Performance Appraisal

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

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

Purpose of performance appraisal

Evaluative• Compensation decisions

• Staffing decisions• Evaluate the selection system

Developmental• Performance feedback

• Training and developmental needs

• Feedback for improvement

A casual, unsystematic and often haphazard appraisal

A traditional and highly systematic appraisal

Appraisal through mutual goal setting

Approaches to performance appraisal

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

Traditional methods

MBO Behaviorally anchored rating scale Assessment centers 360-degree appraisal Cost accounting method

Modern methods

360 appraisal

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

Advantages

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

Disadvantages

Organisational goals and Context

Indepth Interview & personal assessment

Action planning ,Managerial

alignment Initial coaching

Narrative report ,one-one feedback

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Measurement Methods Traits Behaviors Results

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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.

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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.

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Results Methods

1. Productivity◦ How much do you get done?

2. 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.

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Sample Checklist for Diagnosing the Causes of Performance

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Graphic Rating Scale

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Behavior Observation Scale (BOS)

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Behaviorally Anchored Rating Scale (BARS)

FIREFIGHTING STRATEGY: Knowledge of Fire Characteristics.

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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.

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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.

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.

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Common Rating Errors

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. 23

Common Rating Errors (Ctd.)

Reward effect Raters error Similarity error