BANGLADESH INSTITUTE OF MANAGEMNT

HRM for EXECUTIVES

Performance
Appraisal
Performance Management vs. Performance Appraisal
HRM for EXECUTIVES
HRM for EXECUTIVES
Performance Appraisal
HRM for EXECUTIVES
Performance Appraisal
HRM for EXECUTIVES
Steps in Appraising Performance
HRM for EXECUTIVES
 Why Appraise Performance?
HRM for EXECUTIVES

• Appraisals play an integral role in the employer’s

performance management process.
• Appraisals help in planning for correcting
deficiencies and reinforce things done correctly.
• Appraisals, in identifying employee strengths and
weaknesses, are useful.
• Appraisals affect the employer’s salary raise
decisions.
 The Supervisor’s Role in Appraisal
HRM for EXECUTIVES

The supervisor usually does the actual appraising.

Therefore, he or she:

•Must be familiar with basic appraisal techniques,

•Must understand and avoid problems that can cripple an

appraisal, and

•Must know how to conduct the appraisal fairly.

 HR Department’s Role in Appraisal
HRM for EXECUTIVES

– 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 laws and are
up to date.
 Aspects of Value
(What should be measured)
HRM for EXECUTIVES
The six primary criteria on which the value of performance may be assessed:
•Quality: The degree to which the process or result of carrying out an activity
approaches perfection, in terms of either conforming to some ideal way of
performing the activity or fulfilling the activity’s intended purpose.
•Quantity: The amount produced, expressed in such terms as monetary value,
number of units, or number of completed activity cycles.
•Timeliness: The degree to which an activity is completed, or result produced,
at the earliest time desirable from the standpoints of both coordinating with the
outputs of others and maximizing the time available for other activities.
•Cost-effectiveness: The degree to which the use of the organization’s
resources (e.g., human, monetary, technological, material) is maximized in the
sense of getting the highest gain or reduction in loss from each unit.
•Need for supervision: The degree to which a performer can carry out a job
function without either having to request supervisory assistance or requiring
supervisory intervention to prevent an adverse outcomes.
•Interpersonal impact: The degree to which a performer promotes feelings of
self-esteem, goodwill, and cooperativeness among coworkers and subordinates.
 THE PROCESS OF PERFORMANCE APPRAISAL
HRM for EXECUTIVES

Setting
performance
Taking corrective standards Communicating
standards
standards

Discussing Measuring
results standards

Comparing
standards
Methods of Performance Appraisal
 Graphic Rating Scale
Trait Excellent Good Average Fair Poor
(5) (4) (3) (2) (1)
 A scale that
lists a number
Attitude
of traits (such
as quality and Knowledge of
Work
reliability) and
a range of Managerial
Skills
performance
values (from Team Work
unsatisfactory Honesty
to outstanding) Regularity
for each trait.
Accountability
 The employee
is then rated by Interpersonal
identifying the Relationships
score that best
describes his or
her level of Creativity
performance Discipline
for each trait.
  Essay Method
HRM for EXECUTIVES

• The essay method is a fairly straightforward approach in which

the manager or evaluator writes a descriptive essay about
each employee.
• The essay would cover the employees' achievements
throughout the evaluation period as well as their strengths and
weaknesses.
• The essay format gives the evaluators the flexibility to focus
on whatever they personally find important about the
individual’s performance.
• However, the essay method can be time consuming for the
manager, and it requires a certain level of writing skill for the
evaluation to be meaningful.
• It also is unlikely to be systematic, which can make it difficult
to compare evaluations from person to person.
  Critical Incident Method
HRM for EXECUTIVES
• Manager keeps a
written record of
highly favorable
and unfavorable
employee actions.
• Record of incidents
of each
subordinate’s
behavior that led
to unusual success
or failure on some
aspect of the job.
• Excellent for
development and
feedback due to
qualitative
emphasis.
• Difficult to use for
evaluation due to
lack of quantitative
emphasis.
  Forced Distribution Method
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• Uses a small number of performance categories, and rater assigns a
specific proportion of employees to each category.
• Similar to grading on a curve; predetermined percentages of ratees
are placed in various performance categories.
• Can be problematic if most of the employees perform similarly.

