and knowledge gap.
Employee
Superior
Why is it done?
Forms Used
C1
C2
59
Performance appraisal
ABOUT THE FORMS:
A1
This form is filled in the beginning of the financial year. This form states the identity and
the position of the employee. It specifies the purpose for which the position exists in the
organization. It gives the clear view of the size of the firm Financial and Non Financial. It
even shows the impact of external and internal factors on his position. Hence his/her
minimum requirements in terms of education, experiments, specific knowledge and
business understanding are also specified. The mutual consent of the superior and the
subordinate is also displayed through their signatures.
A2
This form is also filled in the beginning of the financial year and it also specifies the
employees identity. It mentions the Area of responsibility by giving the heading and
definition of the project and the results expected from the project. It states whether the
level of responsibility is shared, supported or fully taken over by the employee. At the
end it makes it clear whether the measurement criteria in quantitative or qualitative.
B1
Here the objectives are set taking into considerations the business environment. It shows
the business trends analysis and the business conditions, those are expected to affect
positively or negatively the position and performance of the employee. It also specifies
the long term and short-term business objective.
B2
This form is further divided into B2a, B2b and B2c and each form is setting individual
objectives.
B2a is for the Head and the commercial Head of the Business Division.
B2b is for the Unit Head in the business Division.
B2c is for the corporate Division/ Department Heads.
It also gives employee details and specifies the objective. The objective is further divide
into Objective A and Objective B.
60
Performance appraisal
Objective A includes the financial Objective
Objective B includes the following Objectives:
Financial Objective; they are those objectives those are not included under
Objective A.
Process Focused Objective; these can be cost reduction, process improvement etc.
Employee Focused Objective; it basically involves the objective that deal with
satisfying the needs of the employees by giving proper training when and where
needed, identifying performers and non-performers etc.
Customer Focused Objective; this includes satisfaction survey, checking the
market share etc.
This form is filled in the beginning and again when the Objective are achieved. The sign
and date are displayed to show mutual consent and when the required data was filled.
B3
This form reviews the performance of the employee in the particular financial year. It
states whether the objectives are Consumer, Finance, Processes and Employee focused. It
also mentions whether the objectives are achieved, not achieved, exceeded the
expectation or is not considered at all.
The employee is given an overall performance rating by stating whether he needs
improvement or meets expectation or exceeds expectations. In this form employee is also
free to give his comment, whether negative or positive.
C1
This form is for effectiveness Mapping and action plan. It mentions the behavioural
competencies and the functional and technical knowledge. This form covers other issues
concerning effectiveness, core competence and future career interest/aspirants of the
employee.
C2
It specifies the behavioral competency gaps for functional/technical gaps and other issues
as identified in form C1. It also specifies actions to be taken, the resources and support
required and the time frame within which it is to be completed. During the dialogue the
progress on the objective as well as the action plans should be reviewed.
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Performance appraisal
RESEARCH AND SURVEY
Study
The study was conducted in SOFTGAINZ LTD to know:
o To know the practical aspect of Performance Appraisal in SOFTGAINZ LTD
o To know the emphasis and importance given to employees performance and their
effect on corporate goals.
o To interview the managers on the performance appraisal format used by the company.
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Performance appraisal
Research Methodology
The data source: Primary as well as Secondary
The research approach: Survey Method
The research instrument: Questionnaire
The respondents: The managers of various departments in SOFTGAINZ LTD.
The primary data was collected with the help of survey information. A concise questionnaire
was prepared keeping in mind the information specifications.
Performance appraisal
8. To know whether the appraisal system gives the opportunity to reflect and assess
appraisees personality and competences factor required.
9. To know whether the appraisal
performance review discussion.
10. To know whether the appraisal system gives the appraise a chance to express his
developmental needs.
11. Does this appraisal system has the scope for correcting the biases of reporting officer
through review process?
12. Does the appraisal system strengthen the appraiser-appraisee relationship through
mutuality and trust?
13. Does it give insight to appraise regarding his strength or weakness?
14. Are the employees able to discover their potential?
15. Does the appraisal system provide a good communication between the top-management
plans and business goals to staff below?
16. Are the objectives of appraisal system clear to all employees?
17. Are there any periodic orientation programs to explain objectives and other details of the
appraisal system?
18. Are the data generated through appraisal system are objective indicators of individual
performance?
RECOMMENDATIONS
AND
CONCLUSION
64
Performance appraisal
Appraisals help in carrying out an overall performance evaluation of the persons engaged in
any organization. It is a method which gives sufficient information to the management so that
it can take necessary steps to improve them.
