2. OBJECTIVES OF THE LESSON
At the end of this lesson the student will be able to
Define what performance appraisal(PA) mean.
Describe the objectives of PA.
Appriciate uses of PA.
Evaluate the reasons behind the use of PA.
Explain principles of PA.
Point out the evaluation criterias in PA.
Use performance evaluation methods in ther futer
carieer as human resource manager.
Follow steps in the appraisal programme if they get the
opportunity to appraise employees job.
Design alternative way of PA that can contribute to the
knowledge in the area. 2
3. CONTENTS TO BE COVERED
o Meaning and elements of performance appraisal (PA)
o Objectives of PA
o Uses of PA
o Reasons for PA
o Principles of PA
o Evaluation criteria in PA
o Who should evaluate performance?
o When and how often should appraisal be done?
o Methods of PA
1. traditional performance rating
2. newer rating methods
3. result oriented appraisal (MBO)
o Steps in the appraisal programme
o Errors in PA.
o Making appraisals more effective
o Effective PA
o Criticism and suggesions on PA
4. Brain storming question (2 min)
What do you know about performance
appraisal? Discuss what you know about
it with your partner and come up with
Performance appraisal (PA)
Performance evaluation, merit rating, personnel rating,
employee appraisal, efficiency rating, performance review
Definition of terms(Wayne F. Cascio, Managing Human
o Performance refers to an employee’s accomplishment of
o PA is the systematic description of an employee’s job-relevant
strengths and weakness.
o Appraisal period is the length of time during which an
employee’s job performance is observed in order to make a
formal report of it.
o Performance management is the total process of observing an
employee’s performance in relation to job requirements over a
period of time and then of making an appraisal of it. 5
6. PA is a process of evaluating an employee’s
worth or quality in terms of the job i.e. knowing
how well a member performs assigned
The PA has been defined as any personnel
decision that affects the status of employees
regarding retention, termination, promotion,
demotion, transfer, salary increases or decreases,
or admission into a training program.
PA is determining the work results of an
employee in order to offer justified compensation.
7. Is called a ‘tool of management’, ‘a control
process’, ‘an activity and a critical element in
human resources allocation’.
PA is one of the most valuable instruments in the
manager’s toolbox, as no other management
process has as much influence over individuals’
careers and work lives (Allen, 2003).
8. OPEERATIONAL MODEL OF PERFORMANCE APPRAISAL
9. PERFORMANCE ELEMENTS
Elements are Work assignments, responsibilities,
team, group, or organizational performance.
Three types of elements can be used in PA process:
A critical element : address individual performance
for which the employee individually accountable.
Unacceptable performance on the element can be
determined unaccountable and vice versa.
A non-critical element:
A dimension or aspect of individual, team, or
organizational performance that is used in
assigning a summary levels. Can not be used in
appraisal programs that summarize at two levels
10. An additional performance element:-
Addresses a dimension or aspect of individual, team, or
organizational performance used for various other
purposes such as;-
providing feedback on individual or group performance,
recognizing individual or group achievements.
11. OBJECTIVES OF PERFORMANCE
According to Alewine (1982) the general
objectives of PA are:-
1. To get the employees to see themselves as
they really are.
2. To get the employee to recognize the need to
improve job performance.
3. To involve the employee in developing a plan
for improving job performance and better career
To provide reward or promotions.
To diagnose training and development needs
To evaluate success of training and development
To provide a structure for communications between
employees and management to help clarify
expectations of the employee by management and
To show organizational interest in employee
development, which was cited to help the enterprise
retain ambitious, capable employees instead of
losing the employees to competitors.
13. USES OF PERFORMANCE APPRAISALS
PA HELPS TO:-
Achieve organizational and individual
Know and improve the quality of employees
Formulate programs of promotion and executive
Help employees know their current status and
providing them motivation
Bringing satisfaction to employees and improving
14. To determine appropriate salary increases and
bonuses for workers based on performance
To determine promotions or transfers depending on
the demonstration of employee strengths and
To motivate employees by showing them where
15. Determining training needs and evaluation
techniques by identifying areas of weaknesses.
