PERFORMANCE

APPRAISAL
Introduction

performance evaluation or performance

appraisals is the process of assessing the
performance and progress of an employee or of
a group of employees on a given job and his
potential for future development.
 DEFINITION
According to Edwin B
Flippo,
“Performance appraisal is
a
periodic and so far as humanly possible, an
systematic,
impartial rating of an employee’s excellence in
matters pertaining to his present job and to his
potentialities for a better job.”
According to Scott, Clothier and
Spriegal, “Performance appraisal is
a
record of progress for apprentices and
regular employees, as a guide in making
promotions, transfer or demotions, as a
guide in making lists for bonus distribution,
for seniority consideration and for rates of
pay, as an instrument for discovering hidden
genius, and as a source of information that
makes conferences with employees
helpful”.
According to FLIPPO,

is the systematic , periodic and an impartial

rating of an employee’s excellence in
matters pertaining to his present job and his
potential for a better job”
OBJECTIVES OF
APPRAISAL
• To determine the effectiveness of employees
on their present jobs so as to decide their
benefits.

• To identify the shortcomings of employees so

as to overcome them through systematic
guidance and training.

• To find out their potential for promotion and

advancement.
• It diagnose the strengths and weakness of
individuals so as to identify further training
needs
CHARACTERISTICS OF PERFORMANCE
APPRAISAL
it is the systematic examination of an employees strengths and
weakness interms of the job

formal procedures are used in this study. the same approach is

adopted for all job holds so that the results are comparable

it is ongoing or continuous process

it is a find out how well the employee is performing the job

employee knows that they are being evaluate

it is future oriented activity as it aims on employee
development

it is both formal or informal ; but formal is more objective as

well systematic
 PURPOSES OF PERFORMANCE
APPRAISAL
 Performance appraisal helps the management

to take decision about the salary increase of

an employee.

 The continuous evaluation of an employee

helps in improving the quality of an employee in

job performance.

 The Performance appraisal brings out the

facilities available to an employee, when the

management is prepared to provide adequate

facilities for effective performance.

 It minimizes the communication gap
between the employer and employee.
 Promotion is given to an employee on
the basis of performance appraisal.
 The training needs of an employee can
be identified through performance
appraisal.
 Important tool for motivational force
to the employee
 Feedback to employees
 Periodic review of progress
 Self examination
 The decision for discharging an employee.

 Performance appraisal is used to transfer a person.

 The grievances of an employee are eliminated

through performance appraisal.

 The job satisfaction of an employee increases morale.

CONCEPT OF
PERFORMANCE
APPRAISAL
Appraisal should be in writing and
carried at least once a year.

The performance appraisal information

should be shared with the employee.

Employee should have the opportunity

to respond in writing to the appraisal.
Employees should have a
mechanism to appeal the
results of the
performance appraisal.

Manager should have

adequate opportunity to
observe the
employees

Anecdotal notes on the

employee‘s performance
should be kept during the
entire evaluation period.
 Evaluator should
be trained to carry
out the
performance
appraisal process

Performance appraisal
should focus on employee
behaviour and results
rather than on personal
traits or characteristics.
Uses of performance appraisal

Promotion decision

Training and development

programmes

Performance feedback

Personal development
Uses cont

For judging the effectiveness of

recruitment

Assessment of individual potentials

Boosts the morale

Motivate the employees

 PRINCIPLES OF PERFORMANCE
APPRAISAL
 Single employee is rated by two raters.
Continuous and personal observation of an
employee is essential to make effective
performance appraisal.
The rating should be done by an immediate
superior of any subordinate in an
organization.
A separate department may be created for
effective performance appraisal.
 The is conveyed to the concerned
employee.
rating
 The plus points of an employee should be
recognised. At the same time, the minus points
should not be highlighted too much.
 The management should create confidence in the
minds of employees.
 The standard for each job should be determined
by the management.
 Separate printed forms should be used for
performance appraisal to each job according to
the nature of the job.
Process of performance appraisal

Step1: establish
Measures
Measures thethe
Communicate
performance with
the standards
performance
standards
actual standar ds

Dis
cus
s
th
e
res
ult
s
of
pe
rfo
rm
an
ce
ap
pra
isal
Tak
e
cor
rec
tiv
e
acti
on
 TOOLS/METHODS OF
PERFORMANCE APPRAISAL
 RANKING METHOD
An employee is ranked against the
other in the working group under this
method.
Ranking method cont

in this technique , the evaluator assigns relative

ranks to all the employees in the same work unit
doing the same job. Employees are ranked from
the best to the poorest on the basis of overall
performance.

