Understanding

Compensation
in HRM

• Raman

1
Two guiding questions that impact any
firm’s compensation decision.
•How much should we pay
each person in our
organisation?
• How should the payment
package be made up?

2
 What then is meant by this word Compensation?

➢ Compensation is one of the HR tools deployed by organisations to manage and

motivate employees.

➢ It is not just salary but an array of instruments directed at different levels of

employees at the organization.

➢ Compensation is interlinked with performance and its appraisal

➢ Talent and training invested and the tacit knowledge acquired over working many

years in a firm are difficult to replace.

➢ Compensation is a process done regularly in accordance with the performance

planning system

➢ Read me :https://www.cipd.co.uk/knowledge/fundamentals/people/pay/reward-

factsheet

3
What are the strategic questions guiding any compensation decision for a
company ? What is the behind the back conversation going on?

• What are we seeking to achieve in designing or in

redesigning our payment systems?
• What are our competitors doing?
• How do we wish to position ourselves as an employer so
as to compete effectively in the labour market?
• What constraints do we face when designing our
compensation and reward systems?
• How can we avoid demotivating employees when
making decisions about how much and in what way we
pay them?
• To what extent should employees or their
representatives be involved in helping to determine who
is paid how much and in what form?

4
Compensation,
Perceptions of fairness
and overall strategy
• Motivate employees towards directed
strategic pathway and roadmap
• As discussed, the wage is an exchange
relationship between an employer and you
in return for your work and performance
• Which means employees feel fairly
compensation for their hard-work and in
realising the strategic goals of the
organization. Fairness on comparative,
procedural and market basis.
• Remember the saying a fair days work
equals a fair day’s pay.
• Fairness issues are at the heart of
effective compensation. People must feel
that the process has been rigorous and
everyone has been rewarded proportionate
to their performance.

5
Why do we need Compensation?
• To establish a fair and equitable remuneration
offering similar pay for similar work.
• To attract qualified and competent personnel.
• To retain the present employees by keeping
wage levels in tune with competing units.
• To control labour and administrative costs in
line with the ability of the organisation to pay.
• To improve motivation and morale of
employees and to improve union-management
relations.
• To project a good image of the company and
to comply with legal needs relating to wages
and salaries

6
 What comprises Compensation?
• Includes not only salary but also direct and indirect
rewards and benefits given by the organisation for
his or her contribution.[We will distinguish between
a reward and a benefit in due course as we canter
along].

• It is a tool deployed by the organisation to foster

the values, cultural set

[ a shared set of meanings and vocabularies] and

behaviour they require.

• It is an instrument that enables the organisation to

achieve its business objectives.

7
What are the key objectives of compensation?

➢ Attract talent from other firms

➢ Retain talent and prevent them from going outside as a system of competency
pay that are individually tailored by various remunerative instruments.
➢ Ensure equity as discussed above
➢ New and desired behavior of employees reward them to fit aligned
behaviours.
➢ Control costs and manage the wage bill efficiently
➢ Compliance with legal rules
➢ Streamline operations and reduce opacity

8
Compensation’s components-

1. Financial Compensation
It is divided into to components—

▪ Direct Financial Compensation-Paid at regular intervals-salaries-wages

▪ Indirect Financial Compensation-Benefits such as retirement plans—

comprise of retirement plants, leaves[ a benefit not an entitlement].

▪ II. Benefits : Employee services-cost to the company ➔ Get lost

and work you will have no food [like the Charles Dicken’s books on
the master telling starving poor child to get lost when he asks for
food ]mean that it is the company’s wish- example free lunch and
health plan from cult fit. 9
Compensation’s Component
II. Non-Financial Compensation

• Growth and development opportunities

• T&D Opportunities

• Career Development

• Recognition-Emotional empathy, security, reinforcement

• Acknowledgement of Emotional Labour-Arlie Hochschild

• Healthy work environment.

10
As discussed Benefit and
Compensation differ in meaning
• Benefits are forms of value and are not obligatory
on the company’s part, other than payment, that
are provided to the employee in return for their
contribution to the organization, that is, for doing
their job.
• Some benefits, such as unemployment and
worker's compensation, are legally mandated.
(Worker's compensation is really a worker's right,
rather than a benefit.) and are both a benefit and
a right
• Read this—
• https://www.marsdd.com/mars-
library/employee-compensation-salary-
wages-incentives-and- commissions/

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 Allowance
• An allowance is an amount paid to employees as part of
their salary package or separately credited into their bank
account, or to reimburse or help them cope with their out of
pocket expenses incurred on behalf of the firm.
• Examples--
• Dearness Allowance
• Mobile Allowance
• Travel Allowance

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THE CRUX OF ANY TALK OF COMPENSATION-
EQUITY

• Organisations must develop compensation and rewards

an outlining equitable process for compensation.