Promoting effective communication within
organizations through the interchange of dialogue
between supervisors and subordinates.
16. PURPOSES OF
identifying areas for
Coaching and career
Develope sense of
effort to achieve goals
Relation with co-
N.B in some books
Administrative,Developmental and Program
17. REASONS FOR PERFORMANCE APPRAISAL
Why PA linked to Human Resource Development?
Because Performance review and
Ensures that the organizations business plan
objectives are clearly communicated and
Encourages and promotes a developmental,
mentoring but result oriented management style.
18. Encourages individuals to take responsibility for
problems, decisions, actions, managing change,
results, self and organization development.
Continually develops every individual to maximize
their job satisfaction and the contribution they make
to the business and its goals.
19. PRINCIPLES PERFORMANCE APPRAISAL
Some useful principles of how a successful PA
program is designed and operated are:-
Two-way communication between appraiser and
appraisee is essential. There must be mutual
understanding about the purpose, criteria, and
process of the appraisal program. it avoid
uncertainty and worry particularly among
Appraisers need to have human, technical and
conceptual skills to avoid subjectivity of appraisal
PA as a system is participatory and appraisee or
employees are best if they are involved in the
design and operation of the system. They feel
positive and constructive.
21. EVALUATION CRITERIA IN PERFORMANCE
According to Gregersen et. al. (1996) and Dowling et.al.
(1999) PA criteria should include:-
1. Hard goals are objectives, quantifiable and measurable
2. Soft goals tend to be relation ship or trait based such
as leadership style or inter personal skill
3. Contextual goals , taking in to consideration factors
that result from the situation in which performance
22. WHAT CRITERIA SHOULD BE USED TO
The key requirements of any PA system are:-
• Clear link between performance standards for a
particular job and organizational goals.
• Determined by answering questions "what really
makes the difference between success and failure on a
Performance appraisal system should be capable
of distinguishing effective performers.
Should distinguish effective from ineffective
23. Reliability: - Consistency of judgment during
evaluation by various ratters and
Acceptability: Performance appraisal should
have the advocacy of those involved
Practicality: Appraisal instruments have to be
easy for managers to understand and use.
24. The evaluated individual’s traits, behaviors, or job results can
be taken as some guidelines along with performance in
Initiative, aggressiveness, and personality are to be rated.
Results are difficult to define and subject to varying
interpretation by evaluators
Are judged effective or ineffective in terms of the results the
behaviors produce (either desirable or undesirable)
25. Job-Result :- Can be used if the organization has
measurable quantitative results ( like, dollar volume
of sales, amount of scrap, and quantity and quality
of work produced)
Also job turnover, absenteeism, profitability, and
production rates can be used to evaluate job result.
26. LEVELS OF MANAGEMENT AND
Extent of achievement
of organizational goals
Profitability and return
on capital employed
Performance of the
departments or teams
Co-ordination with other
Optimal use of resources
Costs Vs. revenues for a
given period of time
The communication with
For top level
For middle level
27. Quantity of actual out put against the targets
Quality of actual out put against the targets
Number of accidents in a given period
Rate of employee absenteeism
For front line supervisors
28. WHO SHOULD EVALUATE PERFORMANCE?
Any ratter need to have an adequate opportunity to
observe the ratee’s job performance over a
reasonable period of time.
Rating can be done:-
By committee of several supervisors:-
The supervisors chosen are those most likely to
come in to contact with the employee.
By peers (co-workers):-
In the peer evaluation system, the co-workers must
know the level of performance of the employee
29. By employee’s subordinates : It is used more for
the developmental aspects of performance
evaluation than are some of the other methods
Self evaluation: In this case the employee
evaluates himself or herself with the techniques
used by other evaluators.
30. WHEN AND HOW OFTEN SHOULD
APPRAISAL BE DONE?
