Human Resource

Management

Performance Appraisal and

Performance Management
Performance appraisal
Evaluating an employees current and/or
past performance relative to his or her
performance standards.
Performance management
The process employers use to make sure
employees are working toward
organizational goals.

Difference between PM and PA

The
process
of
evaluating how
well
employees
perform their
jobs
and
then
communicating
that information to
the
employees.

Processes used to
identify,
encourage,
measure,evaluat
e,
improve, and
reward
employee
performance.

Performance appraisal

Definitions
According to Newstrom, It is the process of
evaluating the performance of employees, sharing
that information with them and searching for ways to
improve their performance.

Meaning
Performance appraisal
is the step where the
management finds out how effective it has been at
hiring and placing employees.
A Performance appraisal is a process of
evaluating an employees performance of a job in terms
of its requirements.

WHY THE PERFORMANCE Appraising

Appraisals play an integral role in the
employers performance management process.
Appraisals help in planning for correcting
deficiencies and reinforce things done correctly.
Appraisals, in identifying employee strengths
and weaknesses, are useful for career planning
Appraisals affect the employers salary raise
decisions.

Benefits of Performance Appraisal

Continuous improvement
A management philosophy that requires
employers to continuously set and relentlessly
meet ever-higher quality, cost, delivery, and
availability goals by:
Eradicating the seven wastes:
overproduction, defective products, and
unnecessary downtime, transportation,
processing costs, motion, and inventory.
Requiring each employee to continuously
improve his or her own personal performance,
from one appraisal period to the next.

Performance Appraisal Roles

Supervisors
Usually do the actual appraising.
Must be familiar with basic appraisal
techniques.
Must understand and avoid problems that
can cripple appraisals.
Must know how to conduct appraisals
fairly.

Performance Appraisal Roles (contd)

HR department
Serves a policy-making and advisory role.
Provides advice and assistance regarding
the appraisal tool to use.
Prepares forms and procedures and insists
that all departments use them.
Responsible for training supervisors to
improve their appraisal skills.
Responsible for monitoring the system to
ensure that appraisal formats and criteria
comply with EEO laws and are up to date.

Steps in Appraising
Performance
1.Defining the job
Making sure that you and your subordinate agree
on his or her duties and job standards.

2.Appraising performance
Comparing your subordinates actual
performance to the standards that have been set;
this usually involves some type of rating form.

3.Providing feedback
Discussing the subordinates performance and
progress, and making plans for any development
required.

Designing the Appraisal

Tool
What to measure?
Work output (quality and quantity)
Personal competencies
Goal (objective) achievement
How to measure?
Graphic rating scales
Alternation ranking method
MBO

Performance Appraisal Methods

Performance Appraisal
Methods
Graphic rating scale
A scale that lists a number of traits
and a range of performance for each
that is used to identify the score that
best describes an employees level of
performance for each trait.

Graphic
Rating
Scale with
Space for
Comment
s

915

2005 Prentice Hall Inc. All rights reserved.

Figure 93

Comparative methods
Ranking
A listing of all employees from highest to
lowest in performance.
Drawbacks
Does not show size of differences in
performance between employees
Implies that lowest-ranked employees
are unsatisfactory performers.
Becomes difficult process if the group to
be ranked is large.

Forced-Choice Method
A trait approach to performance appraisal that requires the
rater to choose from statements designed to distinguish
between successful and unsuccessful performance.
Similar to grading on a curve; predetermined
percentages of rates are placed in various performance
categories.
Example:
15% high performers
20% high-average performers
30% average performers
20% low-average performers
15% low p

Behavioral /Objective methods

Behavioral Rating Approach
Assesses employees behaviors instead of other
characteristics
Consists of a series of scales created by:
Identifying important job dimensions
Creating statements describing a range of
desired and undesirable behaviors (anchors)
Type of behavioral scale
Behaviorally anchored rating scales (BARS)
BARS is an appraisal tool that anchors numerical
rating scale with specific examples of good or
poor performance.

