Appraising and Improving

Performance
Performance Appraisal Programs
Performance Appraisal
+ Performance appraisal is the systematic,
periodic and an impartial rating of an
employees excellence in matters pertaining
to his present job and his potential for a
better job.
Performance management
The process of creating a work environment in
which people can perform to the best of their
abilities.
Performance Appraisal
P u r p o s e o f A p p r a i s a l
P r o g r a m s
Administrative Developmental
Compensation Ind. Evaluation
Job Evaluation
EEO/AA Support
Training
Career Planning
Purposes for Performance Appraisal
Reasons Appraisal Programs
Sometimes Fail
Lack of top-management
information and support
Unclear performance standards
Rater bias
Too many forms to complete
Use of the appraisal program
for conflicting (political)
purposes.
Managerial Issues Concerning Appraisals
1. There is little face-to-face discussion between the manager
and the employee being appraised.
2. The relationship between the employees job description
and the criteria on the appraisal form isnt clear.
3. Managers feel that little or no benefit will be derived from
the time and energy spent in the process, or they are
concerned only with bad performances.
4. Managers dislike the face-to-face confrontation of
appraisal interviews.
Managerial Issues Concerning
Appraisals (contd)
5. Managers are not sufficiently adept at rating
employees or providing them with appraisal feedback.
6. The judgmental role of appraisal conflicts with the
helping role of developing employees.
7. The appraisal is just a once-a-year event, and there is
little follow-up afterward.
Performance appraisal process
1. Establishing Performance Standards
2. Communicating the Standards
3. Measuring Performance
4. Comparing the Actual with the Standards
5. Discussing the Appraisal
6. Taking Corrective Actions
Performance Standards Characteristics
Strategic
Relevance
Individual standards directly
relate to strategic goals.
Criterion
Deficiency
Standards capture all of an
individuals contributions.
Criterion
Contamination
Performance capability is not
reduced by external factors.
Reliability
(Consistency)
Standards are quantifiable,
measurable, and stable.
Problems in Performance appraisal
1. Errors in Rating
a. Halo Effect
b. Stereotyping
c. Central Tendency
d. Constant Error
e. Personal Bias
f. Spill Over Effect
2. Lack of Reliability
3. Incompetence
4. Negative Approach
5. Multiple Objectives
6. Resistance
7. Lack of Knowledge
Essentials of an effective PA system
1. Mutual trust
2. Clear Objectives
3. Standardization
4. Training
5. Job Relatedness
6. Documentation
7. Feedback and Participation
8. Individual Differences
9. Post Appraisal Interview
10. Review and Appeal
Performance Appraisal Methods
Trait
Methods
Graphic Rating
Scale
Mixed Standard
Scale
Forced-Choice
Essay
Trait Methods
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.
Trait Methods
Forced-Choice Method
Requires the rater to choose from statements
designed to distinguish between successful and
unsuccessful performance.
1. ______ a) Works hard _____ b) Works quickly
2. ______ a) Shows initiative _____ b) Is responsive to customers
3. ______ a) Produces poor quality _____ b) Lacks good work habits
Essay Method
Requires the rater to compose a statement
describing employee behavior.
Behavioral Methods
Behavioral
Methods
Critical Incident
Behavioral Checklist
Behaviorally Anchored
Rating Scale (BARS)
Behavior Observation
Scale (BOS)
Behavioral Methods
Critical Incident Method
Critical incident
An unusual event that denotes superior or inferior
employee performance in some part of the job
The manager keeps a log or diary for each
employee throughout the appraisal period and
notes specific critical incidents related to how
well they perform.
Behavioral Checklist Method
The rater checks statements on a list that the
rater believes are characteristic of the
employees performance or behavior.
Behavioral Methods
Behaviorally Anchored Rating Scale (BARS)
Consists of a series of vertical scales, one for
each dimension of job performance; typically
developed by a committee that includes both
subordinates and managers.
Behavior Observation Scale (BOS)
A performance appraisal that measures the
frequency of observed behavior (critical
incidents).
Preferred over BARS for maintaining objectivity,
distinguishing good performers from poor
performers, providing feedback, and identifying
training needs.
Results Methods
Productivity Measures
Appraisals based on quantitative measures (e.g.,
sales volume) that directly link what employees
accomplish to results beneficial to the
organization.
Criterion contamination
Focus on short-term results
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.