Varies depend on purpose of appraisal
• For reward, once a year due to budget set
• For development, four or more times ayear
to check fitness of employees for the job
Larger organisations often conduct
performance appraisals once or twice a
year, and many smaller organisations follow
31. For how long?
One to two hours might be more
appropriate to appraise.
Many scholars suggest as PA should be
done up on the completition of projects or
after accomplishment of important tasks.
This group also suggest as it is even good
to make PA during jobs to see as it is on the
right track or not.
32. Discussion Question (3 min)
What is your openion concerning when and
how often performance appraisal should be
33. METHOD OF PERFORMANCE APPRAISAL
According to Strauss and Sayles( ) PA is divided in to three:-
Traditional, Newer and Result oriented appraisal
TRADITIONAL PERFORMANCE RATING:
o This method is very simple to understand and easy to
involves a completion of a form by the immediate
o The conventional rating scale form incorporates several
factors such as, job knowledge, judgment, organizing
ability, dependability, creativity, dealing with people,
delegation, and leadership.
34. CRITICISMS OF TRADITIONAL METHOD
highly subjective in the absence of objective
standards (excessive leniency or strictness, the
central tendency, the halo effect)
There is a divergence of opinion among raters as to
what is meant by such standards as
“unsatisfactory”, “good” and so on.
There may be divergent perceptions and
accordingly, different standards of judgments
among the raters
35. NEWER RATING METHODS
i. The Rank-order Procedure
Effective where 10 or less individuals are to be
Each individual is assigned a rank, first, second, third
Difficult for large number of employees
ii. Paired-comparison System
Appraiser put a tick mark against the name of individual
whom he considers better on the trait in question.
And the judgment is based on the sum
36. iii) The Forced Distribution Procedure
Form of comparative evaluation in which an
evaluator rates subordinates according to a
Judgments are on relative bases
Used to eliminate rating errors like leniency and
iv)The Forced Choice Technique
Forces the rater to select from a series of several
statements or traits, the one that best fits the
individual and which least fits and each of these
statements assigned a score.
Enhance objectivity of the procedure but it is costly
technique and difficult for many raters to
37. v) The Critical Incident Method
Developed by Flangan and Burns
Attempts are made to devise for each job a list of
critical job requirements
The superiors enlist the incidents as they happen
and in the process, tend to build up a record of each
subordinate with debit on the minus side and credit
on the plus side.
vii) The Field Review
An appraisal by someone outside the employee’s own
department, from the corporate office or HR department
Primarily in making promotion decisions at the
38. RESULTS-ORIENTED APPRAISAL:
This procedure has been known as Management
by Objectives (MBO).
MBO, is: “Management by objectives is a process
whereby the superior and subordinate managers of
an organization jointly identify its common goals,
define each individual’s major areas of
responsibility in terms of the results expected of
him, and use these measures as guides for
operating the unit and assessing the contribution of
each of its members.”
39. MBO PROCESS
Job review and agreement
on job duties
Continuing discussion of
Guided setting of
40. ESSAY METHOD
The appraiser prepares a written statement about
the employee being appraised. The statement
usually concentrates on describing specific
strengths and weaknesses in job performance. It
also suggests courses of action to remedy the
identified problem areas
The process is open-ended and very flexible
41. ADVANTAGES AND DISADVANTAGES OF ESSAY METHOD
Advantage: - freedom of expression.
Disadvantages:- The varying writing skills of
appraisers can upset and distort the whole process.
- The process is subjective and, in consequence, it
is difficult to compare and contrast the results of
individuals or to draw any broad conclusions about
43. STEPS IN PERFORMANCE APPRAISAL
Pigors and Myers suggest several steps to develop
and administer the program effectively such as:-
1. The personnel department attempt to obtain the
agreement of line management in respect of the
needs and objective of the program.
2 The personnel department has to examine the
plans of other organizations as well as the
3 Obtain the co-operation of supervisors in
devising the appraisal form.
