2. Performance Appraisal (PA) refers to all those
procedures that are used to evaluate the
personality performance, potential of its
group members
2
3. Performance appraisal is a method of evaluating
the behaviour of employees in the workspot,
normally including both the quantitative &
qualitative aspects of job performance.
PA is the systematic evaluation of the individual
with respect to his/her performance on the job &
his/her potential for development.
3
4. It Provide a basis for promotion/ transfer/
termination: Identify those employees who
deserve promotion Or those who Enhance
employees’ effectiveness require lateral shift
(transfer) or termination, PA is used for career
planning .
by helping to identify their strengths and
weaknesses and Inform them about expected
levels of performance If employees
understand their roles well, they are likely to
be more effective on the job .
4
5. Identifying training and development needs
of employees is necessary to prepare them
for meeting challenges in their current and
future employment.
Aid in designing training and development
programs: Identifying skills required to be
developed would help in tailor- making
training and development programs.
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6. Remove work alienation: Counseling Employees
to correct misconceptions which might result in
work alienation.
Remove discontent: Identifying and removing
factors responsible for workers’ discontent would
motivate them for better work performance.
Develop inter-personal relationships: Relations
between superior - subordinate can be improved
through realization that each is dependent on the
other for better performance and success
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7. Aid wage administration: Performance
appraisal can help in development of
scientific basis for reward allocation, wage
fixation, incentives.
Improve communication:Performance
appraisal serves as a mechanism for
communication between superiors and
subordinates
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8. Provide information about the performance ranks basing
on which decision regarding salary fixation, confirmation,
transfer , promotion & demotion are taken.
Provide information to diagnose deficiency in employee
regarding skill, knowledge, determine training &
development needs & to set new standards of work, if
necessary.
Provide information for correcting placement.
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9. Provide feedback information about the level
of achievement & behaviour of subordinate.
Provide information which helps to counsel
the subordinate.
To prevent grievances & indisciplinary
activities.
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10. 1. Validity
2. Reliability
3. Freedom from bias
a. Legal issues of fairness
b. Freedom from rating errors
4. Practicality
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11. Establish Performance Standards:
Performance standards serve as benchmarks
against which performance is measured
Standards should relate to the desired results
of each job.
Communicate the Standards : Performance
appraisal involves at least two parties, the
appraiser who does the appraisal and the
appraisee whose performance is being
evaluated.
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12. The appraiser should prepare job
descriptions clearly; help appraisee set his
goals and targets; analyse results objectively;
offer coaching and guidance to appraisee
whenever required and reward good results.
The appraisee should be very clear about
what he is doing and why.
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13. Performance measures may be objective or
subjective .
Objective performance measures are
indications of job performance that can be
verified by others and are usually
quantitative.
Subjective performance measures are ratings
that are based on the personal standards or
opinions of those doing the evaluation and
are not verifiable by others.
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14. Compare Actual performance with Standards
and Discuss the Appraisal,Actual performance
may be better than expected and sometimes
it may go off the track Whatever be the
consequences, there is a way to communicate
and discuss the final outcome
14
15. Corrective action is of two types One puts
out the fires immediately, Other strikes at the
root of the problem permanently
15
16. In order to be effective, the criteria for
performance appraisal should be genuinely
related to success / failure in the job and should
be amenable to objective judgement MBO is an
example of performance-based appraisal
approach that involves setting objectives and
comparing performance against those objectives.
Performance Criteria Objectives give greater
freedom to both management and the employees
in deciding how performance is to be measured.
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17. Benefits of Performance Appraisal For the
appraisee Better understanding of his role in
the organization—what is expected and what
needs to be done to meet those expectations
Clear understanding of his strengths and
weaknesses to develop himself into a better
performer in future.
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18. Increased motivation, job satisfaction, and
self-esteem Opportunity to discuss work
problems and how they can be overcome
Opportunity to discuss aspirations and any
guidance, support or training needed to fulfil
those aspirations Improved working
relationships with supervisors .
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19. Identification of performers and non-
performers and their development towards
better performance Opportunity to prepare
employees for assuming higher
responsibilities.
