Method of evaluating the job performance of

an employee

Ongoing process of obtaining, researching,
analyzing and recording information about
the worth of an employee
1
Is useful in career planning.
Plays an integral role in performance management.
Is basis for pay and promotion decisions.
Helps in correcting deficiencies and reinforcing good
performance.
2
3
4

MAIN OBJECTIVE

Measure and improve the performance of
employees
Increase future potential and value to the
company
PROVIDING FEEDBACK

Most common justication for an organization to have a PA system.

Through its PA process the individual learns exactly how well he/she
did during the previous twelve months

Can then use that information to improve his/her performance in the
future.

PA serves another important purpose by making sure that the bosss
expectations are clearly communicated.

FACILITATING PROMOTION
DECISIONS

Almost everyone in an organization wants to get ahead.

PA makes it easier for the organization to make good decisions to
make sure the most important positions are lled by the most
capable individuals.

FACILITATING LAYOFF/DOWNSIZING
DECISIONS

When economic realities force an organization to downsize, PA helps
make sure that the most talented individuals are retained and to identify
poor performers who effects the productivity of the organisation

ENCOURAGING
PERFORMANCE IMPORVEMENT

How can anyone improve if he doesnt know how hes
doing right now?
A good performance appraisal points out areas where
individuals need to improve their performance.
MOTIVATING
SUPERIOR PERFORMANCE
Performance appraisal helps motivate people to deliver superior
performance in several ways.

First, the appraisal process helps them learn just what it is that the
organization considers to be superior.

Second, since most people want to be seen as superior performers, a
performance appraisal process provides them with a means to
demonstrate that they actually are.

Finally, performance appraisal encourages employees to avoid being
stigmatized as inferior performers
SETTING & MEASURING
GOALS


The performance appraisal process is commonly used to
make sure that every member of the organization sets and
achieves effective goals.
COUNSELLING
POOR PERFORMERS

Not everyone meets the organizations standards.

Performance appraisal forces managers to confront those
whose performance is not meeting the companys
expectations.
DETERMINING
COMPENSATION CHANGES

Almost every organization believes in pay for performance

Performance Appraisal provides the mechanism to make
sure that those who do better work receive more pay.
ENCOURAGING
COACHING & MENTORING

Managers are expected to be good coaches to their team
members and mentors to their proteges.

Performance appraisal identies the areas where coaching is
necessary and encourages managers to take an active
coaching role.
SUPPORTING MANPOWER PLANNING

Well-managed organizations regularly assess their bench
strength to make sure that they have the talent in their ranks
that they will need for the future.
Companies need to determine who and where their most
talented members are.
Performance appraisal gives companies the tool they need
to make sure they have the intellectual horsepower required
for the future.

DETERMINING
INDIVIDUAL TRAINING &DEVELOPMENT NEEDS


PA identify the necessary training and development the
employee needs to close the gap between current
performance and desired performance.
VALIDATING
HIRING DECISIONS

Is the company hiring stars, or is it lling itself with trolls?

Only when the performance of newly hired individuals is
assessed can the company learn whether it is hiring the right
people.
PROVIDING LEGAL DEFENSIBILITY FOR
PERSONNEL DECISIONS

Almost any personnel decision(termination, denial of a
promotion, transfer to another department)can be
subjected to legal scrutiny.
If one of these is challenged, the company must be able to
demonstrate that the decision it made was not based on the
individuals race or handicap or any other protected aspect.
A solid record of PAs greatly facilitates legal defensibility
when a complaint about discrimination is made.
IMPROVING OVERALL
ORGANIZATIONAL PERFORMANCE

A performance appraisal procedure allows the organization
to communicate performance expectations to every member
of the team and assess exactly how well each person is
doing.
When everyone is clear on the expectations and knows
exactly how he is performing against them, this will result
in an overall improvement in organizational success.
Review the performance of the employees
over a given period of time
Judge the gap between the actual and the
desired performance.
Help the management in exercising
organizational control.
Provide feedback to the employees regarding
their past performance.
Reduce the grievances of the employees

PERFORMANCE APPRAISAL METHODS
1
2
3
4
5
Alternation Ranking
Graphic Rating Scale
Paired Comparison
Forced Distribution
Critical Incident
6
7
8
9
10
Behaviorally Anchored Rating scales
(BARS)
Narrative Forms
Management by Objectives (MBO)
Computerized and Web-based
Performance Appraisal
Merged Methods
APPRAISAL METHODOLOGIES
FIGURE :
Sample Graphic
Rating Performance
Rating Form
A graphic rating scale
lists traits (such as
quality and
reliability or
teamwork) and a
range of performance
values (from
unsatisfactory to
outstanding, or
below expectations
to role model) for
each trait
FIGURE :One Item from an Appraisal Form Assessing Employee
Performance on Specific Job-Related Duties
This form assesses the jobs main sets
of job-specific duties, one of which is
Maintain adequate inventory of
pizza dough. Here you would assess
how well the employee did in
exercising each of these duties.

FIGURE Appraisal Form for Assessing Both Competencies and Specific Objectives
(Section I) assesses
the employees
performance
relating to both
competencies and
objectives.
The employee and
supervisor would
fill in the objectives
section at the start
of the year, and
then assess results
and set new ones
as part of the next
appraisal.
FIGURE Appraisal Form for Assessing Both Competencies and Specific Objectives (contd)
Some graphic
rating forms
assess several
things.
Section II
illustrates the
competencies an
employee is
expected to
develop and
exhibit such as
identifies and
analyzes
problems
(Problem Solving),
and maintains
harmonious and
effective work
relationships with
co-workers and
constituents
(Teamwork).
FIGURE : Scale for Alternate Ranking of Appraisee
Ranking employees
from best to worst on a
trait or traits is another
option. Supervisors
choosing the alternation
ranking method would
use a form like this to
alternately choose and
list employees who are
the highest on the
characteristic being
measured and the ones
who are the lowest.

