1. Performance Appraisal

2. Performance appraisal is the systematic evaluation of the individual with regard to his or her performance on the job and his potential for development
Performance appraisal 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

3. A Systematic evaluation of personnel by supervisors or those who is familiar with the employee’s performance

4. Purpose of performance appraisal
Evaluative
Compensation decisions
Staffing decisions
Evaluate the selection system
Developmental
Performance feedback
Training and developmental needs
Feedback for improvement

5. Approaches to performance appraisal
A casual, unsystematic and often haphazard appraisal
A traditional and highly systematic appraisal
Appraisal through mutual goal setting

6. Traditional methods Ranking method Paired comparison Grading
Forced choice method
Checklist method
Critical incident method
Graphic rating scale
Essay method
Field review method
Confidential report

7. Modern methods MBO Behaviorally anchored rating scale
Assessment centers
360-degree appraisal
Cost accounting method

8. 360 appraisal

9. Advantages Provides a more comprehensive view of employee performance.
 Increases credibility of performance appraisal. 
Feedback from peers enhances employee self-development. 
Increases accountability of employees to their customers. 
The combination of opinions can approximate to an ‘accurate’ view 
Comments expressed by several colleagues tend to carry weight 
Some skills are best judged by peers and staff, not by manager alone
Feedback may be motivating for people who undervalue themselves
The wider involvement help to engender a more honest organizational culture

10. Disadvantages Time consuming and more administratively complex.
Extensive giving and receiving feedback can be intimidating to some employees. 
Requires training and significant change effort to work effectively. 
Results can be difficult to interpret  
Feedback can be damaging unless handled carefully and sensitively 
Can generate an environment of suspicion if not managed openly and honestly

11. Action planning ,Managerial alignment Initial coaching
Organisational goals and Context
Indepth Interview & personal assessment
Narrative report ,one-one feedback

12. Measurement Methods
Traits
Behaviors
Results

13. Trait Methods Forced-choice method
Requires the rater to choose from statements designed to distinguish between successful and unsuccessful performance.
Graphic-rating scale method
A trait approach to performance appraisal whereby each employee is rated according to a scale of individual characteristics.
Mixed-standard scale method
An approach to performance appraisal similar to other scale methods but based on comparison with (better than, equal to, or worse than) a standard.
Essay method
Requires the rater to compose a statement describing employee behavior.

14. Behavioral Methods Behaviorally anchored rating scale (BARS)
A performance appraisal that consists of a series of vertical scales, one for each dimension of job performance.
Behavior observation scale (BOS)
A performance appraisal that measures the frequency of observed behavior.
Critical incident
An unusual event denoting superior or inferior employee performance in some part of the job.

15. Results Methods Productivity Management by objectives (MBO)
How much do you get done?
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.
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.

16. Sample Checklist for Diagnosing the Causes of Performance

17. Graphic Rating Scale

18. Behavior Observation Scale (BOS)

19. Behaviorally Anchored Rating Scale (BARS)
FIREFIGHTING STRATEGY: Knowledge of Fire Characteristics.

20. Common Appraisal Problems
Inadequate preparation on the part of the manager.
Employee is not given clear objectives at the beginning of performance period.
Manager may not be able to observe performance or have all the information.
Inconsistency in ratings among supervisors or other raters.
Performance standards may not be clear.
Rating personality rather than performance.

21. Common Appraisal Problems (Ctd.)
Inappropriate time span (either too short or too long).
Overemphasis on uncharacteristic performance.
Subjective or vague language in written appraisals.
Organizational politics or personal relationships cloud judgments.
No thorough discussion of causes of performance problems.
Manager may not be trained at evaluation or giving feedback.
No follow-up and coaching after the evaluation.

22. Common Rating Errors Halo/horn
Overly focusing on specific performance ratings or stereotyping employee by a single personal characteristic.
Leniency
Rating all employees higher than they should be.
Strictness
Rating all employees lower that they should be.
Central tendency
Rating all employees as average when individual employee performance actually varies.

23. Common Rating Errors (Ctd.)
Primacy
Using initial information that supports the rating decision while ignoring later information that does not.
Recency
Basing the rating decision primarily on the most recent performance information while placing much less emphasis on past performance.
Contrast effects
Comparing one employee to another rather than applying a common standard to all employees.

24. Reward effect
Raters error
Similarity error