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Performance Appraisal. PERFORMANCE APPRAISAL is a systematic and objective way of evaluating both work related behaviour and potential of employees.

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Presentation on theme: "Performance Appraisal. PERFORMANCE APPRAISAL is a systematic and objective way of evaluating both work related behaviour and potential of employees."— Presentation transcript:

1 Performance Appraisal

2 PERFORMANCE APPRAISAL is a systematic and objective way of evaluating both work related behaviour and potential of employees.

3  It is not a past oriented activity. The intention is not to put poor performers in a spot. Instead, it shows employees where things have gone wrong, how to set things in order and deliver superior performance using their potential fully  The focus of appraisals is on employee growth and development. It forces managers to be coaches rather than judges.

4 Objectives The performance appraisal process serves several important purposes  Compensation decisions  Promotion decisions  Training and development programmes  Feedback to the employee  Personal growth and development

5 What is to be appraised? The content to be appraised is determined on the basis of job analysis. Usually it comprises of:  Behaviours, including observable physical actions, movements  Objectives which measure job related results  Traits which are measured in terms of personal characteristics

6 When to appraise?  Conducted informally  Carried out systematically at regular intervals, sticking to a definite plan  Supervisors  Peers  Subordinates  Users of services  consultants  Self appraisal Who will appraise?

7 The Performance Appraisal Process  Establish performance standards. Good performance goals should speak about  What is the task to be accomplished?  What will it look like when it is accomplished?  When must it be completed?  What are the cost considerations?  What are the likely payoffs to the employee?

8  Communicate the standards The Appraiser should prepare job descriptions clearly  Help the appraisee set own goals and targets  Analyse results objectively  Offer coaching and guidance The Appraisee should be clear about what he is doing and why he is doing

9  Measure actual performance  Compare actual performance with standards and discuss the appraisal Not an easy job Emotional factors to be taken into account Affects the self esteem of the appraisee Criteria likely to be questioned, if the appraisal turns out to be negative  Take corrective action, if necessary

10 Performance Appraisal Programs Performance Appraisal  A process, typically performed annually by a supervisor for a subordinate, designed to help employees understand their roles, objectives, expectations, and performance success. Performance management  The process of creating a work environment in which people can perform to the best of their abilities.

11 Training Performance Appraisers Recency errors Leniency or strictness errors Common rater-related errors Error of central tendency Similar-to-me errors Contrast and halo errors

12 Rater Errors Error of Central Tendency  A rating error in which all employees are rated about average. Leniency or Strictness Error  A rating error in which the appraiser tends to give all employees either unusually high or unusually low ratings. Recency Error  A rating error in which appraisal is based largely on an employee’s most recent behavior rather than on behavior throughout the appraisal period.

13 Rater Errors Contrast Error  A rating error in which an employee’s evaluation is biased either upward or downward because of comparison with another employee just previously evaluated. Similar-to-Me Error  An error in which an appraiser inflates the evaluation of an employee because of a mutual personal connection.

14 Trait Methods Graphic Rating-Scale Method  A trait approach to performance appraisal whereby each employee is rated according to a scale of individual characteristics.

15 Trait Methods Forced-Choice Method  Requires the rater to choose from statements designed to distinguish between successful and unsuccessful performance.  1. ______ a) Works hard _____ b) Works quickly  2. ______ a) Shows initiative_____ b) Is responsive to customers  3. ______ a) Produces poor quality_____ b) Lacks good work habits Essay Method  Requires the rater to compose a statement describing employee behavior.

16 Behavioral Methods Critical Incident Method  Critical incident An unusual event that denotes superior or inferior employee performance in some part of the job

17 Behavioral Methods Behaviorally Anchored Rating Scale (BARS)  Consists of a series of vertical scales, one for each dimension of job performance; typically developed by a committee that includes both subordinates and managers.

18 Example of a BARS for Municipal Fire Companies FIREFIGHTING STRATEGY: Knowledge of Fire Characteristics. Source: Adapted from Landy, Jacobs, and Associates. Reprinted with permission.

19 Results Methods Management by Objectives (MBO)  A philosophy of management that rates performance on the basis of employee achievement of goals set by mutual agreement of employee and manager.

20 Performance Appraisal under an MBO Program MANAGEMENT BY OBJECTIVES

21 The Balanced Scorecard Source: Robert Kaplan and David Norton, “Strategic Learning and the Balanced Scorecard,” Strategy & Leadership 24, no. 5 (September/October 1996): 18–24.

22 The Balanced Scorecard The appraisal focuses on four related categories  Financial, customer, processes, and learning Ensuring the method’s success Translate strategy into a scorecard of clear objectives. Attach measures to each objective.

23 Cascade scorecards to the front line. Provide performance feedback based on measures. Empower employees to make performance improvements. Reassess strategy.

24 Alternative Sources of Appraisal Source: From The Wall Street Journal—permission, Cartoon Features Syndicate.

25 90 degree = one person review (self or another, the boss) 180 degree = two person review (self and boss/manager) 270 degree = three person review (self, boss, and peers or direct reports) 360 degree = four person review (self, boss, peers, and direct reporters)

26 Then, 540 degree appraisal add more external customers and suppliers

27 We have 360 feedback/appraisal and it is1st feedback=360, then 2nd feedback=720, 3rd feedback=1080 and so on.

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