MAHATMA GANDHI CENTRAL UNIVERSITY

DEPARTMENT OF MANAGEMENT SCIENCES

PRESENTATION
ON
PERFORMANCE APPRAISAL

SUBMITTED TO SUBMITTED BY
DIWAKAR KUMAR (MGMT4012)
Dr. SVATI KUMARI MD ZIYAULLAH (MGMT4014)
MANAGEMENT SCIENCES DIPU SINGH (MGMT4011)
 Performance Appraisal
Performance appraisal is a method by which the job performance of an employee is evaluated.
Performance appraisals are a part of career development and consist of regular reviews of
employee performance within organizations.

Performance appraisal is defined by Wayne Cascio as “the systematic description of

employee’s job relevant, strength, weakness. Performance appraisal may be conducted
once in every 6 months or once in a year. The basic idea of the appraisal is to evaluate
the performance of the employee, giving him a feed back. Identify areas where
improvement is required so that training can be provided. Give incentives and bonus to
encourage employees
Objectives of performance
appraisal
Disadvantages of Performance Appraisal

•The halo
effect
•Raters bias

•Sampling error
 Performance Appraisal Performance Management
Managing and developing employee
Evaluating the performance and potential of
performance to foster growth within the
employees typically to determine compensation
organization.

Once or twice year Ongoing process

Conducted by HR department along with direct Multiple stakeholders are involved as the
managers process is ongoing

Corrections are made retrospectively It is a forward looking process

Performance appraisal is a system Performance management is a process

Typically inflexible Completely flexible

More of an individualistic approach Can adopt according to the team’s values

Considered as an operational tool to improve the

Primarily considered as a strategic tool
employee efficiency
 Need for Performance Appraisal
There are certain requirements expected from the employees for which performance appraisal are
conducted.

1. Providing information about the performance ranks on which decision regarding salary fixation,
promotion, etc. are taken.
2. There arises the need of performance appraisal in taking decisions pertaining to the salaries
of the employee, their promotion, etc. as performance appraisal helps in evaluating the
performance of the employees
3. Provides a performance review of the employee working as subordinates
4. It also helps in ascertaining whether the subordinates require training for the completion of
task or not.
5. The need for performance appraisal is there to get the information about the skills,
knowledge, strengths, and weaknesses of the employees
6. Performance appraisal is also required to maintain discipline in the organization
The Steps of Performance Appraisal
•Establishing performance standards
The first step of the performance appraisal process is establishing performance standards. It is
necessary for every organization to sat some standards which can be used as a basis of
measuring the performance of the employees. Then only the performance can be considered
as good or bad. The performance is regarded as good when it meets the required standards
and if it is not as per the standards it is considered as bad performance. So, the organization
must have a clearly defined set of standards or criteria for evaluating the performance of the
employees.
•Communicating the standards
After establishing the performance standards it is the responsibility of the organization the
communicate the standards clearly to all the employees, managers, superiors, evaluators, and
the raters. Communication of the standards to the employees will help the employees in
knowing the expectations of the managers from them. Managers, superiors, evaluators, and
raters must have a clear understanding of the performance standards in order to efficiently
evaluate the performance of their employees or subordinates.
•Measuring the actual performance
Measurement of the actual performance of the employees is a continuous process and it is a
very difficult step of the performance appraisal process. The work or the tasks performed by
the employee in a particular or a specified period of time are measured for the performance
appraisal. Proper measuring techniques must be adopted by the employers for the
measurement of the actual performance of the employees.
•Comparing actual performance with the desired performance
now at this stage of the performance appraisal process the actual performances that are
measured in the previous stage of the employees is compared with the desired
performances which mean the output that the superiors expect from the particular
employee.
•Discussing results- Feedback
After comparing the actual performance of the employee with his or her desired
performance the employer gives effective feedback to every employee for his or her
performance. Both negative and positive feedbacks are given to the employee. But the
negative feedbacks are combined with positive feedback so that the morale of the
employee cannot be reduced. It is important for the superior to keep in mind that while
giving feedback he or she must not use harsh words. It's important to give feedback on
sensitive employees in private.
•Decision making
Decision making is the last step in the process of performance appraisal. On the basis of
the performances of the employees, the superiors make decision related to the
employee without any discrination or biases. Various decisions are made by the HR
department on the basis of the evaluation by the seniors like rewards, praises, increase
in salary, promotions, etc.
 Realistic Appraisals

Motivations for soft (less-than-candid) appraisals

–The fear of having to hire and train someone new
–The unpleasant reaction of the appraisee
–A company appraisal process that’s not conducive to candor

Hazards of giving soft appraisals

–Employee loses the chance to improve before being forced to change jobs.
–Lawsuits arising from dismissals involving inaccurate performance appraisals.
Methods of performance appraisal

Traditional methods
•Ranking method: In this method, employees are ranked on the basis of their performance. Different measures are used by
different organizations for measuring the performance of their employees. Like, some rank their employees from 1 to 10 which
means 1 is the best performer and 10 stands for least performer. Some ranks as lowest to highest. This method has one drawback
that it is not able to find the difference in the performance level of different employees. It discriminates the employee on the basis of
good or bad performer qualitatively but not quantitatively.

