Performance appraisal notes and details.

According to Flippo, a prominent personality in the field of Human
resources, “performance appraisal is the systematic, periodic and an
impartial rating of an employee’s excellence in the matters pertaining
to his present job and his potential for a better job.”
Performance Appraisal

• In simple terms, performance appraisal may be understood
as the review of an individual’s performance an orderly
way, the performance is measured by considering factors
like job knowledge, quality and quantity of output,
initiative, leadership abilities, supervision, dependability,
co-operation, judgment. versatility, health, and the like.
Evaluation should not be restricted to past performance
alone but, future performances of the employee should also
be assessed

Need and Importance of Performance
Appraisal
Performance is always measured in terms of outcome and not
efforts. Performance Appraisal is needed in most of the
organizations in order:
(1) To give information about the performance of employees
on the job and give ranks on the basis of which decisions
regarding salary fixation, demotion, promotion, transfer and
confirmation are taken.
(2) To provide information about amount of achievement and
behavior of subordinate in their job. This kind of information
helps to evaluate the performance of the subordinate, by
correcting loopholes in performances and to set new standards
of work, if required.

3) To provide information about an employee’s job-
relevant strengths and & weaknesses.
(4) To provide information so as to identify shortage in
employee regarding ability, awareness and find out
training and developmental needs.
(5) To avoid grievances and in disciplinary activities in
the organization.
(6) It is an ongoing process in every large scale
organization

1. Ranking Method: It is the oldest and simplest method of
performance appraisal in which employees’ are ranked on certain
criteria such as trait or characteristic. The employee is ranked from
highest to lowest or from worst to best in an organization. Thus if
there are seven employees to be ranked then there will be seven
ranks from 1 to 7.
2. Paired Comparison: In method is comparatively simpler as
compared to ranking method. In this method, the evaluator ranks
employees by comparing one employee with all other employees in
the group. The rater is given slips where, each slip has a pair of
names, the rater puts a tick mark next those employee whom he
considers to be the better of the two. This employee is compared
number of times so as to determine the final ranking

3. Grading Method: In this method, certain categories are
defined well in advance and employees are put in particular
category depending on their traits and characteristics. Such
categories may be defined as outstanding, good, average, poor,
very poor, or may be in terms of alphabet like A, B, C, D, etc.
where A may indicate the best and D indicating the worst. This
type of grading method is applied during Semester pattern of
examinations

Forced Distribution Method: This method was evolved to abolish the
trend of rating most of the employees at a higher end of the scale. The
fundamental assumption in this method is that employees’ performance
level conforms to a normal statistical distribution. For example, 10 per
cent employees may be rated as excellent, 40 per cent as above average,
20 per cent as average, 10 per cent below average, and 20 per cent as poor.
5. Forced-choice Method: The forced-choice rating method contains a
sequence of question in a statement form with which the rater checks how
effectively the statement describes each individual being evaluated in the
organization. There may be some variations in the methods and statements
used, but the most common method of forced choice contains two statements
both of which may be positive or negative. It may be both the statement
describes the characteristics of an employee, but the rater is forced to tick
only one i.e the most appropriate statement which may be more descriptive
of the employee. For example,
a rater may be given the following two statements:
(i) The employee is hard working.
(ii) The employee gives clear instructions to his subordinates

6. Check-list Method: The main reason for using this method is to reduce
the burden of evaluator. In this method of evaluation the evaluator is
provided with the appraisal report which consist of series of questions
which is related to the appraise. Such questions are prepared in a manner
that reflects the behavior of the concerned appraise. Every question has
two alternatives, yes or no, as given below:
1. Is he/she respected by his/her subordinates? Yes/No
2. Is he/she ready to help other employees? Yes/No
3. Does her behavior remain same for everyone in the organization?
Yes/No
The concerned rater/evaluator has to tick appropriate answers relevant to
the appraises.

7. Critical Incidents Method: This method is very useful for
finding out those employees who have the highest potential to work
in a critical situation. Such an incidence is very important for
organization as they get a sense, how a supervisor has handled a
situation in the case of sudden trouble in an organization, which
gives an idea about his leadership qualities and handling of
situation.
8. Graphic Scale Method: It is one of the simplest and most popular
techniques for appraising performances of employee. It is also known as
linear rating scale. In graphic rating scale the printed appraisal form is
used to appraise each employee.

9. Essay Method: In this method, the rater writes a detailed
description on an employee’s characteristics and behavior,
Knowledge about organizational policies, procedures and rules,
Knowledge about the job, Training and development needs of the
employee, strengths, weakness, past performance, potential and
suggestions for improvement
10. Field Review Method: As employees are not rated by immediate
boss, the rater from other department may not be familiar with the
conditions in an employee’s work environment which may hamper
his ability and work motivation to perform.