Opportunity to improve communication
between the employees and management
Identification of training and development
needs Generation of ideas for improvements
Better identification of potential and
formulation of career plans
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20. Improved performance through out the
organization Creation of a culture of
continuous improvement and success
Conveying the message that people are
valued.
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21. TRADITIONAL MODERN
Graphic rating scale
Behaviorally anchored
Ranking method
rating scales
Paired comparison method
Forced distribution method Assessment center
Checklist method Human resource accounting
Essay or free form appraisal
Management by objectives
Group appraisal
Psychological appraisals
Confidential reports
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23. Ranking ,
Paired comparison,
Forced distribution,
Other methods,
Performance tests,
Field review technique.
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24. Confidential Report Descriptive report
Prepared at the end of the year Prepared by
the employee’s immediate supervisor, The
report highlights the strengths and
weaknesses of employees .
Prepared in Government organizations Does
not offer any feedback to the employee.
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25. Essay Evaluation The rater is asked to express
the strong as well as weak points of
employee’s behavior The rater considers the
employee’s : Job knowledge and potential
Understanding of company’s programs,
policies, objectives etc Relation with co-
workers and supervisors Planning, organizing
and controlling ability Attitude and
perception
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26. This method has the following limitations:
Highly subjective.
Supervisor may write biased essay.
Difficult to find effective writers.
A busy appraiser may write the essay hurriedly
without assessing properly the actual performance of
the worker.
If the appraiser takes a long time it becomes
uneconomical from the view point of the firm
Used in the companies like BPL, Bata, Wheels India, Birla &
others.
.
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27. Manager prepares lists of statements of very
effective and ineffective behavior of an
employee.
These critical incidents represent the
outstanding or poor behavior of the
employees.
The manager periodically records critical
incidents of employee’s behavior .
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28. Critical Incident Technique Example: July 20 -
Sales clerk patiently attended to the
customers complaint. He is polite, prompt,
enthusiastic in solving the customers’
problem July 20 - The sales assistant stayed
45 minutes beyond his break during the
busiest part of the day. He failed to answer
store manager’s call thrice. He is lazy,
negligent, stubborn and uninterested in work.
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29. Negative incidents may be more noticeable
than positive incidents.
Supervisors have a tendency to unload a
series of complaints about incidents.
Results in very close supervision which may
not be liked by the employee.
The recording of incidents may be a chore for
the manager concerned who may be too busy
or forget to do it
29
30. A checklist is a set of objectives or
descriptive statements about the employee
and his behavior.
If the rater believes that the employee
possesses a listed trait, the item is
checked
A rating score equals the number of
checks
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31. Simple checklist method
Weighted checklist method
Forced choice method
Simple checklist method:
Is employee regular Y/N
Is employee respected by subordinate Y/N
Is employee helpful Y/N
Does he follow instruction Y/N
Does he keep the equipment in order Y/N
31
32. weights performance rating
(scale 1 to 5 )
Regularity 0.5
Loyalty 1.5
Willing to help 1.5
Quality of work 1.5
Relationship 2.0
32
33. Was developed because graphic rating scales allowed
supervisors to rate everyone high
The rater must choose from a set of descriptive
statements about employee
Supervisors check the statements that describe the
employee, or they rank the statements from most to
least descriptive
Forced choice can be used by superiors, peers,
subordinates, or a combination of these
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34. Criteria Rating
Regularity on the job Most Least
• Always regular
• Inform in advance for delay
• Never regular
• Remain absent
• Neither regular nor irregular
Used in the companies like WIDIA, CEAT, Modern
threads & others.
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35. The rater may rate his employees at the
higher or lower end of the scale earlier.
The normal distribution curve is used.
Used in the companies like Usha, SPL, JCT &
others.
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36. This is the simplest and most popular technique for appraising employee
performance .
The typical rating scale system consist of several numerical scales, each
representing a job related performance criterion such as dependability,
Initiative, out put attendance , attitude, co-operation, and the like. Each
scale ranges from excellent to poor. The rater checks the appropriate
performance level on each criterion, then computes the employees total
numerical score.
Graphic Rating Scale form is used to evaluate the performance of
the employees A variety of traits may be used in this device, the
most common being quality and quantity of work.
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38. Behaviorally Anchored Rating Scale
Combination of rating scale and critical
incidence Steps
Collect critical incidents Identify performance
dimensions.
