Performance Appraisal
- 2. CONCEPT • Performance appraisal is an objective assessment/review of an individual’s performance against well defined benchmarks. • Performance appraisal involves reviewing past performance, rewarding past performance, goal setting for future performance and employee development. • Performance Appraisals can be conducted by Supervisors, Peers, Customers, Subordinates or the by the Individual employee himself. • Performance Appraisal can be conducted once in three months, six months or once in a year depending on the organizational policy.
- 3. 1. Set Performance standards/expectations 2. Communicate Performance standards/expectations 3. Observe/Track Employee performance 4. Conduct Performance assessment 5. Reward/ Improvement plans
- 4. SIGNIFICANCE • Allows for two way communication on goals and performance. • Performance appraisal helps superiors to assess the work performance of their subordinates. • Helps in assessing the Training & Development needs of the employees. • It holds employee accountable for their job performance. • Performance appraisal provides grounds for employees to correct their mistakes, and it also provides proper guidance for employee development. • Serves as a basis for rewarding employees for superior performance.
- 5. • Performance appraisal helps to prepare pay structure/ compensation decisions for each employee working in the organization. • Promotions, Transfer, Layoff Decisions are determined by taking P.A into consideration. • Performance appraisal helps to review the potentiality of employees so that their future capability is ascertained and career planned. • Provides management with decision making information on human resources. • Builds stronger worker relationships and employee morale. • In the long run, improves organizational productivity.
- 6. PROCESS Objectives of Performance Appraisal Establish Job Expectations Design an Appraisal Programme Appraise Performance Performance Interview Archive Appraisal Data Use Appraisal Data for Appropriate Purposes F E E D B A C K PERFORMANCE MANAGEMENT
- 7. OBJECTIVESOF PERFORMANCE APPRAISAL • The first step in Performance appraisal is determining the purpose for which the performance appraisal is to be conducted. • Promotions, Training & Development, Compensation Reviews, Competency Building, Evaluation of H.R Programs, Providing Rewards & Incentives and Feedback & Grievances are the most common uses of conducting Performing Appraisal.
- 8. ESATBLISHJOB EXPECTATION • This step includes the process of informing the employees what is expected of him/her. • A discussion is held between a superior and a subordinate to review the major duties contained in the job description and the level of output/ performance the employee is expected to discharge within a certain period.
- 9. DESIGNAN APPRAISALPROGRAMME • This step answers the following Questions pertaining to Performance Appraisal: Whose Performance is to be assessed? Who are the raters? What Problems? How to Solve? What to Evaluate? When to Evaluate? What Methods?
- 10. APPRAISETHEPERFORMANCE • This step is where the actual evaluation/Assessment of employee performance takes place. • Performance is assessed mainly on the following Parameters: Quantity of Output Quality of Output Timeliness of Output Presence at Work Cooperativeness Job Knowledge Supervision/Leadership Abilities Versatility Health • Assessment should also include one’s potential to perform not just actual performance.
- 11. PERFORMANCEINTERVIEW • An interview in which the supervisor and subordinate review the appraisal and make plans to remedy the deficiencies and reinforce strengths. • It has three goals: o Change Undesirable Behaviour of underperforming employees. o Maintain Desirable Behaviour of performing employees. o Recognize Superior Performance Behaviours so that they will be continued. • Several methods are Tell & Sell, Tell & Listen, Problem Solving and Mixed.
- 12. ARCHIVEAPPRAISALDATA • The collected Appraisal Data is stored or Archived so that the information is retrieved at any time in the future. • The data also need to be stored to compare the employee performance over the years. • Issues such as Pay hike, confirmation of probationary services to name a few requires availability of past performance appraisal data records.
- 13. USEOFAPPRAISALDATA • The final step of Appraisal involves usage of the appraisal data for any one of the following purposes: Remuneration Administration Validation of Selection Programmes Employee Training & Development Promotion, Transfer and lay-off decisions Grievance & Discipline Programmes Human Resource Planning
- 14. PERFORMANCEAPPRAISALMETHODS Graphic Rating Scales Essays Confidential Reports BARS (Behaviourally Anchored Rating Scales) 360 Degree Appraisal
- 15. GRAPHIC RATINGSCALES • Simplest & most popular method of appraising performance. • It is a performance appraisal method that uses a predetermined scale to rate the worker on important job dimensions. • This type of evaluation lists traits (such as quality & reliability) and a range of performance values (from unsatisfactory to outstanding) for each trait. • The rating can be done on a numerical scale or a verbal anchoring system ranging from high to low scores. • The supervisor rates each subordinate by circling or checking the score that best describes his/her performance for each trait.