•Paired comparison: This is a method in which different employees are paired on one to one basis and the comparison is made
between the two. These comparisons are made on the basis of their behavior or traits. The manager marks the best between the
two and through this, the ranks are given to employees on the basis of their comparison. The formula used for calculating the
possible number of pairs of a particular employee is N(N-1)/2.

•Grading method: In this method of performance appraisal, different grading patterns are established by the organization. Like the
grading may be done on the basis of outstanding, satisfactory, or unsatisfactory or may be best, better, good, or bad. Different
gradings are established or used by different organizations in order to grade their employees and evaluate their performances. This
method has one drawback that the person who is rating the employee on the basis of the grades may be biased to some or all the
employees and may mark everyone on the best side of the scale.

•Forced distribution method: This method was developed by Tiffen to eliminate the bias that is done by the managers in grading
the employees. In this method, it is assumed that the employees will perform to a normal statistical distribution i.e.10, 20, 40, 20,
and 10 percent. So, the performance of an employee must be marked on the basis of this distribution which helps in the reduction
of bias.

•Forced-choice method: Forced choice method was developed by J.P.Guilford in which positive and negative statements are
given to the rater, and the rating needs to be given to the employee on the basis of how each statement describes the employee.
Each rating has different markings which are not disclosed to the rater and on the basis of this performance appraisal of the
employees is done.
•Check-list Method: In the checklist method, various situations are given describing the characteristics, behaviors, etc. of the
individual and their answers are marked as ‘yes’ or ‘no’. In this method, the rater does not have any burden on him and he has to
simply mark the answers like ‘yes’ or ‘no’ depending upon the situation. Each question carries some weight according to the level of
importance. The evaluation sheet is given to the rater which he sends back to the HR department that assigns marks as per the
weight and then the performance of an employee is evaluated. The drawback of this method is that involves a lot of time, money,
and efforts.
•Critical incidents method: In critical incidents method, the critical incidents of the employees or the critical behaviors that make
the difference in the performance of the job whether effectively or ineffectively. The rater notes down all the critical incidents of an
employee on the basis of which performance appraisal takes place. This method helps in finding out the capabilities of the
employee to work effectively and efficiently in critical situations. But at the same time, this method has a drawback that it is a very
time consuming and burdensome process for the rater or the manager and the manager feels boredom in noting down the critical
incidents of the employees all the time.
•Graphic rating scale method: It is one of the popular and simplest methods of performance appraisal. In this method, the form is
made on which the rater has to rate the performance of the employee. Various performance factors and their ratings are given in
the form. This method is also known as linear scale rating as the rating is done normally on a 5 points scale.

•Essay method: In the essay method, the rater is asked to write at length about the characteristics, strengths, weaknesses,
behaviors, attitude, etc. and these traits are used in evaluating the performance of the employee which is used in performance
appraisal. This method also has drawbacks like the other methods, as when the rater is writing he writes at length without any
restrictions and the managers only get to know about the qualitative aspects of the individual and not the quantitative aspects due
to which this method lacks subjectivity.
•Field review method: This method of performance appraisal is not widely used as it is not so popular. Basically, this method is
used by the managers in order to review the ratings of the rater in case the biases are reflected in the ratings of a particular rater.

•Confidential report: This method of performance appraisal is very traditional and mainly used by the Government departments in
order to evaluate the strengths, weaknesses, capabilities, etc. of the employee for the purpose of promotions, or transfers, etc.
Modern methods
•Management by Objectives (MBO): In 1954, Peter F Drucker develop the concept of Management by Objective
(MBO) due to the drawbacks in the traditional method and the biases of the raters. In this process, it is said that the
management and the subordinates can work together for the achievement of the desired results. MBO provides aid
for the development of goals, for reviewing and performing the standards of the performance, and for the periodic
review of the performances of the employees. This method also suffers from some disadvantages. First is, it lacks
trust between the managers and the employees and second, it is very time-consuming.