Reclassification of incidents.
Assigning scale values to incidents Producing
the final instrument
39. MBO emphasizes collectively set goals that
are tangible, verifiable, and measurable
Focuses attention on goals rather than on
methods Concentrates on Key Result Areas
(KRA) Systematic and rational technique that
allows management to attain maximum
results from available resources by focusing
on achievable goals
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40. Arranging organizational goals in a means-
ends chain Engaging in joint goal setting This
process has the following steps:
Identify KRAs
Define expected results
Assign specific responsibilities to employees.
Define authority and responsibility
relationship
Conducting periodic progress review
Conducting annual performance review
41. Ranking method: The evaluator rates the employee from
highest to lowest on some overall criteria.
Ex :if there are 30 workers in a work group the most efficient employee
may be ranked as number one and the least efficient employee as
number thirty.
Advantages:
Easy and inexpensive
Disadvantages:
Not well defined
Raters bias
41
42. Employee Rank
A 2
B 1
C 3
D 5
E 4
42
43. Paired comparison method : Each worker is
compared with all other employees in a group
For several traits paired comparisons are
made, tabulated and then rank is assigned to
each worker This method is not applicable
when the group is large.
This method results in each employee being given a
positive comparison total and a certain percentage of
the total positive evaluation.
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44. A B C D E Final Rank
A - - - + + 3
B + - - + + 2
C + + - + + 1
D - - - - + 4
E - - - - - 5
No of Positive evaluation
Total no. of evaluation * 100 =
employee superior evaluation
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45. The rater is asked to appraise the employee
according to predetermined distribution
scale. Two criteria used for rating are:
job performance and promotability. A five
point performance scale is also used without
mentioning any descriptive statements. The
worker is placed between two extremes of
―good‖ and ―bad‖ performance.
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46. Group Appraisal Employee is appraised by a
group of appraisers. The group consists of
Immediate supervisor of the employee Other
supervisors who have close contact with the
employee’s work. Manager or head of the
departments. Consultants or Clients.
Used in the companies like Kinetic Honda, Blue
star, Birla VXL & others.
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47. Field Review Technique The appraiser goes
to the field and obtains the information about
work performance of the employee by way of
questioning the said individual, his peer
group, and his superiors
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48. Conducted to assess employees’ potential.
Psychological Appraisals consists of:
◦ In-depth interviews
◦ Psychological tests
◦ Consultations and discussions with the employees
◦ Discussions with superiors, subordinates and peers,
etc.
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49. Evaluation is conducted in the areas of:
◦ Employees intellectual abilities
◦ Emotional stability
◦ Motivational responses
◦ Reasoning and analytical abilities
◦ Interpretation and judgement skills
◦ Sociability
◦ Ability to foresee the future, etc.
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50. Let the Employee Know Where He Stands
To help employees do a better job by
clarifying what is expected of them.
To plan opportunities for development and
growth To strengthen the superior-
subordinate working relationship by
developing mutual agreement of goals.
To provide an opportunity for employees to
express themselves on performance related
issues.
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51. 360 Degree Appraisal
360 degree feedback, also known as 'multi-rater
feedback', is the most comprehensive appraisal
where the feedback about the employees’
performance comes from all the sources that
come in contact with the employee on his job.
Organisations are increasingly using feedback
from various sources such as peer input,
customer feedback, and input from superiors.
Different forms with different formats are being
used to obtain the information regarding the
employee performance.
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52. 360o Appraisal System It is a systematic
collection and feedback of performance data
on an individual or group, derived from a
number of stakeholders Data is gathered and
feed back to the individual participant in a
clear way designed to promote
understanding, acceptance and ultimately
behavior .
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53. According to a wall street journal headline, ―Teams have
become commonplace in U.S. Companies‖.
Most of the performance appraisal techniques are
formulated with individuals in mind i.e. to measure and
rate the performance of the individual employee.
Therefore, with the number of teams increasing in the
organisations, it becomes difficult to measure and
appraise the performance of the team.
The question is how to separate the performance of the
team from the performance of the employees.
A solution to this problem that is being adopted by the
companies is to measure both the individual and the team
performance. Sometimes, team based objectives are also
included in the individual performance plans.