For e.g. . 5 persons ranked

Employee Rank
A 2
B 1
C 5
D 3
 • Each employee be compared
with the other person.

Advantages • Useful in small

organization.

• Can not be used for

big organization.
• Does not evaluate the
Disadvantages individuality of an
employee.
• It lags objectivity
 PAIRED COMPARISON METHOD

Paired comparison method has been

developed to be used in a big organization.
Each employee is compared with other
employees taking only one at a time. The
evaluator compares two employees and
puts a tick mark against an employee
whom he considers a better employee.
PAIRED COMPARISONS CONT

in this each employee is compared with all

the others in pairs one at time. the number of
times an employee is judged better than the
other determines his rank . comparison is
made on the basis of overall performance
 • This method is
suitable for big
Advantages organizations.
• Individual traits
are evaluated.

• The understanding of
this method is difficult
Disadvantages one.
• Itinvolves
considerable time.
 FORCED DISTRIBUTION
METHOD
A method which forces the rater to distribute
the ratings of the overall performance of an
employee is known as forced distribution
method.
Group wise rating is done under this method.
This method is suitable to large organizations,
but the individual traits could not be appraised
under this method.
Example: a group of workers doing the same
job would fall into the same group as superior, at
and above average, below average and poor.
 GRADING

Certain categories of abilities or

performance of employees are defined well
in advance to fall in certain grades under
this method. Such grades are very good,
good, average, poor and very poor. Here
the individual traits and characteristics are
identified.
 CHECKLIST
The appraisal of the ability of an employee
through getting answers for a number of
questions is called the method of check list.
These questions are related to the behavior of an
employee.A checklist is a list of statements that
describe the characteristics and performance of
employees on the job. The rater checks to
indicate if the behavior of an employee is positive
or negative in each statement
 Is the employee satisfied with the
job? Yes/ No
 Does he finish the job
accurately? Yes/ No
 Does he respect the
superiors? Yes/ No
 Is he ready to accept
responsibilities? Yes/ No
 Does he obey the
orders? Yes/ No
Drawback

It is a time Trained rates are

consuming and required
expensive method The statements may
It is difficulty to be interpretted
assemble, analyze and differently by different
weigh several raters
statements that properly
describe job related
behavior and
performance
FORCED CHOICE METHOD
A series of groups of statements are
prepared positively or negatively under
this method, both these statements describe
the characteristics of an employee, but the
rater is forced to tick any one of the
statements either out of positive statements
or out of negative statements.
 CRITICAL INCIDENT METHOD
The performance appraisal of an employee is
done on the basis of the incidents occurred
really to the concerned employee. Some of
the events or incidents are given below:
Refused to co-operate with
other employees.
Unwilling to attend further training.
Got angry over work or with subordinates.
Suggested a change in the method
of production.
Suggested a procedure to improve
the quality of goods.
Critical incidents cont

In this method the supervisors keeps a

written record of critical(either good or
bad) events and how different employees
behaved during such events.
Eg of critical incident method

s.No Workers reaction Score

1 2 3 4 5

1 Informed the supervisor ~

immediately

2 Became anxious of loss of ~

output

3 Tried to repair the machine

4 Complained of poor
maintenance

5 Was happy to get forced rest

Drawback

it is very time consuming The supervisor may

and cum-bersome for the commit errors in recording
superior to maintain a behaviors of different
written record for each employees during a short
employee during every duration event
major event. The employees are likely
Subjective judgment of to become concerned with
supervisor is involved in what the supervisor records
deciding rather than with daily job
routine
 GRAPHIC RATING SCALE METHOD


It is also known as linear rating scale. In this
method, the printed appraisal form is used to
appraise each employee.

