Performance Appraisal Determinants and obstacles Definition Importance Uses Process of appraisal Methods Goal setting Sources Errors

Performance Appraisal Definition: It is the process of evaluating individual job performance as a basis for making objective personnel decisions. Objective: To motivate employees to adapt and maintain behavior that leads to expected performance

Performance Appraisal Uses: For performance appraisal and useful for making decision that involves: Compensation The major motivator of performance is financial reward. Linking performance with pay will result to attaining expected output. Placement Performance appraisal is required for decisions concerning promotion, demotion and discharges . Training and development Potential and weakness of an employee are identified in performance appraisal, which is necessary for training and development needs.

Performance Appraisal Formal and Informal: Informal – done whenever the supervisor feels the need of it, assessment is done during conversation of supervisor and employee. Formal - if it uses systematic appraisal system Characterized by: Managers and subordinates share understanding about what has to be accomplished Performance is measured using some techniques. Assessment of employee performance is done on a regular basis semi-annual or annually. During the assessment proceedings, the employee is well aware that his performance is being assessed.

Performance Appraisal Process: Consist of the following: Establishment of performance standards. Organization’s strategic goal basis to determine performance standard. Joint superior-subordinate setting of measurable goals. Measurement of performance What has been achieved must be measured Compare performance with standard Discuss result of appraisal with employee When necessary, corrective action is initiated.

Performance Appraisal METHODS: Work standard approach Critical-incident appraisal Checklist Essay appraisal or free-form appraisal Graphic rating scale Behaviorally anchored rating scale Ranking method Alternation Paired comparison Forced distribution Forced-choice rating Goal-setting or management by objectives.

Performance Appraisal WORK STANDARDS APPROACH - Involves setting a standard level of output and then comparing every employee’s performance with the standard 2. CRITICAL-INCIDENT APPRAISAL It is recorded by an observer, indicating the employee’s reaction towards certain event. 3. CHECKLIST A list of behavioral descriptions is used by the evaluator in the checklist appraisal. Items that describe an employee’s behavior are checked off in the list. The items are presented in questions answerable by either “yes” or “no”

Performance Appraisal 4. GRAPHIC RATING SCALE- It uses a set of identified performance factors. Among the factors assessed are quantity and quality of work, job knowledge, cooperative spirit, loyalty, dependability, attendance, honesty, integrity, attitudes and initiative. 5. BEHAVIORALLY ANCHORED RATING SCALE- - The rating scale consists of scale values, which define specific categories of performance and anchors, which are specific written statements of actual behavior.

Performance Appraisal 6. RANKING METHOD- It is used in comparing the performance of two or more employees. ALTERATION- From the list of employees to be evaluated, the evaluator prepares another list where the individual names are entered and arranged according to their value or importance. PAIRED COMPARISON- Under this method the name of the employee is paired with another and the evaluator determines who is the better employee.

Performance Appraisal 6. RANKING METHOD- It is used in comparing the performance of two or more employees. C. FORCED DISTRIBUTION- the evaluator also compares performance of employees. As he is doing this, however, he has to keep in mind how he will allocate the results to the percentage requirements of the various pre determined levels of performance.

Performance Appraisal 7. FORCED-CHOICE RATING - It is one where the rater must choose between two or more specific statements about an employee’s work behavior.

Performance Appraisal GOAL SETTING or (MBO) Management by Objective Steps: Employee and his superior jointly set goals. Employee tries to meet the goal. Performance is evaluated against the goals. Employee and supervisor jointly set new goals for the next time. Prerequisites: The use of participative style of management. Pinpointing which employee is responsible for which results; and Providing performance feedback to concerned employees.

Performance Appraisal SOURCES OF PERFORMANCE INFORMATION Supervisors Able to make frequent observation from day to day activities of their subordinates. Peers Equal ranks often work together and are provided with the opportunity of observing one another while at work. Subordinates Self There is no better person to observe and employee but himself Customers Provides information of behavior of employee they encounter.

Performance Appraisal ERRORS IN PERFORMANCE EVALUATION Halo error Single criterion Leniency error Central tendency error Recency problem OVERCOMING ERRORS Using multiple criteria Emphasizing behavior rather than traits Documenting performance behavior Using multiple evaluators Evaluating selectively Training evaluators