44. 4. Explanations are made by the personnel relations
on the purpose and nature of the program to all the
superiors and subordinates.
5.Provideing intensive training to all the supervisors
with a view to obtaining unbiased and uniform
appraisal of their subordinates.
6. Checking of appraisals with a view to achieving
intra and inter-departmental consistency and
45. 7. There should be an arrangement for periodic
discussion of the appraisal by the superior with
each of the subordinates
8.As soon as the appraisal has been duly discussed,
attempts may be made to recommend for salary
increases or promotion, if these decisions seem
plausible in the light of appraisals
9. Provision for challenge and review of appraisals.
46. MAKING PERFORMANCE APPRAISAL MORE
ERRORS in PA:-
Two serious flaws in traditional PA;
Are primarily concerned with the past rather than
being forward looking through the use of setting
objectives or goals.
Usually been tied to the employee’s salary review.
47. Differences in perception and value systems influence
Halo Effect/horns effect: inappropriate generalizations
from one aspect of an individual’s performance to all
areas of that person’s performance.
Attribution bias:- the tendency to attribute performance
failings to factors under the control of the individual and
performance successes to external causes.
Leniency or Constant Error: Depending upon the
appraiser’s own value system which acts as standard.
48. Central Tendency:- the inclination to rate people in
the middle of the scale even when their
performance clearly warrants substantially higher
and lower rating.
Personal Bias: Not being able to make objective
judgments entirely independent of their values and
Recency effect:- the tendency of minor events that
happned recently tohave more influence on the
rating than major events of many months ago.
49. Similar-to-me error:- this is an erroneous tendency of
an appraiser who judges favorably the performance of
those appraisees who appear to be similar in their
behavior to himself.
First impression:- the tendency of a manager to make
positive or negative initial judgment of an employee and
allow the first impression to color or distort later
50. High potential error:- confusing an individuals future
potential with his current performance.
Negative and positive skew:- the rating of all individuals
as higher or lower than there performance actually
Spill-over Effect /Past performance error:- permitting an
individual’s poor or excellent performance in a previous
rating period to color the manager’s judgment about his
performance in this rating period.
51. EFFECTIVE PERFORMANCE APPRAISAL
Should be:- transparent, short, medium and long
Should have clearly defined, redefined priorities
Motivating through agreeing helpful aims and
Motivating through achievement and feed back
52. Is an assessment of training needs and learning
Agreement between appraisee and manager
mutual awareness, understanding and relationship.
Resolving confusions and misunderstandings.
Reinforcing and cascading organizational
philosophies, values, aims, strategies, priorities, etc
Counseling and feedback
53. CRITICISM ON APPRAISAL
Strebler et al (2001):- the ”Orthodox” approach argues
there are conflicting purppose of appraisal
appraisal can motivate staff by clarifying objectives and
setting clear future objectives with provision for trainning
and development needs to establish performance
Newton and Findly, (1996, p. 43) employees are
reluctant to confide any limitations to and concerns with
their current performance as this could impact on their
merit-related reward or promotion opportunities. The
conflict is PA as developmental process as appraisers
are challenged with differing roles as both monitors and
judge of performance.
54. McGregor, (1957):- managers are reluctant to make
negative judgment on an individual’s performance as it
could be de-motivating, leading to appraisee’s accusition
of lack of managerial support and contribution to an
individual poor performance.
One consequence of conflict avoidance is managers
rate all criterion in the middle rating point, called
Studies in USA and UK subjectivity in terms of
gender(Alimo-Metcalf, 1991, White, 1999) and
ethinicity(Geddes and Konrad, 2003) appraisers and
55. ”Radical Critique” of appraisal:- argues appraisal and
performance management are more covert forms of
management control (Newton and Findly, (1996, p. 43,
Suggestions to make PA more effective
Inter personal skills training
Removal of top down rating and using a360-degree
Using multiple rater using,colleague, customers, and
Objectivity and self reflection