- 16. ESSAYS • Also Known as “Free Form Method”. • In Essay method the rater answers a series of questions about the employee’s performance in essay form on a number of categories and hence evaluation is done on a non- quantitative basis. • Its mostly used in combination with Graphic Rating Method • The categories are : o The rater’s overall impression of the employee performance. o The promotability of the employee o The jobs that the employee is now able or qualified to perform o The strengths and weakness of the employee. o The Training or Development assistance required by the employee
- 17. CONFIDENTIALREPORTS • It is mostly used in Government organizations for promoting and transferring employees. • In this method the subordinate is observed by his superiors regarding his performance in the job and on his duties done and thereafter a confidential report on his performance is prepared. • Then it is forwarded to the top management officials for taking necessary actions. • As the name suggests, they are highly secretive and hence the feedback is not shared with the subordinates.
- 18. • It is a descriptive report prepared generally at the end of every year. • Key Factors assessed in Confidential Report are: o Absenteeism of an employee o Knowledge of an Employee o Nature & Quality of Work o Strengths and Weaknesses of Employee o Behavior of an employee with colleagues, superiors and public o Integrity & Honesty o Ability of Supervision and Controlling o Any Complaints against the employee.
- 19. BARS • Behaviourally anchored rating scales are rating scales whose scale points are determined by statements of effective and ineffective behaviors . • A rater in his evaluation indicates which behaviour on each scale best describes an employee’s performance. • The unit of analysis is an employee’s behaviour critical to the performance of a given task/job instead of focusing on the employee’s traits or characteristics. • A typical BARS is represented with the scale points ranging from 5 to 9.
- 20. DEVELOPING ABEHAVIOURALLY ANCHOREDRATINGSCALE • The following 5 steps are involved in developing such a scale: i. Generate Critical Incidents. ii. Develop performance dimensions. iii. Reallocate incidents. iv. Scale the incidents. v. Develop a final instrument
- 21. 360- DEGREEAPPRAISAL • In 360 Degree Appraisal, Multiple Raters/Stakeholders are involved in evaluating performance (Multi-source feedback). • It is a systematic collection of performance data of an individual or group, derived from a number of stakeholders like: Immediate supervisors Customers Peers Team members Self. • Ensuring Confidentiality is a key aspect of such an appraisal. • The feedback form include questions that are measured on a rating scale and also ask raters to provide written comments.
- 23. WHATDOES360 FEEDBACKMEASURE? • Behaviours & Competencies • Strengths and Weakness • Coaching and Mentoring Skills • Relationship Building Skills • Managerial & Leadership Skills • Commercial and Customer Understanding • Job Related Technical Expertise/Knowledge • Critical Thinking, Problem Solving & Risk Taking ability.
- 24. ADVANTAGESVSDISADVANTAGES PERFORMANCE APPRAISAL METHOD ADVANTAGES DISADVANTAGES 1. Graphic Rating Scale • Low Cost. • Easily Constructed. • Simple. • Quantifies job Performance. • High risk of Rater’s Bias/Error • Often Generic and may not represent job very well. • Restrictions on the range and type of rater responses. 2. Essay • Evaluation not restricted by limited options. • Can Cover a variety of factors. • Scope for Specific Behavioural examples. • Few Development Demands. • Highly dependent on the writing skills of the rater • Time Consuming. • Cannot be quantified and hence difficulty in performance comparison. • Difficulty in Interpretation & Analysis.
- 25. PERFORMANCE APPRAISAL METHOD ADVANTAGES DISADVANTAGES 3. Confidential Reports • Covers a variety of rating parameters. • Conducted by immediate supervisor based on constant behavioural observation. • Used as a main criteria for Promotion/Transfer decision of employees particularly in the govt sector. • Feedback is restricted and hence scope of improvement limited. • High Chances of bias/error by the supervisor. • Reasons for a particular evaluation not specified/mentioned. • Major decisions taken based on just a single rater’s observation . 4. BARS (Behaviourally Anchored Rating Scale) • Behaviorally based. • Performance Dimensions clearly defined. • Quantifiable Data. • It is fully Individualized. • Development is Time Consuming and Expensive. • Requires high Maintenance/ Constant Updation.