The form lists traits (such as quality and
reliability) and a range of job performance
characteristics (from unsatisfactory to
outstanding) for each trait.

The rating is done on the basis of points on
the continuum. The common practice is to
follow five points scale.
 FIELD REVIEW METHOD

An employee’s performance is appraised
through an interview between the rater and the
immediate superior or superior of a concerned
employee.

The rater asks the superiors questions about
the performance of an employee; the personnel
department prepares a detail report on the basis
of this collected information.

A copy of this report is placed in the
personnel file of the concerned employee after
getting approval from the superior.
 ESSAY EVALUATION

With easy evaluation technique the

manager
nurse is required to describethe
employee’s performance over the
evaluation period
entire by writing a narrative
detailing the strength and weaknesses of
the appraise.
Drawback

It involves bias as evaluation is not based

on specific performance dimensions related
to the job.
There is no common criterion for
appraisal
The quality of appraisal depends on the
writing ability of the evaluator rather than
on employees performance
 PEER REVIEW
The employee selects peers to conduct
the evaluation. Usually two to four
peers are identified through a pre
determined process.
The employee submits self evaluation
port folio. The port folio might
describe how he or she met objectives
and/or pre-determined standards during
the past evaluation cycle. Supporting
materials are included.
The peer evaluates the employee. This
may be done individually or in a group.
Manager and employee meet to discuss the
evaluation.
 APPRAISAL
INTERVIEW
Once the manager completes an accurate
evaluation of performance, he/she should
arrange an appraisal interview. The appraisal
interview is the first step in employee
development.
They provide feedback to an employee
which enables him to improve his
performance in future.
Appraisal interview is designed to achieve the
following objects
to let employee know where does he stand
to help the employee do a better job by clarifying what is
expected of him
to provide an opportunity to the employee to common upon his
appraisal
to strengthen superior subordinates working relationship and
exchange valuable information for career planning
Types of appraisal interview

Tell and sell interview

Tell and listen interview

Problem solving
interview
 Key behaviors for an appraisal
interview
 Put the employee at ease
 Clearly state the purpose of the
appraisal interview
 Go through the ratings one by one with
the employee.
 Draw out the employee reactions to the ratings.
 Decide on specific ways in which performance
areas can be strengthened.
 Set a follow up date.
 Express confidence in the employee.
 FUTURE ORIENTED METHODS

Management Assessment Psychological

centers Appraisals
by Objectives

360-Degree Human resource

Feedback accounting method
 MBO
It means management by objectives and the
performance is rated against the achievement
of objectives stated by the management.
MBO process goes as under.
 Establish goals and desired outcomes for
each subordinate
 Setting performance standards
 Comparison of actual goals with goals
attained by the employee
 Establish new goals and new strategies for
goals not achieved in previous year.
The concept of MBO was developed by
Peter Drucker in 1954.

It is also known as work planning and review or

goal setting approach to appraisal def: it is a
comprehensive managerial system that
integrates many key managerial activities in a
systematic manner , consciously directed
towards the effective and efficient achievement
of organizational; objectives
Features of MBO

objectives setting and performance review made

by the concerned mangers
objectives are established all levels of
organization
it is directed towards the effective and efficient
accomplishment of organizational objectives
it is provides aguidelines for appropriate system
and procedures
its provide aperiodic reviews of performance
COMPONETS OF MBO

ANNUAL
PERFORMAN
CE APPRISAL

CONDUCTIV SETTING
E PERIODIC OBJECTIVE
REVIEWS S

DEVELOP A
ACTION
PLAN
Advantages
It is more useful for managerial positions.
Disadvantages
Not applicable to all jobs, allocation of merit
pay may result in setting short-term goals
rather than important and long-term goals etc.
DIFFICULTIES IN MBO

lack of training
lack of follow-up
rigidity
limited application
costly process
lack of motivation
less flexibility
 360-DEGREE FEEDBACK
 It is a technique which is systematic collection of performance data
on an individual group, derived from a number of stakeholders like
immediate supervisors, team members, customers, peers and self.
 This technique is highly useful in terms of broader
perspective,
greater self-development and multi-source feedback is useful.
 360-degree appraisals are useful to measure inter-personal skills,
customer satisfaction and team building skills.
 PSYCHOLOGICAL APPRAISALS