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54. Also known as the ―Up or out policy‖, the rank
and yank strategy refers to the performance
appraisal model in which best-to-worst ranking
methods are used to identify and separate the
poor performers from the good performers.
Then the action plans and the improvement
opportunities of the poor performers are
discussed and they are given to improve their
performance in a given time period, after which
the appropriate HR decisions are taken. Some of
the organisations following this strategy are
Ford, Microsoft and Sun Microsystems.
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55. BPO sector offers handsome initial salary,
good growth and many other benefits to its
employees.
Keeping in relatively a new sector in the
Indian industry, but has established itself
well and is growing at a rapid rate.
mind the attrition rates in the sector, the
performance measurement and appraisal
processes are of extreme importance in
BPO’s. It is often used as one of the tools to
retain the employees.
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56. BPO employees have the advantage of
getting performance based incentives.
In most of the BPO organisations, there are
well designed schemes for awarding the
performance based incentives to the
individuals and/or the teams as a whole.
An incentive on the completion of the
defined targets is a common practice in
BPO’s.
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57. The general parameters for the measurement
of employees’ performance are:
Speed i.e. process performance,
Accuracy and
Productivity of each process,
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58. HRA :
Deals with cost of and contribution of human
resources to the organization.
Positive employee performance:
contribution ↑ cost ↓
Negative employee performance:
contribution ↓ cost ↑
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59. Getting PA from the computers based upon the
data stored in the computer about the
employee.
Assessment Centre:
Individuals from various departments are
brought together to spend 2 or 3 days.
Observers rank the performance of each and
every participant in order of merit.
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60. Since assessment centers are basically meant
for evaluating the potential of candidates to
be considered for promotion.
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61. I. Judgment errors:
1. First impressions(primacy effect)
2. Halo errors
3. Horn effect
(down grades other aspects of employee’s
performance because of a single performance
dimension )
4. Leniency
5. Central tendency
6. Contrast error
(Compare people against one another instead of
against an objective )
7. Recency effect
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62. II. Poor appraisal forms:
1. Vague & unclear rating scale
2. Ignore important aspects of job
performance
3. Additional & irrelevant performance
4. Too long and complex
III. Lack of rater preparedness
IV. Ineffective organizational policies &
practices
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63. Trait based system
Behaviour based system
Result based system
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64. 1.Loyalty to Company– v.low low avg H V.H
2.Communication ability –
3.Co-operativeness --
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65. Greets customer in a pleasant and friendly
manner.
Is unable to explain technical aspects of a
product to a customer.
Getting approval from the supervisor
1=never 4=frequently
2=rarely 5=almost always
3=sometimes
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66. No.of units produced this month ------
No.of units produced that were rejected &
scrapped by quality control--------
No.of units produced that were rejected &
returned for repair --------
No.of days absent in this month without
certified medical cause-------
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67. Frank Henderson is the manager of General Electric’s
Appliance Division. Each April, he must evaluate all his
subordinates to decide who is to receive a merit increase for
the upcoming fiscal year. But each year these employees
complain about how they are evaluated, how merit money is
dispersed and what criteria are used for the evaluations.
67
68. However, during the past two years there has been a
tremendous emphasis on quality of production. A review of
the merit recipients reveals that these people were the ones
who had the best quality records. But many of the employees
felt that quality should not be the determining factor. At an
employee forum, one of the senior members remarked: “How
can Frank now reward quality? What happened to production
numbers?”
68
69. Another employee agreed and stated: “This quality game is okay
for some, but what about overall production? It seems to me
that if I will only be rewarded for quality, then I should
produce a few items but make them perfect.”
After hearing such criticism, Frank was quite upset. He
wasn’t trying to cause chaos in his evaluations, nor was he
attempting to hurt anyone. Unfortunately, what was originally
intended to be an appraisal system had just become a nuisance.
69
70. 1. What is the major problem with Frank’s appraisal
system?
2. Describe a performance appraisal system that you
could recommend to Frank for evaluating a worker
on the production line.
3. If no changes are made in the current system that
Frank is using, what do you expect will occur
regarding future production performance of the
employees?
4. What does this case tell us about the impact of
performance appraisals on employee motivation?
70