Performance Appraisal under an MBO Program
MANAGEMENT BY OBJECTIVES
The Balanced
Scorecard
Personal Scorecard
The Balanced Scorecard
The appraisal focuses on four related
categories
Financial, customer, processes, and learning
Ensuring the methods success
Translate strategy into a scorecard of clear
objectives.
Attach measures to each objective.
Cascade scorecards to the front line.
Provide performance feedback based on
measures.
Empower employees to make performance
improvements.
Reassess strategy.
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Sources of Appraisal
Sources of Performance Appraisal
Manager and/or Supervisor
Appraisal done by an employees manager and
reviewed by a manager one level higher.
Self-Appraisal
Appraisal done by the employee being
evaluated, generally on an appraisal form
completed by the employee prior to the
performance interview.
Subordinate Appraisal
Appraisal of a superior by an employee, which is
more appropriate for developmental than for
administrative purposes.
Sources of Performance Appraisal
Peer Appraisal
Appraisal by fellow employees, compiled into a
single profile for use in an interview conducted
by the employees manager.
Why peer appraisals are used more often:
1. Peer ratings are simply a popularity contest.
2. Managers are reluctant to give up control over the
appraisal process.
3. Those receiving low ratings might retaliate against
their peers.
4. Peers rely on stereotypes in ratings.
Sources of Performance Appraisal
Team Appraisal
based on TQM concepts, that recognizes team
accomplishment rather than individual
performance
Customer Appraisal
A performance appraisal that, like team
appraisal, is based on TQM concepts and seeks
evaluation from both external and internal
customers
360 Degree appraisal
360 degree involves evaluation of a manager by everyone above,
alongside and below him. Structured questionnaires are used to collect
responses about a manager from his bosses, peers and subordinates.
The responses are collectively presented to the assesees in the form of
charts and graphs.
Four integral components
1. Self-appraisal
2. Superior Appraisal
3. Subordinates appraisal
4. Peer Appraisal
PROS
The system is more comprehensive in that responses are gathered
from multiple perspectives.
Quality of information is better. (Quality of respondents is more
important than quantity.)
It complements TQM initiatives by emphasizing internal/external
customers and teams.
It may lessen bias/prejudice since feedback comes from more people,
not one individual.
Feedback from peers and others may increase employee self-
development.

CONS
The system is complex in combining all the responses.
Feedback can be intimidating and cause resentment if employee feels
the respondents have ganged up.
There may be conflicting opinions, though they may all be accurate
from the respective standpoints.
The system requires training to work effectively.
Employees may collude or game the system by giving invalid
evaluations to one another.
Appraisers may not be accountable if their evaluations are
anonymous.
720 Degree appraisal
720 degree performance appraisal is an integrated method
of performance appraisal where, the performance of an employee is
evaluated from 360degrees (Management, Colleagues, Self and also
customers) and timely feedback is given and performance is evaluated
again based on the targets that are set. Hence, 720 degree performance
appraisal can be stated as twice 360 degree performance appraisal:
once when the appraisal is done and the targets are set and he second
where the feedback is given and the boss gives tips to achieve the
goals. Hence, there is a pre and a post round of feedback.

Considered as all round appraisal, the 720 degree performance
appraisal system gives an employee more than feedback from one
person.
This appraisal gives the employee a lot of feedback generally from
anywhere from 5 to8 people to provide the employee with an all round
assessment of his or her on the job performance.
720 degree for two round of feedback (a pre and post ) or a feedback
approach which is done again after 9 to 12 months
PRE APPRAISAL FEEDBACK This is the first appraisal step that is done
after the feedback is collected from the different dimensions or people
with whom the employee would interact. In this step, the performance is
evaluated, targets are set and feedback or training is organized to help
the employee achieve the target
(Self, Peer, Customer, Subordinate and Manager Appraisal)

POST APPRAISAL FEEDBACK : It is this step that makes the 720-
degree performance appraisal different and better than the360-degree
performance appraisal method. In this step, the performance is
evaluated based on the target set in the Pre appraisal and feedback is
given. Timely feedback and guidance helps to make the employee
improve his performance

Summary
Typically 360 degree would involve the
person themselves, their manager, selected
peers and selected people that the person
manages - 4 dimensions.
A 180 degree could be just the person and
their manager - or the person and their peers
- or the person and the people they manage -
2 dimensions.
540 degree is where additional groups are
asked to contribute - for example 'customers'
and other 'stakeholders' - 5 or more
dimensions.
Each of the respondents is asked to
complete a questionnaire that allows them to
score and comment on the person.
The questionnaire is normally based on
behaviours that are expected to create high
performance in the role

Other methods -
Confidential Report
Straight Ranking
Paired and Forced Distribution
Group Appraisal
Field Review
Assessment Centre
HR Accounting
Summary of Various Appraisal Methods
Performance Appraisal Interviews
Tell and Listen - nondirective
Types of Appraisal Interviews
Tell and Sell - persuasion
Problem Solving - focusing the
interview on problem resolution
and employee development
Appraisal Interview Guidelines
Ask for a Self-Assessment
Express Appreciation
Be Supportive
Follow Up Day by Day
Establish Goals
Problem Solving Focus
Minimize Criticism
Invite Participation
Change Behavior
Factors That Influence Performance