These appraisals are more directed to

assess employee’s potential for future
performance rather than the past one. It is
done in the form of in-depth interviews,
psychological tests, and discussion with
supervisors and review of
evaluations. Itother
is more focused
employees emotional,
on intellectual,
motivational and and other
personal characteristics affecting his
performance.
 ASSESSMENT
CENTERS
An assessment centre typically involves the
use of methods like social/informal events,
tests and exercises, assignments being given
to a group of employees to assess their
competencies to take higher responsibilities in
the future.
The trained evaluators observe and evaluate
employees as they perform the assigned jobs
and are evaluated on job related
characteristics.
 HUMAN RESOURCE ACCOUNTING
METHOD
 Human resources are valuable assets for every
organization. Human resource accounting method tries
to find the relative worth of these assets in the terms of
money.
 In this method the Performance appraisal of the
employees is judged in terms of cost and contribution of
the employees.
 The cost of employees include all the expenses incurred
on them like their compensation, recruitment and
selection costs, induction and training costs etc whereas
their contribution includes the total value added (in
monetary terms).
 The difference between the cost and the contribution
will be the performance of the employees.
COMPONENTS TO BE EVALUATED

 Use of nursing process

 Professionalism
 Maintaining safety
 Continuing education
 Initiative character
 Managing interpersonal
relationships
 Technical ability
 Organizing ability
 Flexibility
 Communication skills
PERFORMANCE APPRAISAL-
PROCESS
 Establishing Performance Standards
 Communicating the standards
 Measuring the actual Performance
 Comparing the with the Desired
Actual Performance
 Discussing Results
 Decision Making
LIMITATIONS OF PERFORMANCE APPRAISAL

 The performance appraisal methods are unreliable.

 If an employee is well known to an employer,
the performance appraisal may not be correct.
 The inability of supervision to appraise an employee
does not bring out the accurate performance appraisal.
 Some qualities of an employee can not be
easily appraised through any performance appraisal
method.
 A supervisor may appraise an employee to be good to
avoid incurring his displeasure.
 Uniform standards are not followed by
the supervisors in the performance appraisal.
 The principal obstacles to effective performance appraisal are:

Lack of support from top management.

Resistance on the part of evaluators
because:
 Performance appraisal demands too much of supervisors efforts in terms
of time, paperwork, and periodic observation of subordinates
performance.
 Supervisors are reluctant to play god by judging others.
 Supervisors do not fully understand the purpose and procedures
of performance appraisal.
 Supervisors lack skills in appraisal techniques.
 Performance appraisal is not perceived as being productive.
 Evaluation biases and rating errors, which result in unreliable and invalid
ratings.
 Lack of clear, objective standards of performance.
 Failure to communicate purposes and results of performance appraisal
to
employees.
 Lack of a suitable appraisal tool.
 Failure to police the appraisal procedure effectively.
POTENTIAL APPRAISAL
PROBLEMS
Leniency Recency
error error

Horn
Halo error
Effect
Ambiguous

evaluation
ERROR IN RATING

STEREO
SPILL OVER
EFFECTS
CONT PROBLEMS OF PERFORMANCE
APPRAISAL
LACK OF KNOWLEDGE

INCOMPETENCE

NEGATIVE APPROACH

LACK OF RELIABILITY

LACK OF KNOWLEDGE
ESSENTAIAL OF AN EFFECTIVE
PERFORMANCE APPRAISAL
MUTUAL TRUST

CLEAR OBJECTIVES

STANDARDISATION

TRAINING

JOB RELATEDNESS
CONT

DOCUMENTAION

FEEDBACK AND PARTICIPATION

INDIVIDUAL DIFFERENCES

POST APPRAISAL INTERVIEW

REVIEW AND APPEAL