• A combination of wages, benefits and incentives in the

right balance will ensure a competitive edge today and a
sustainable strategy for tomorrow.

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When does compensation
arise
• New Appointments
• Existing employees due for a raise(for
example annual increment)
• → An employee taking up a new role
• → Valuable talent which may be prone to
leaving due to compensation
• → Market condition
• → Critical and or scarce skills or
employment.

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Prerequisites of effective compensation
• Wage and salary plans should be sufficiently flexible to address two aspects==
variable performance and ability to adapt to the market.
• Job evaluation must be done scientifically and for that we need to do a sound job
analysis.
• Wage and salary administration plans must always be consistent with overall
organisational plans and programmes.
• Wage and salary administration plans and programmes should be responsive to
the changing local and national conditions.
• These plans should simplify and expedite other administrative processes.

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What are the cardinal principles you must
follow to make compensation effective--

1 2 3
BE CONSISTENT FOLLOW YOUR MAINTAIN A CRITICAL
ORGANIZATION'S BALANCE BETWEEN
ESTABLISHED ORGANIZATIONAL NEEDS
COMPENSATION PHILOSOPHY AND INDIVIDUAL
CONSIDERATIONS TO ARRIVE
AT AN OPTIMAL
COMPENSATION STRUCTURE.

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What does compensation planning aim at?
• The most important objective of any pay system is fairness
or equity.
• The term equity has three dimensions. Let us look into
each of these terms.
➢ Internal equity
➢ External equity
➢ Individual equity
➢ Procedural equity

• Remember if you violate these principles you may be taken to

court.
Tuesday, 15 December 2020 17
Equity and its components within the
firm
• Internal equity refers to employees viewing their pay as equitable given
other pay rates in the organization whereas external equity applies the
rationale of equitability with respect to the external labour market and
other similar firms.
• Individual equity refers to the fairness of an individual’s pay as compared
to what his/her coworkers are earning for the same or very similar jobs in
the company.
• Finally, procedural equity refers to the perceived fairness of the processes
and procedures used to make decisions regarding the allocation of pay.

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Apart from internal equity there is
external equity
• To ensure that what you pay is on par with the industry you are in.
• A market-competitive pay system is a pay system that aligns the
organization’s pay with the relevant labor markets.
• Plan data collection, collect survey data and analyse information
• There are professional firms that can help you compare and understand
and provide a historical analysis of jobs and compensation in the past few
years, now and what is expected.

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Factors determining compensation
levels
• Job needs
• Ability to pay
• Cost of living
• Prevailing wage rates
• Unions
• Productivity
• State regulation
• Demand and supply of labour

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Determining the base pay of an
employee
• Base pay is regular fixed payment made to an employee in
exchange for performance of the duties and responsibilities
for his or her rolex
• Base pay—basic+allowance
• Base pay determination is subjective and based on your
compensation etho-but also depends on market
competetive ness and perceived as being consistant and
fair
• You need to decide-the role of the position in the
organisation, complexity of tasks in the organisation,
market and sector wise data.
•

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Two scenarios handling compensation
• Salary compression- Longer term employees salaries are lower than those who enter
the firm today and are affected by market and inflation in comparison with fresh
campus hires who are paid a handsome starting salary.
• But one can’t be fair with the rivets or middle managers who will feel discriminated
against the younger employees who have been provided laptops and other
amenities.
• Institute an aggressive merit based pay
• Authorise equity adjustment for those whom you thing are valued and are victims of
pay compression
• Geography-Rurdapur versus Whitefield in Bangalore.

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Considerations for anyone in Designing a holistic
Compensation System

• Internal and external pay

• Fixed vs. variable pay
• Performance vs. membership
• Job vs. individual pay
• Below market vs. above market
compensation
• Open vs. secret pay[financial institutions]

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Compensation has the following
elements
• Compensation offered by an organisation can
come both directly through base pay and
variable pay and indirectly through benefits.
• Base Pay
• Variable Pay
• Benefits

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Variable Pay-what is it all about?
• Variable pay is an incentive or bonus employers pay to
employees whose performance EITHER meets or
SURPASSES company expectations, provided the
company meets its own goals for productivity and
profitability.