Behavioral /Objective methods

Management by Objectives
Specifying the performance goals that an individual
and his or her manager agree that employee will
try to attain within an appropriate length of time.

Key MBO Ideas

Employee involvement creates higher levels of
commitment and performance.
Encourages employees to work effectively toward
achieving desired results.
Performance measures should be measurable and
should define results.

Narrative Methods
Critical Incident
Manager keeps a written record of highly
favorable and unfavorable employee actions.
Drawbacks
Variations in how managers define a
critical incident
Time involved in documenting employee
actions
Most employee actions are not observed
and may become different if observed

Narrative Methods(contd..)
Essay
Manager writes a short essay describing an
employees performance.
Drawback
Depends on the managers writing skills
and their ability to express themselves.

360 Feed Back System

A system of collecting performance information
from multiple parties.
Multiple parties include ones subordinates peers,
supervisors and customers
It is also used to design promotion and reward.

360 degree performance appraisal

Potential Rating Scale

Appraisal Problems
Unclear standards
An appraisal that is too open to interpretation.
Halo effect
Occurs when a supervisors rating of a subordinate
on one trait biases the rating of that person on
other traits.
For example, supervisors often rate unfriendly
employees lower than the others, on all traits.
Central tendency
A tendency to rate all employees the same way,
such as rating them all average.

Potential Rating Scale Appraisal

Problems (contd)
Strictness/leniency
The problem that occurs when a supervisor
has a tendency to rate all subordinates either
high or low.
Bias
The tendency to allow individual differences
such as age, race, and sex to affect the
appraisal ratings employees receive.

How to Avoid Appraisal

Problems
Learn and understand the potential problems, and
the solutions for each.
Use the right appraisal tool. Each tool has its own
pros and cons.
Train supervisors to reduce rating errors such as
halo, leniency, and central tendency.
Have raters compile positive and negative critical
incidents as they occur.

Who Should Do the

Appraising?
The immediate supervisor
Peers
Rating committees
Self-ratings
Subordinates
360-Degree feedback

Performance MANAGEMENT

Main Purposes of Performance

Management
Individual Rewards (Base and Incentive)
Feedback for Sub-Ordinate (Plus and Minus)
Recognition of Superior Performance
Documentation of Weak Performance
Personnel Decision-Making
Future Goal Commitments (Planned
Achievements)

Why Performance Management?

Increasing use by employers of performance
management reflects:
The popularity of the total quality
management (TQM) concepts.
The belief that traditional performance
appraisals are often not just useless but
counterproductive.
The necessity in todays globally
competitive industrial environment for every
employees efforts to focus on helping the
company to achieve its strategic goals.

Sources Of Performance
Management
Managers
Have the ability to rate employees
Feedback from MANAGERS is strongly related to
performance
Peers
Co-worker
Expert knowledge of job requirement
Observe employee daily!
Bring a different perspective in the evaluation
process - provide extremely valid assessment of
performance
Useful esp. if supervisor does not always observe
employee (e.g. law enforcement)

Sources Of Performance
Management
Subordinates
Evaluation of managers
UPWARD FEEDBACK
Self
Not often used
Observe own behaviour
Customers
Often the only best person to observe employee
performance
BEST source of information
Customer evaluation sheet
Random mail surveys
Telephone survey

Performance Management:
A four step process
Step 1: Performance Planning and Communication
Step 2: Coaching/Feedback
Step 3: Performance Review
Step 4: Staff Development

The Components of an Effective

Performance Management Process
Direction sharing
Role clarification
Goal alignment
Developmental goal setting
Ongoing performance monitoring
Ongoing feedback
Coaching and support
Performance assessment (appraisal)
Rewards, recognition, and compensation
Workflow and process control and return

Objective setting:
Be sure its S.M.A.R.T.
Specific
Measurable
Achievable
Results Oriented
Time bound