- 26. PERFORMANCE APPRAISAL METHOD ADVANTAGES DISADVANTAGES 5. 360 Degree Appraisal • Multiple Raters/Stakeholders involved in rating, hence most credible method. • Employees are evaluated on varied parameters (Customer Service, Leadership etc.). • Most suitable for overall development of an employee. • Perceived to be fair by employees as more objectivity involved. • Increases responsibility of employees to their customers. • Time Consuming & Expensive • Requires High involvement and commitment from various stakeholders. • Can Suffer because of lack of knowledge on the part of the stakeholders. • Cannot be used for employees across all levels of hierarchy. • Inconsistency in Interpretation.
- 27. ERRORS DURINGPERFORMANCEAPPRAISAL • Performance Appraisal are subject to a wide variety of inaccuracies and biases referred to as Rating Errors. • Errors arise in the rater’s observations, judgment, and information processing and can have a serious impact on assessment results. • The most Common Rating Errors are as follows Central Tendency Halo Effect Rater Effect Leniency or Severity Primacy & Recency Effects Contrast Effect Attribution Error Spillover Effect Status Effect Similar to me effect Stereotyping Performance dimension
- 28. 1. Central Tendency: • The inclination to rate people in the middle scale even when the performance clearly warrants a substantially higher or lower rating. • The attitude of the rater is to play safe. 2. Halo Error/Effect: • Inappropriate generalizations from one aspect of an individual’s performance to all areas of that person’s performance. • Here, one negative aspect might influence an employee’s overall performance assessment. 3. Rater Effect: • Includes favoritism, stereotyping, and hostility to influence the evaluation. • Evaluation determined by rater’s attitude towards the subject and not on actual outcome or behaviour.
- 29. 4. Leniency or Severity: • The error caused by the tendency of the rater to rate an employee higher or lower than what his/her actual performance warrants. • Influenced by a rater’s style of evaluation either being too easy on the employee or being overly critical of the employee’s performance. 5. Primacy & Recency Effect: • The rater’s ratings are heavily influenced either by behaviour exhibited by the subject during the early stages of the review period (Primacy) or by outcomes or behaviours exhibited near the end of the review period (Recency). • Error caused by drawing judgment of employee performance too soon or too late in the review period.
- 30. 6. Contrast Effect: • Tendency of a rater to evaluate people in comparison with other individuals rather than against the standards of the job. 7. Attribution Error: • The tendency to attribute performance failings to factors under the control of the individual and performance success to external causes/factors. 8. Spill Over Effect: • Refers to allowing past performance appraisal ratings to unjustifiably influence current evaluation. • Past Rating, Good or Bad, result in similar rating for current period although the demonstrated behaviour does not deserve the particular rating.
- 31. 9. Status Effect: • It refers to overrating of employees in higher level job or jobs held/perceived high esteem & underrating employees in lower-level job or jobs held/perceived in low esteem. 10. Similar to me Effect: • The tendency of the rater to rate employee’s who resemble themselves more highly than they rate others. 11. Stereotyping: • The tendency to generalize across groups and ignore individual differences. 12. Performance Dimension Order: • Two or more Dimensions on a performance instrument follow or closely follow each other and both describe/rotate similar quality. • The rater rates the first dimension accurately and then rates the second dimension similar to first because of their close proximity.
- 32. REDUCINGERRORS • Conduct Training sessions for Performance Appraisal Evaluators/Raters to train them on the following aspects: Policies and Process in place for Performance appraisal in the Organization. Create awareness of the Common Performance Appraisal Errors/Biases. Provide means to Guard against or overcome those Errors/Bias. • Pre Evaluation, the rater needs to be provided with a checklist to obtain and review the relevant job related information. • Performance Evaluation Factors/Standards must be clearly defined to the raters to avoid evaluation on unmatched/irrelevant criteria.
- 33. • Design the Performance Appraisal form and scales in a way that is comfortable and easy to use for the Evaluator to avoid any confusion/misinterpretation. • Promote frequent, random observation of the employee in varied situations to provide the evaluator sufficient idea before performing the appraisal & rating the employee. • Encourage Evaluators to Document performance/behaviour on a consistent basis to improve the recall. • Focus must be on Performance/Job Behaviour of the employee & not on the person, hence evaluation must be performance oriented and not person oriented to reduce any bias.
- 34. • Review the Performance Appraisal Draft with a H.R specialist in the organization before proceeding with providing feedback to the employee or taking any action. • Have mechanisms in place to monitor/control the influence of external factors while appraising the performance. • Ensure Performance Appraisal is not the only basis to reward or take action against an employee. • Use multiple raters wherever possible to get a better overview of an employee’s performance. • Higher level of management must be actively involved in reviewing and updating the Performance Appraisal system in the organization on a periodic basis.