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 VARIABLE PAY KEY VERSUS INCENTIVE PAY

• Variable Pay

▪ Tying pay to some measure of individual, group,

or organizational performance.

• Incentive Pay Programs

▪ Establish a performance “threshold” to qualify for incentive payments.

▪ Emphasize a shared focus on organizational objectives.

▪ Create shared commitment in that every individual contributes to

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organizational performance and success.
WHY DO COMPANIES PAY INCENTIVES?

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When does an incentive plan become
effective?
• Grant of incentives based on individual
performance differences.
• When the firm has the financial resources to reward performance.
• When the organization has set out clearly defined, accepted, and challenging yet
achievable performance standards.
• When the organization an easily understood payout formula
• When the organization has administrative costs reasonable.
• Do not “ratchet up” performance standards.

Tuesday, 15 December 2020 28

Individual Incentives

• Individual incentive plans are the most widely used

pay for performance plans in industry.
• Piece rate work plans
• Standard hour plans
• Merit pay raises
• Lump sum merit payments
• Sales incentives and commissions.

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Merit Pay
• Merit Pay Program (Merit Raise)
▪ Links an increase in base pay to how successfully an employee
achieved some objective by increasing the employee's salary on a
long-term basis.

▪ Merit Guidelines
▪ Guidelines for awarding merit raises that are tied to performance
objectives.

Tuesday, 15 December 2020 30

Some demerits of merit pay(hint linked to
salary)
• Money for merit increases may be inadequate to satisfactorily raise all
employees’ base pay.
• Managers may have no guidance in how to define and measure
performance; there may be vagueness regarding merit award criteria.
• Employees may not believe that their compensation is tied to effort and
performance; they may be unable to differentiate between merit pay
and other types of pay increases.
• Employees and their managers may hold different views of the factors
that contribute to job success.
• Merit pay plans may create feelings of pay inequity.
Tuesday, 15 December 2020 31
 Difference between Merit and
Variable pay.
• Merit based pay can create a self-serving system where people game the system to
secure the reward
• Merit pay breaks unity and may not be objective and the organization looks like a
rejection centre chopping poor performers at every go.
• Variable pay one the other hand is a top up pay over an above base pay granted on
individual contributions at the end of the specific period. May be single lump sum
increase that is not connected with the salary.
• Since base pay is not touched unlike merit pay labour costs can be controlled
• Check-http://smallbusiness.chron.com/difference-between-merit-pay-incentives-
pay-performance-65935.html

Tuesday, 15 December 2020

32
Individual compensation.

• Conventional piecework more pieces produced more compensation but produce

more at the cost of quality
• Merit based pay is the permanent year end cumulative Base salary increase based
on individual or in conjunction with organizational performance based on good
appraisal it is tied to the salary unlike variable pay]. If individual performance is
good and firm performance is good merit pay is full, if firm performance is
marginal individual is good then individual gets partially compensated and so on.
• Bonuses and investment into bonds that can be enchased, stock options
allocating shares of the company example Infosys, company slices up a piece of
its profit dividend and distributes it to the employees another is gainsharing
sharing benefits of reduced costs with employees to achieve productivity
incentives.

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Bonus and Spot Bonus
• Bonus is an Incentive payment that is supplemental to the base wage for cost
reduction, quality improvement, or other performance criteria.
• Spot bonus on the other hand is an unplanned bonus given for employee effort
unrelated to an established performance measure.

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HOW IS COMPENSATION ARRIVED AT?
• The tried and tested conventional objective method of determining compensation is
through job analysis. We have discussed this recurring term before.
• Job analysis focuses on the duties and responsibilities assigned to each job
• It does not focus on the characteristic features or credentials of the person occupying a
particular job or the quality or quantity of a person’s performance
• It has three components- The complexity of the work, the amount of responsibility, the level
of effort required in relation to other roles of the organization
• Find out, collect relevant information about the components of the job.
• Get readymade data bases that are industry and labour market if available that gives an
idea of the labour structure and prepare a questionnaire for each position see below to
assess the requirement of the job
• Arrange jobs in a hierarchical level using job evaluation results
• Analyze results and identify positions where the job evaluation plan that does not align with
the hierarchies or roles that you initially thought will go well with the job analysis
• Reconcile contradictions and biases and arrive at a reasonably accurate net worth of the
job.
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Job Evaluation
and • Job evaluation is a systematic way of
Compensation determining the value/worth of a job
in relation to other jobs in an
-Refer your text organisation.
book and class • Job analysis is a systematic way of
gathering information about a job.
room
discussion