Example:
•10% excellent
performers
•20% good performers
•40% average
performers
•20% below-average
performers
•10% poor performers
 Paired Comparison Method
HRM for EXECUTIVES

Ranking
employees
by making
a chart of
all possible
pairs of
the
employees
for each
trait and
indicating
which is
the better Note: + means “better than” and – means :worse
employee than”. For each chart, add up the number of +’s in
of the pair. each column to get the highest ranked employees.
 •Management By Objectives (MBO)
HRM for EXECUTIVES
MBO consists of six main steps:
[Link] the organization’s goals. Establish an
organization wide plan for next year and set goals.
[Link] departmental goals. Here department heads and
their superiors jointly set goals for their departments.
[Link] departmental goals. Department heads
discuss the department’s goals with all subordinates in the
department (often at a department wide meeting) and ask
MBO involves them to develop their own individual goals; in other words,
setting how can each employee contribute to the department’s
specific attaining its goals?
measurable [Link] expected results. (set individual goals). Here
goals with department heads and their subordinates set short-term
each performance targets.
employee [Link] reviews: Measure the results.
Department heads compare the actual performance of
and then
each employee with expected results.
periodically
[Link] feedback. Department heads hold periodic
reviewing the
performance review meetings with subordinates to discuss
progress and evaluate the latters’ progress in achieving expected
made. results.
 •BEHAVIORALLY ANCHORED RATING SCALE (BARS)
Developing a BARS typically requires five steps: HRM for EXECUTIVES
[Link] critical incidents. Persons who know the job being
appraised (jobholders and/or supervisors) are asked to describe
specific illustrations (critical incidents) of effective and ineffective
An Appraisal performance.
method that
[Link] performance dimensions. These people then cluster
aims at
the incidents into a smaller set of performance dimensions (say,
combining
five or ten). Each cluster (dimension) is then defined.
the benefits
of narrative [Link] incidents. Another group of people who also know
critical the job then reallocate the original critical incidents. They are given
incidents and the clusters’ definitions and the critical incidents and are asked to
quantified reassign each incident to the cluster they think it best. Typically, a
ratings by critical incident is retained if some percentage (usually 50% to
anchoring a 80%) of this second group assigns it to the same cluster as did the
quantified group in step 2.
scale with [Link] the incidents. This second group is generally asked to
specific rate the behavior described in the incident as to how effectively
behavioral and ineffectively it represents performance on the appropriate
examples of dimension (seven-or-nine-point scales are typical).
good and [Link] final instrument. A subset of the incidents (usually six
poor or seven per cluster) is used as behavioral anchors for each
performance. dimension.
 •“BARS” PERFORMANCE APPRAISAL FORMAT
•Job Dimension: Program Promotion and Public Relations Behaviors
•This agent can be expected to:
HRM for EXECUTIVES
 Conduct one of the best public information programs in the state.
7
 Always get extensive media coverage for his/her programs.
 Constantly develop good public relations and not just at budget time.
 Be willing to work with all groups and organizations for promotion of Extension regardless
of personal feelings.
6  Communicate effectively with publicity media.
 Have developed a countywide mailing list of interested individuals.
 Make some original use of mass media.
5  Localize some of the promotional material supplied by the Extension office.
 Make reports to advisory groups and public officials on request or as opportunities arise.
4  Maintain communication with some local leaders, organizations, and groups.
 Assist with planning and implementing public relations programs even though efforts may
3 lack consistency.
 Insufficiently use one or more of the mass media.
 Make no effort to speak to community clubs or organizations.
 Continually mention mass media that should be contacted to increase potential
2 audiences, but do nothing about it.
 See some parts of the program as being unimportant and thus not be concerned with
them.
 Show disrespect for local values and customs.
1
 Fail to communicate events and activities to those interested.
 Behavioral Anchored Rating Scales
HRM for EXECUTIVES
Performance Points Behavior
Extremely 7 Can expect trainee to make valuable suggestions
good for increased sales and to have positive
relationships with customers all over the
country.
Good 6 Can expect to initiate creative ideas for improved
sales.
Above average 5 Can expect to keep in touch with the customers
throughout the year.
Average 4 Can manage, with difficulty, to deliver the goods
in time.
Below average 3 Can expect to unload the trucks when asked by
the supervisor.
Poor 2 Can expect to inform only a part of the
customers.
Extremely poor 1 Can expect to take extended coffee breaks &
roam around purposelessly.
 •360° Appraisal
HRM for EXECUTIVES