FIGURE 96 Ranking Employees by the Paired Comparison Method
Note:
+ means better than.
- means worse than.
- For each chart,
add up the
number of +s
in each column
to get the
highest ranked
employee.
The paired comparison method helps make the ranking method
more precise. For every trait (quantity of work, quality of work,
and so on), you pair and compare every subordinate with every
other subordinate. In the paired comparison method, you make a
chart of all possible pairs of employees for each trait.

Forced distribution method
FIGURE:
FORCED
DISTRIBUTION
CURVE
Forced ranking is a method of performance appraisal to rank employee but in order
of forced distribution
For example, the distribution requested with 10 or 20 percent in the top category, 70
or 80 percent in the middle, and 10 percent in the bottom.
The top-ranked employees are considered high-potential employees and are often
targeted for a more rapid career and leadership development programs.
In contrast, those ranked at the bottom are denied bonuses and pay increases. They
may be given a probationary period to improve their performance
APPLICATION OF FORCED RANKING
GE, Ford Motor, Conoco, Sun Microsystems, Cisco Systems, EDS, Enron and a host of
other U.S. corporations have adopted similar policies of this method


Ex: A fire, sudden breakdown, accident

Workers Reaction scale

A Informed the supervisor immediately 5
B Become anxious on loss of output 4
C Tried to repair the machine 3
D Complained for poor maintenance 2
E Was happy to forced test 1
TABLE Examples of Critical Incidents for Assistant Plant Manager
CONTINUING
DUTIES
TARGETS CRITICAL INCIDENTS
Schedule production
for plant
90% utilization of personnel
and machinery in plant;
orders delivered on time
Instituted new production scheduling
system; decreased late orders by 10%
last month; increased machine
utilization in plant by 20% last month
Supervise procurement of
raw materials and on
inventory control
Minimize inventory costs
while keeping adequate
supplies on hand
Let inventory storage costs rise 15%
last month; over-ordered parts A
and B by 20%; under-ordered part
C by 30%
Supervise machinery
maintenance
No shutdowns due
to faulty machinery
Instituted new preventative
maintenance system for plant;
prevented a machine breakdown by
discovering faulty part
With the critical incident method, the supervisor keeps a log of positive and negative examples
(critical incidents) of a subordinates work-related behavior. Every 6 months or so, supervisor
and subordinate meet to discuss the latters performance, using the incidents as examples.
In Table , one of the assistant plant managers continuing duties was to supervise procurement
and to minimize inventory costs. The critical incident log shows that the assistant plant manager
let inventory storage costs rise 15%; this provides an example of what performance he must
improve in the future.

FIGURE : APPRAISAL-COACHING WORKSHEET
All or part of the written
appraisal may be in narrative
form as shown in Figure
The supervisors narrative
assessment aids the employee
in understanding where his or
her performance was good or
bad, and how to improve that
performance.


Developing a BARS
1. Write critical incidents
2. Develop performance
dimensions
3. Reallocate incidents
4. Scale the incidents
5. Develop a final instrument
Advantages of BARS
A more accurate gauge
Clearer standards
Feedback
Independent dimensions
Consistency
A behaviorally anchored rating scale (BARS) is an appraisal tool that
anchors a numerical rating scale with specific examples of good or poor
performance.
Its proponents say it provides better, more equitable appraisals than do the
other appraisal tools. It takes more time to develop a BARS, but the tool has
several advantages.



FIGURE
Example of a Behaviorally
Anchored Rating Scale for the
Dimension
Salesmanship Skills
Figure presents an
example of a section of
a final BARS
instrument that lists
the critical incidents
that serve as
behavioral anchors on
the performance scale
for the dimension
Salesmanship Skills.


A comprehensive and formal organizationwide goal-setting
and appraisal program requiring:
1. Setting of organizations goals
2. Setting of departmental goals
3. Discussion of departmental goals
4. Defining expected results (setting individual goals)
5. Conducting periodic performance reviews
6. Providing performance feedback
Employers use management by objectives (MBO) for one of two things.
Many use it as the primary appraisal method. Others use it to supplement
to a graphic rating or other appraisal method. MBO generally refers to the
comprehensive and formal organization wide goal-setting and appraisal
program.

360 DEGREE PERFORMANCE APPRAISAL
360 degree measures manners and
capacities.
360 degree improves such skills as
listening, planning and goal-
setting.
360 degree concentrates on
subjective areas, for example
efficiencies of teamwork, character,
and leadership.
360 degree supplies on the way
others think about a specific staff.

TABLE Important Advantages and Disadvantages of Appraisal Tools
Tool Advantages Disadvantages
Graphic rating scale Simple to use; provides a
quantitative rating for each
employee.
Standards may be unclear; halo
effect, central tendency, leniency,
bias can also be problems.
BARS Provides behavioral anchors.
BARS is very accurate.
Difficult to develop.
Alternation ranking Simple to use (but not as simple as
graphic rating scales). Avoids
central tendency and other
problems of rating scales.
Can cause disagreements among
employees and may be unfair if
all employees are, in fact,
excellent.
Forced distribution
method
End up with a predetermined
number or % of people in each
group.
Employees appraisal results
depend on your choice of cutoff
points.
Critical incident
method
Helps specify what is right and
wrong about the employees
performance; forces supervisor to
evaluate subordinates on an
ongoing basis.
Difficult to rate or rank
employees relative to one
another.
MBO Tied to jointly agreed-upon
performance objectives.
Time-consuming.