36
 Principles of HRM
Principles of HRM: the 10 ‘C’ Model
Comprehensive
Includes all aspects of
people management
Communication
Credibility Objectives understood and
Staff trust top management accepted by all employees;
and believe in their strategies Open culture with no barriers

Change
Control Continuous improvement and Cost-effectiveness
Ensure Performance is Development Competitive, fair reward and
Consistent with business Commitment promotion systems
objectives
Employees motivated to Achieve
organizational goals

Competence
Organization competent to Creativity
Achieve its objectives development on Competitive advantage comes
individual competence From unique strategies
Coherence
HR management activities and
Initiatives form a meaning whole

Source : VSP RAO 37

Job Evaluation vs Performance Appraisal

Point Job Evaluation Performance Appraisal

Define Find the relative worth of a job. Find the worth of a job holder.
Aim Determine wage rates for different Determine incentives and rewards
jobs. for superior performance.
Shows How much a job is worth. How well an individual is doing an
assigned work.

Source : VSP RAO

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How is Job evaluation done-
• It tries to assess jobs, not people.
• The standards of job evaluation are relative, not absolute.
• The basic information on which job evaluations are made is
obtained from job analysis.
• Job evaluations are carried out by groups, not by individuals.
• Some degree of subjectivity is always present in job evaluation.
• Job evaluation does not fix pay scales, but merely provides a
basis for evaluating a rational wage structure

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THE STEPS ENTAILED IN JOB EVALUATION
RECALL CLASS DISCUSSIONS
➢Gaining acceptance
➢Creating job evaluation committee representing the relevant functional
domains.
➢Finding the jobs to be evaluated
➢Analyzing and preparing job description
➢Selecting the method of evaluation
➢Classifying jobs
➢Installing the programme
➢Reviewing periodically

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GUIDING PRINCIPLES OF JOB
EVALUATION
• Compensable factors should represent all of the major aspects of
job content.
• Operating managers should be convinced about the techniques
and programme of job evaluation.
• All the employees should be provided with complete information
about job evaluation techniques and programme.
• All groups and grades of employees should be covered by the job
evaluation programme.
• The overall acceptance and support to the programme should be
obtained by relevant stakeholders.

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What is Job Evaluation?
• Job evaluation is a process of
deciding the relative contribution of a
particular job to an organisation as a
whole and its worth{that is in terms of
the organisation} and externally in
terms of comparable jobs in other
organisations). it is about finding the
relative worth of a job to assign pay
to it.
• Job evaluation is different from job
analysis
• Job analysis is essentially the
compilation of information on what a
particular job is about. let us examine
this proposition further.

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JOB EVALUATION KEY
CHARACTERISTICS
• No job evaluation is possible without some form of job analysis in advance-gather
information about a job evaluate it and decide its worth
• Job analysis is not only used for subsequent job evaluation but also to compile job
descriptions (what a job entails), job performance standards)what is expected in a
particular job) and job specification-skills knowledge physical and psychological
attributes
• Job evaluation is about finding the relative worth of a job and assigning pay rates to it.
On entering a particular pay scale individuals may be assured of a particular pay scale
or a place in the assured pay scale. The individual may then gradually progress on the
scale.

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BENEFITS OF JOB EVALUATION

• It tries to link pay with the requirements of the job.

It offers a systematic procedure for determining the relative worth of jobs.

• An equitable wage structure is a natural outcome of job evaluation.

• Job evaluation, when conducted properly and with care, helps in the
evaluation of new jobs.

• It points out possibilities of more appropriate use of the plant’s labour force by
indicating jobs.
Tuesday, 15 December 2020 44
4 methods of job evaluation recall class
dicussion multimedia material and text book.
• Ranking Method,
• Classification Method,
• Factor comparison Method,
• Point Method.
• Hint- Recall class discussions and
multimedia material.

45
Therefore while working on a Compensation policy in any
modern organization- a cafeteria approach is followed.

• It should always be a mixed bundle.