The personnels should be assessed on overall performance, which covers technical as well as
behavioral aspects. In order to effectively utilize the potential of our executives it is
important to identify the strength as well as the areas of development. These suggestions are
provided to all the questions that are ranking below 4 as those are the critical areas that
require to be looked into.
Serial
no.
1)
According to the findings it is clear that appraisers and appraise cannot discuss
openly through performance review discussions. Communication is very essential
for any system to function efficiently. There should be a Performance review
Discussion that will allow the appraiser to express his problem as to why he is not
capable of achieving the target and the appraiser would be in a good position to
provide him the exact training he requires.
2)
Nobody is perfect yet it is human to try to be perfect. There are many obstacles
that hinder the development of an employee. Unless these development needs are
not expressed to the appraiser these obstacles cannot be eliminated hence the
Performance Appraiser should be conducted in a manner where the appraiser gets
the chance to express his development needs.
3)
Wherever there are favoritisms the real talented people will not get a chance to
develop, this in turn will demotivate him which result in disloyalty and inefficient
performance in the organization by that particular employee. Hence the companies
should be free from personal bias. The appraiser should be evaluated ethically.
65
Performance appraisal
4)
If the employers and the employees are not able to achieve the mutual that is
require than they will have a poor communication or may be sometimes a major
misunderstanding that will effect their performance and ultimately the entire
performance of the organization, therefore the appraiser should have full confident
in his employee and performance appraisal should be not more of monotonous
ritual but a way to develop mutuality and trust between each other
5)
If the goals of the individual are not in tune with the organizations goals of the
organization then there is a divergence in the functioning of both , the individual
and the organization. This will result in inefficient functioning and low
productivity in the organization. Hence Performance Appraisal System should be
in designed such a way that the organizations plan and goals are clear to the
employee and he fixes his goal in tune with the organization goals.
6)
7)
8)
The data (ratings as well as other qualitative inputs) generated through appraisal
system should be objective indicators of individual performance or else there will
not be any meaning to the Performance Appraisal and the employee will not take it
seriously
Appendies
66
Performance appraisal
Name: ___________________________
Rank
5. Do you think you should be given an opportunity to rate your own performance?
a. Yes
b. No
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Performance appraisal
6. Are you given a chance to rate your own performance?
a. Yes
b. No
7. Timing of Appraisals
a. Monthly
b. Quarterly
c. Half Yearly
d. Annual
e. Anytime
8. Does the credibility of Appraiser affect the Performance Appraisal System?
a. Yes
b. No
9. Is there a complaint channel for the employees who are dissatisfied with the performance
appraisal system?
a. Yes
b. No
10. Are the standards on the basis of which the performance appraisal is carried out
communicated to the employees before hand?
a. Yes
b. No
11. Who conducts the performance appraisal?
a. Immediate supervisor
b. Peer appraisal
c. Rating committees
d. Self-rating
e. Appraisal by subordinates
12. Is the performance Appraisal successful in giving a clear understanding of the appraisees
job to both appraiser and appraise?
a. Yes
b. No
a. Yes
b. No
14. Does the appraisal system provide a good communication between the top-management
Performance appraisal
a. Yes
b. No
15. Do you want your comments and suggestions to be taken into consideration during
appraisal?
a. Yes
b. No
16. Is there a post appraisal interview conducted?
a. Yes
b. No
Name: ___________________________
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Performance appraisal
2. Does the system provide you a chance to communicate the support you need from your
subordinate to perform the job well.
a. Yes
b. No
5. Timing of Appraisals
a.
b.
c.
d.
e.
Monthly
Quarterly
Half Yearly
Annual
Anytime
De-motivation
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Performance appraisal
b.
c.
Retention
Ineffective teamwork
7. Does the appraisal system provide a good communication between the top-management
a. Yes
b. No
9. Are employees comments and suggestions taken into consideration before the appraisal?
a. Yes
b. No
12. Are the standards on the basis of which the performance appraisal is carried out
communicated to the employees before hand?
a. Yes
b. No
13. Do you give an opportunity to the appraisee to rate his own performance?
a. Yes
b. No
14. Do you act upon the results of your performance appraisal?
a. Yes
b. No
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Performance appraisal
7. BIBLIOGRAPHY
BOOKS
Performance appraisal
WEBSITES
www.ask.com
www.google.com
www.SAFEEXPRESS.com
www.wikipedia.com
www.kclblog.com
www.appraisals.naukrihub.com
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