•Behaviorally Anchored Rating Scale (BARS): This method was developed way back in the 1960s. Behaviorally
anchored rating scale (BARS) combines the ratings from different methods like the ratings are given to the
employee on the basis of critical incidents, narratives, and the quantitative aspects are also considered by using a
quantified scale that describes the performance as good or bad.

•Assessment centers: This method of performance appraisal was introduced in the 1930s in order to praise the
army officers in Germany. The concept was gradually spread across various countries across the globe.
Assessment centers are the areas outside the workplace where the employees are gathered and various activities
like group discussions, role plays, etc. are assigned to them in order to judge or evaluate their performances on a
different

•360-degree appraisal: This method of performance appraisal was initially developed in 1992 by the General
Electric company in the USA. In this method, the information about the skills, capabilities, strengths, and
weaknesses are taken from the managers, superiors, peers, subordinates, customers, and clients in order to
perform the overall performance appraisal. The collected information is then entered into the computer systems that
generate the performance report of the employee.
•Cost accounting method: This method of performance appraisal is used in order to
evaluate the performance on a monetary The relationship between the cost that is
incurred by the company in retaining the employee and the amount of output in
monetary terms that the employee is able to yield for the organization is used to
evaluate the performance for doing performance appraisals.

•Computerized and Web-based performance Appraisal:-

 Computerized and Web-based performance evaluations allow managers to retain
computerized employee notes, combine these notes with scores, and then produce
written text to help the appraisal results.
 It is particularly useful for companies that have workers required to do computer-
based jobs.
 Usually, a ranking committee consists of the direct boss of the employee and three
to four other supervisors.
 It is beneficial to use multiple raters.
 This can help to eradicate issues such as bias on the part of individual raters.
 Self-scoring of certain workers, usually in accordance with ranking of superiors.
 Problems with Performance Appraisal
1) Compare/contrast error
When appraising employees, it is important never to compare their abilities and using it to make a
judgment.

2) Similarity error
In every organization, some employees have a resemblance of different aspects with the manager. Now
some managers usually find it easy to reward such employees highly compared to those who portray
contrasting behaviour or opinion.
3) Bias
Bias is also one of the problems with performance appraisal managers often encounter. As a matter of
fact, everyone has some biases towards someone or something irrespective of how we portray them.
However, as a manager, it is imperative not to let the biases hinder the manner in which you approach
performance evaluation process.
4) Stereotyping
Stereotyping is closely related to biases only that in this case, you tend to make your judgment by your
predetermined mindset towards a particular employee’s race, gender, political affiliation, religious
background, culture and other characteristics.
5) The Halo effect
This is also known as the horns effect. It is a situation where you let your positive or negative feelings
towards an employee to influence your evaluation easily. It is necessary to judge each criterion
6) Recency effect
This is majorly about carrying out an appraisal for a short period before it takes
place. As stated earlier, an appraisal is an activity that takes place continuously,
which means that the focus should not only be for the short period before it
happens but rather the entire time of the year.
7) Attribution error
This is one of the trickiest problems with performance appraisal. It involves
making your independent belief on possible causes of some behaviours or
outcome and letting that influence your judgment.
8) Leniency and Severity tendencies
These mistakes usually arise as a result of distribution errors, which imply that the
overall dissemination of appraisal does not stand firm to the classic bell. This
means that some managers are too lenient and will end up appraising all
employees above average, others will give average whereas others would provide
below average.
 Supervisor’s role in appraisal
 Provide frequent informal coaching. Point out the good work that the
employee is doing. Help employees with performance deficiencies to
meet expectations.
 Indentify ways that the employee can develop and improve, and work
with the employee to create development plans. Ask the employee for
suggestions, in order to encourage taking an active role.
 Promptly communicate new opportunities and changes that affect the
employee’s work. Indentify observable actions that the employee should
take so that suggestions are concrete and can be implemented.
 Make informal notes (perhaps on a calendar) when the employee does
a good job, follows through on development plans, or has problems
doing so. These notes will help the supervisor with Periodic Reviews and
the completion of the performance management process.
 Keep track of praise or complaints from customers regarding an
employee’s work.
 REFRENCES

Wikipedia
https://www.myassignmenthelp.net/performance-appraisal-
assignment-help
https://www.csus.edu/indiv/s/sablynskic/chapter9perfappw
ebnotes.htm
http://www.authorstream.com/Presentation/soniyayadwadk
ar7-1583150-supervisors-role-appraisal/
THANK YOU