• It is now linked with economic value added to the organization and the
group through performance to measure how much bonus an employee
deserves. They are periodic payments emanating out of the savings or
extra gains that an employee accrues
• Compensation always works when it is backed up by an array of non-
monetary or non-financial incentives, motivation need for recognition.
• Do a careful assessment of the above

46
WATCH ME unfailingly and refer chapter 11 of
your text book.
• https://www.youtube.com/watch?v=Ybhoe2A8u
ZE

• https://www.youtube.com/watch?v=YzihTLXwH
MY

• Hay method-
https://www.youtube.com/watch?v=vWiPIOMxX
qs

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Some Pitfalls of Performance Linked Pay

• The two methods either merit or variable pay methods suffer

from reduction into a narrow focus where the avoidance of
tasks whose goals cannot be set because accomplishments
cannot be measured properly.
• It sets up unwarranted pressure because people do not believe
that pay and performance are directly proportional.
• Individual pay plans may impede collective team goals.
• Supervisory ratings are not above suspicion
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 Competency Pay
• Competency-based pay implies that the company pays for the employee’s range,
depth, and types of skills and knowledge, rather than for the job title he or she
holds.
• There are three reasons why you should consider using competency-based pay.
➔First, in a high performance work system, employees to be enthusiastic about
learning and moving into other jobs.
➔Second, you can enhance strategic edge by paying for skills that are critical to those
plans.
➔Finally, measurable skills, knowledge, and competencies are at the heart of
performance management processes.

49
THREE TYPES OF COMPETENCIES
• Competencies are of three types
• Organizational unique idiosyncratic factors excellent design,
customer service that make an organization outperform.
• Job related which are specific and are required to carry out the
assigned job effectively and vary from job to job
• Personal competencies are behavioral competencies that are
needed for effective and successful conduct of a job. Self-initiative,
adaptability, taking risks etc

50
PRE-REQUISITES OF COMPETENCY BASED PAY
• It is people focused based on the alignment of the three features
• Periodic rigorous assessment demanding managerial time and effort
• Personal assessment program because it requires constant monitoring
of organizationally relevant skills that employees acquire through
training

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Team Based Performance Incentive
• Specific work standards set for work groups

• Members paid incentives if members exceed production standards

• Reward is for the whole team not for individual performance that undermines the
whole purpose of the incentive each person worries of their own performance.

52
 Some Demerits of Team Based Pay
• Not on the basis of individual performance
• Based on the assumption of autonomous work teams which may not
always be the case
• When firms cannot accurately measure the combination of individual
workers group based pay initiative may be more appropriate This means
rewarding employees according to output or profit sharing
• Free Rider problem

53
Goals, Reviews and Appraisal of Individual
Performance
The Performance Management Cycle
The Balanced Score Card

The balanced scorecard (BSC) is a strategic planning and

Management system that organizations use to:

 Communicate what they are trying to accomplish

 Align the day-to-day work that everyone is doing with strategy
 Prioritize projects, products, and services
 Measure and monitor progress towards strategic targets
The Balanced Score Card…

The system connects the dots between big picture strategy elements:
 Mission (Organisational purpose)
 Vision (what the Organisation aspires for)
 Core values (what the organization believes in)
 Strategic focus areas (themes, results, goals)
And the operational elements:
 Objectives (continuous improvement activities),
 Measures which track strategic performance (KPIs)
 Targets (our desired level of performance)
 Initiatives (projects, tactical action plans that help you reach your targets)
The Balanced Score Card
Performance Appraisal

Performance
Planning &
Goal-setting

Year End
Assessment Quarterly
& Review
Rating

Mid Year
Review
SMART Goals

 S - Specific
 M - Measurable
 A - Achievable
 R - Relevant
 T - Time bound
SMART Goals:
The Business Goals
 Acquire 45,000 new online customers this financial year
at an average cost per acquisition (CPA) of $30 with an
average profitability of $5
 Increase the reach of the business Facebook page from
35,000 likes to 100,000 likes by July 31 through ads,
events, and video
 Prepare for product launch by developing launch checklist of
activity, tasks, due-dates and drive approval by all
stakeholders by April 1
SMART Goals:
Professional Goals
 Present at two or more internal employee per quarter to improve
confidence and presenting skills. Improve industry knowledge by
attending 3+ industry events and provide a write-up to the rest of the
team on key learnings afterward
 Develop and practice my management skills by conducting weekly
1:1s with my direct reports, quarterly 1:1s with my indirect reports, and
quarterly all hands with my team resulting in 10% improvement in
employee engagement score at the end of the year
 Ensure that the 90% of the team has completed training on the new
inventory management software by the end of the quarter.
 Spend 2 days per month building my customer understanding by
shadowing teammates in operations and sales; deliver a write-up at
the end on key learnings to the rest of the team
 SMART Goals:
The Core Values
Level Integrity Team Player Learning Commitment Communication Safety