Modern Methods
1. Management by Objectives (MB0): The concept of ‘Management
by Objectives’ (MBO) was coined by Peter Drucker in 1954. It is a
process where the employees and the superiors come together to identify
some goals which are common to them, the employees set their own
goals to be achieved, the benchmark is taken as the criteria for
measuring their performances and their involvement is there in deciding
the course of action to be followed.
Entire program me of MBO is divided in four major steps i.e setting up
of goal, action planning, comparison and timely review

2. Behaviorally Anchored Rating Scales: This method is a
combination of traditional rating scales and critical incidents methods.
It consists of preset critical areas of job performance or sets of behavioral
statements which describes the important job performance qualities as
good or bad (for e.g. the qualities like inter personal relationships,
flexibility and consistency, job knowledge etc).
3. Assessment Centres: It is a method which was first implemented
in German Army in 1930. With the passage of time industrial houses
and business started using this method. This is a system of assessment
where individual employee is assessed by many experts by using
different technique of performance appraisal. The techniques which
may be used are role playing, case studies, simulation exercises,
transactional analysis etc.

4. 360 Degree Performance Appraisals: This method is also known as
‘multi-rater feedback’, it is the appraisal in a wider perspective where the
comment about the employees’ performance comes from all the possible
sources that are directly or indirectly related with the employee on his job.
In 360 degree performance appraisal an employee can be appraised by his
peers, managers (i.e. superior),
subordinates, team members, customers, suppliers/ vendors - anyone who
comes into direct or indirect
contact with the employee and can provide necessary information or feedback
regarding performance of the employee the “on-the-job”.
The four major component of 360 degree performance appraisal are
1. Employees Self Appraisal
2. Appraisal by Superior
3. Appraisal by Subordinate
4. Peer Appraisal.

5. Cost Accounting Method: In this method performance of an
employee is evaluated on the basis of monetary returns the employee
gives to his or her organization. A relationship is recognized between the
cost included in keeping the employee in an organization and the benefit
the organization gets from him or her. The evaluation is based on the
established relationship between the cost and the benefit.
The following
factors are considered while evaluating an employee’s performance:
1. Interpersonal relationship with others.
2. Quality of product produced or service given to the organization.
3. Wastage, damage, accidents caused by the employee.
4. Average value of production or service by an employee.
5. Overhead cost incurred.

The Performance Appraisal Process
1. Establish Performance Standards: It begins by establishing
performance standards i.e. what they expect from their employee in
terms of outputs, accomplishments and skills that they will evaluate
with the passage of time. The standards set should be clear and
objective enough to be understood and measured
2. Communicating the Standards Set for an Employee: Once the
standards for performance are set it should be communicated to the
concerned employee, about what it expected from them in terms of
performance. It should not be part of the employees’ job to estimate
what they are expected do.

Measuring of the Actual Performances: It is one of the most crucial
steps of performance appraisal process. It is very important to know as
how the performance will be measured and what should be measured,
thus four important sources frequently used by managers are personal
observation, statistical reports, oral reports, and written reports.
Comparing Actual Performance with Standards Set in the
Beginning: In this step of performance appraisal the actual
performance is compared with the expected or desired standard
set.

Discussion with the Concerned Employee: In this step performance
of the employee is communicated and discussed. It gives an idea to the
employee regarding their strengths and weaknesses. The impact of this
discussion may be positive or negative.
Initiate Corrective Action: Corrective action can be of two types;
one is instant and deals primarily with symptoms. The other is basic
and deals with the causes. Instant corrective action is often described as
“putting out fires”, where as basic corrective action gets to the source
from where deviation has taken place and seeks to adjust the differences
permanently.

Benefits of Performance Appraisal
1) For the Organizations: Following are the benefits of an
organization.
It leads to better performance throughout the organization, due to
successful communication of the objectives and values of the
organizations, sense of being close to the organization, loyalty and
improved relationships between managers and staff.
 Overall improvement in the duties performed by each employee of
the organization.
 Due to performance appraisal of employee new ideas for
improvement in their work is generated.

 Long-term plans can be generated.
 The need for training and development can be identified more clearly.
 A traditions of nonstop improvement and success in the organization
can be formed and maintained.
 Career development plans can be chalked out for capable employee to
enhance their performance in future.

2) For the appraiser: Following are the benefits to the appraiser:
 It gives an opportunity to the appraiser to develop a general idea of
individual jobs and departments.
 For every new or difficult situation new idea is generated for
improvement or for overcoming that problem. It gives an opportunity
to integrate team and individual objectives and targets with
departmental and organizational objectives.
 It gives an opportunity to explain the amount of work expected by
manager from teams and individuals.
 It gives an opportunity to focus more on targets.
 It enables to form more productive relationship with staff based on
mutual trust and understanding.

3) For the Appraisee: Following are the benefits for the appraisee:
 Increased motivation.
 Increased job satisfaction.
 Increased sense of personal value.
 Increase in morale of an employee.
 It gives an opportunity to know their strength and weaknesses.
 It gives an idea about areas of their improvement.
 There will be a chance to subordinate to express his views even after
performance appraisal
 An employee should express his emotional needs and his value system
which is considered
to be important today-

Performance appraisal notes and details.

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