• 360° appraisal is a process

where individuals in an
organisation receive anonymous
feedback from the people they
interact with at work.
• A 360 degree appraisal system
allows managers, peers, and
direct reports to give feedback
on the performance and
behaviour of an individual.
• This type of appraisal may also
take insights from clients,
vendors, or consultants –
providing they work regularly
with the employee being
reviewed.
Measurement Errors in Performance Appraisal
HRM for EXECUTIVES

• Halo errors: The rater evaluates the ratee on several

different dimensions and gives a similar rating for each
dimension.
• Leniency errors: Raters tend to give everyone relatively
high ratings.
• Strictness errors: Raters tend to give everyone relatively
low ratings.
• Central tendency errors: Raters lump everyone together
around the average or middle.
• Low differentiation errors: Raters restrict themselves to a
small part of the rating scale. Examples include leniency,
strictness, and central tendency errors.
• Recency errors: Raters allow recent events to exercise
undue influence on ratings.
• Personal bias errors: Raters let personal biases, such as
stereotypes, unduly influence the ratings.
 Types of Appraisal Interview
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1. Satisfactory-Promotable: The employee’s performance

is satisfactory and there is a promotion ahead. This
interview’s objective is to discuss the employee’s career
plans and to develop a specific action plan for the
professional development.
2. Satisfactory-Not promotable: The employee’s
performance is satisfactory but there is no possibility for
promotion. This interview’s objective is to motivate the
employee enough so that the employee maintains the
satisfactory performance.
3. Unsatisfactory-Correctable: The interview’s objective is to
find a way to lay out an action plan to correct the
unsatisfactory performance.
4. Unsatisfactory-Uncorrectable: This interview is usually to
warn the employee about his/her performance. The worst
case would be that the employee is fired.
Planning and Conducting the Appraisal Interview
HRM for EXECUTIVES

Before the interview:

•Make sure the employee knows the standard or a copy
of appraisal form.
•Select an appropriate time: e.g. not during experience
of a traumatic event.
•Give two to three day advance notice
•Be personally prepared mentally and emotionally.
•Hold the interview in a private, quiet and comfortable
place – uninterrupted
•Plan a seating arrangement that reflects collegiality
rather than power.
Planning and Conducting the Appraisal Interview
HRM for EXECUTIVES

During the interview:

•Greet the employee warmly, showing sincere
interest.
•Begin with a pleasant informal note.
•Ask the client to comment on his/her progress
since last appraisal
•Avoid surprises – coach and communicate
informally on continual basis.
•Use coaching techniques throughout
•When dealing with an employee who has several
problems- don’t overwhelm, select major ones.
Planning and Conducting the Appraisal Interview
HRM for EXECUTIVES

After the interview:

•Both manager and employee need to sign the
form.
•End with a pleasant note.
•Document goals for further development with
target dates for accomplishment, review and
support needed.
•If the interview reveals specific long term
coaching needs, develop a method of follow up to
ensure such coaching takes place.
Check List During the Appraisal Interview
HRM for EXECUTIVES
HRM for EXECUTIVES