Demonstrates
Participates as a Transparency in
behaviors consistent Commitment and Adherence to
team member Receptive to new communication with
Worker with the
and fosters learning
dedication to
patients , family
safety
organization’s work practices
teamwork members & Colleagues
values

Transparency in
Commitment and Adherence to
Team Identifies ethical Receptive to new communication with
Fosters teamwork dedication to safety
Leader implications learning patients , family
work practices
members & colleagues

Encourage
Transparency in
Aligns team with the Demonstrates Manages the Anticipates and continuous
communication with
Manager organization's Leadership in process for adapts to client
patients , family
improvements
values and ethics teams change needs in the safety
members & colleagues
practices

Aligns change
Promotes the Capitalizes on Demonstrates
initiatives with Fosters a client - Communicates
Unit Head organization's teamwork
organizational focused culture complex messages
a culture of
values and ethics opportunities Safety
objectives

Exemplifies and
Builds bridges Considers the
demonstrates the Champions Communicates
Top Mgmt organization's
between different
change
strategic direction
strategically
NA
teams of client focus
values and ethics
Performance Review

 Giving and Receiving Feedback

 Final PA Rating – Behaviourally Anchored Rating Scales (BARS)
Giving and Receiving Feedback – Mid
Year Review
The mid-year review takes place in the form of a discussion between the supervisor and the
appraisee to:

 Ensure that the employee’s performance is on track with the established performance
standards and expectations.
 Identify problems so that they can be corrected early
 Give the supervisor a chance to praise the employee verbally or commend them in
writing.
 Point out accomplishments or problems that have not been resolved, which otherwise
might not have come to the supervisor’s attention.

Normally, the employee will not be rated for the performance The purpose of this is to merely
determine the progress of the employee and to give feedback on the performance and
course correct
Final Appraisal

The purpose of this annual exercise is to provide feedback and to evaluate and rate the
employee based on his/her performance, the following will be evaluated during the Annual
Performance Review discussion:

 The goals that were set during the initial goal planning phase, and how much the
employee has managed to achieve over the course of the year.
 Whether the performance of the employee exceeded, met or fell below expectations.
 The feedback received from the others who are directly affected by the employee’s
(appraisee’s) performance.
 The learning and skill development needed and received.

The appraisal/review document will be used for the next year’s goal planning process.
Behaviourally Anchored Rating System - BARS
Goals

Numerical
Points Significance Definition
Value
Performance is exceptional. The employee has
A 5 Outstanding performed at levels above expected consistently

Performance is at expected levels and has

B 4 Very Good achieved some results above assigned goals and
targets.

C 3 Good Performance is at expected levels and fully meets

requirements.

D 2 Average Performance is at a level that barely meets

requirements. Performance requires improvement
in certain areas.

Performance is less than the acceptable standard;

E 1 Poor
improvement required in many areas.
 Responsibilities of the individuals:
Employee (Appraisee)

Goal Planning Process:

▪ Have a thorough understanding of the work involved – the critical

functions, key tasks
▪ Understand what constitutes “successful performance” of the core job
objectives
▪ Understand how the results of his/ her position contribute to the goals
▪ Communicate what assistance in terms of information, resources, tools,
training and supervision is needed for the achievement of the goals
▪ Ensure complete understanding of the PACE review process and formats
Responsibilities of the individuals:
Employee (Appraisee)

Mid –Year Review:

 Take responsibility for own continuous performance improvement and
development
 Review the goals and behaviors that were discussed in the goal-setting meeting
at the beginning of the year
 Make plans and follow through to meet the requirements of accountabilities
and behaviors
 Try to follow through on suggestions for improvement and development of new
skills
 Talk to the supervisor about progress as well as any obstacles to improvement,
so that the supervisor can help remove the barriers to good performance
 If required, seek direction or a refresher discussion on goals and behaviors
 Ask questions and seek clarifications when required
Responsibilities of the individuals:
Employee (Appraisee)

Final Appraisal:
 Gather any documentation regarding performance – projects,
accomplishments or achievements
 Review the identified goals, measurement criteria along with notes taken during
mid-year performance discussion
 Write down questions to ask the supervisor
 Listen to feedback from the supervisor and ask questions to clarify information
 Offer suggestions and ideas for improving performance, if needed
 Identify areas for learning & development and obstacles to performance and
suggest solutions
 Aim to use the information gained in the performance review to build on
strengths and improve weak areas
Responsibilities of the individuals:
Supervisor (Appraiser)

Goal Setting Process:

 Explain to the appraisee the PACE review process& expectations from the system
 Have a thorough understanding of the work involved – the critical functions and key tasks
 Identify priority areas, among the core and job-specific goals that will be emphasized in
the evaluation
 Work with the appraisee to define job objectives and performance standards and ensure
understanding of the same
 Explain the behaviors that will be evaluated – explain what is expected from the appraisee
and why
 Communicate how the results of the appraisee’s work contribute to the unit’s goals
 Ask the appraisee what assistance in terms of information, resources, tools, training and
supervision is needed for the achievement of the goals
Responsibilities of the individuals:
Supervisor (Appraiser)

Mid-Year Review:
 Provide performance feedback to appraisees to recognize excellent
performance
 Provide feedback to correct performance/ behavior that does not meet
established expectations
 Solicit ideas and suggestions from the employee for improving work processes
 Work with the appraisee to identify barriers to success and strategies for
removing or minimizing the barriers
 Discuss appraisee’s learning and professional development needs
 Promptly communicate new opportunities and changes that affect the
appraisee’s work
 Identify observable actions that the appraisee should take so that the
suggestions are concrete and can be implemented
Responsibilities of the individuals:
Supervisor (Appraiser)

Final Appraisal:
 Collect relevant information on appraisee’s performance and review the
identified goals, measurement criteria along with notes taken during mid-
year performance discussion
 Provide specific feedback on the appraisee's performance, including
priority areas goaled
 Offer the appraisee an opportunity to share his/her self-evaluation
 Discuss learning and development needs of the appraisee
 Set goals for improvement and learning & development goals
 Answer appraisee questions regarding the performance review
Implementing the Bell Curve
Thank You

Questions and Discussions

Performance Appraisal
By Prof A V Raman
 Watch this
•https://www.youtube.com/
watch?v=hI1Xejz5YnU

77
How not to answer a performance
interview? As discussed
• https://www.youtube.com/watc
h?v=Xnw4SMCadis

78
Goal Setting: A Balance

Results Competency
Achieved Demonstration

79
 What is Performance Appraisal?
Pe r fo r m an c e A p p ra i s a l i s a s ys t e m at i c evalu at i o n o f p re s e n t p o t e n t i a l

c ap ab i l i t ie s o f p e rs o n n e l by t h e i r s up e r i o r o r by a s u p e r i o r ’s s up e r i o r o r

b y a p ro fe s s i o n a l f ro m o u t s i d e.

A s we h ave s e en Pe rformance A p prais al s e t s -

1 Work St a n dards

2 A s s ess es Wo rk Pe rformance

3 P rov i d e s Reg u l a r Fo c u s e d Fe e d b a ck t o a n E m p l oye e

4 P e r f o r m a n c e A p p r a i s a l i s b a s i s f o r p r o m o t i o n o r a p a y r a i s e.
80
 What is Performance Appraisal based upon?
• Perfor mance Appraisal is organized in accordance with and

aligned with the goals set by management and is the

mana gement by objectives.

• Perfor mance A ppr aisal is a two way str eet.

• One it comprises of perfor mance set up by managerial authority

• Two it comprises of perfor mance achieved or identification or

intimation of gaps achieved by an individual or g r oup.

• Perfor mance Appraisal and Compensation are inseparable

twins.
81
Would you want yourself or your colleague to be like this? The
worlds purportedly most haunted painting the anguished man.
Why does performance appraisal scare employees? Do they
dislike the process or are the assessors not doing a good enough
job? Do you want to be anguished forever?

82
 Typical Goal Setting: Best Practices
1.Establish clear expectations. Discuss expectations with
people manager or gather input from team members to
ensure desired state is defined.
2.Set goals in a way that success can be measured. This will
provide ability to check assumptions and celebrate
accomplishments.
3.Review goals on a quarterly basis and make adjustments,
as needed.
4.Solicit ongoing feedback and make course corrections,
when appropriate.
5.Track achievements throughout the year. Provide specific
examples of goal achievement or competency
demonstration.
83
 Overview
• Performance Management is a
dynamic ongoing process
involving feedback, coaching Goal Setting
&
and recognition. Development
• Effectively manage performance Planning

by acting with purpose to

enhance competence,
confidence and capability.
• Three key phases throughout
the year help maintain a focus Mid-Year
on building talent and driving
Year-End Review
Calibration
results through employee
contributions. 84
Determining employees goals and performance Standards
The SMART framework
• Managerial assessment:
• Attaining numerical goals
• Meeting quality and quantity criteria
• Mastering competencies
Managers’ goals are SMART:

85
Goal Setting: Types of Goals
Types of Goals
Quantifiable Job Stretch
New Initiative Team Based
Responsibility Opportunity

Review job Showcase growth in

Introduce a new Contribution to a
responsibilities and current role while
program, project or team project or
create measureable gaining imperative
process process
components skillsets

Leverage SMART Model

Specific Measureable Attainable Relevant Time Bound

Answers the Answers the Answers the

Answers the Answers the
questions who and question of question of
question how question when
want reasonable expected results

86
Where does Performance Appraisal cast its
spotlight on?

• Individual Task Outcomes

• Expected Behavioural Traits related and aligned with
the job at hand not just any behavioural trait.
• Interpersonal skills

87
Summarising the Performance Appraisal
Process Setting
performance
Evaluation
goals

Establishing
performance
criteria

Actual
Evaluation of
Employee
Performance

Post-
Evaluation
interview with
employee
88
An Example of PA-Evaluation Survey

89
The Primary Assessors who make
the 360 Performance Evaluation
possible
1. Immediate supervisor

2. Peer group

3. Colleagues

4. Possibly Committees of superiors,

5. Self and

6. Customers 90
 Any performance management process has an
inherent contradiction
1. Conflicting purposes – different parties may have different agendas –
most basic of all is referred to as the judge coach dilemma – the
same person who is coaching you and asking you to be open and
honest about weaknesses etc is also judging you – perhaps for
promotion or for a pay rise- this does not encourage openness
2. Role of the appraiser – are they competent, motivated, what are
their values, do they dislike the task, what are their own motives –
get ‘their people’ promoted? – Halo, horns, stereotyping
manipulating system to get rid of people doppleganger are they like
me? Often ill prepared, they talk too much give information based
on third party complaints rely on their gut feeling
3. Role of the appraisee – seeking promotion, increase in pay or better
job or wanting feedback for development and wanting someone to
talk to openly – may systems will separate development – might be a
mentor from appraisal 91
 Performance Appraisal characteristics
• Performance Appraisal is a systematic process

• It in accordance with a plan

• It is not a past oriented activity but looks into the

future.

• Performance Appraisal is not job evaluation or pertains

to only finding faults.

• Performance Appraisal may be either through a formally

systematised process or through informal means.
92
Performance Appraisal and Performance
Management run in tandem as discussed in
class
➢ Both performance appraisal and performance management function by
comparing “what should be” with “what is.” Managers use one or more of three
bases—goals, job dimensions, and employee abilities—to establish ahead of time
what the employees' end results “should be.”
➢ Employees need and expect to know ahead of time on what basis their managers
will appraise them. Without knowing what goalpost you want to measure
employees and the journey through which you wish to reach tehre Performance
Appraisal is useless.
➢ Employees appraised on whether they possess requisite level of each skill
required for their job routine are qualified to fill the position.
93
 Performance Management
• Performance management is a continuous ongoing process and
Performance appraisal is the result of the former.
• Performance management is the continuous process of:
Identifying
Measuring
Developing performance of individuals and teams
Aligning performance with the organization's goals

Recall difference between performance management and

performance appraisal and a good appraisal process is
impossible without a good performance management
process. 94
 Typical Objectives of any Performance
Appraisal process
• Relate Individual goals to Organizational Goals
• Enhance Objectivity in measuring performance
• Evaluate Current Performance and predict future Performance in the
job
• Foster increasing growth and competence in employees and enhance
further performance by indicating that the performance is good
• Strengthen the channels of communication between managers and
employees
• Determine transfer termination and retention
95
 Objectives of Performance Appraisal (Continued)
• Identify individual strengths and weaknesses of individual
employees through a systematic objective process and
document their performance carefully.
• Serve as a basis for decision making about the employees'
compensation and promotion.
• Pick and spot the poor performers and warn them and tell
them to shape up or go out(pink slip)
• Provide concrete feedback to employees and identify
potential for further development. 96
Implications of Performance Appraisal

• Compensation Decisions

• Promotion Decisions

• Consequences for Training and Development Programs

• Employee Feedback-→ Remedial Action/Mentoring/Further Observation/ Disciplining

process/

• Personnel Development

• Team work development and improvement in how employees and employers do

things better

• Ongoing Feedback Coaching and Developmental Support

97
 PERFORMANCE APPRAISAL A BLEND OF FINANCIAL AND
NON-FINANCIAL GOALS WHICH ARE CRITICAL FOR THE
REALISATION OF THE FORMER
• Assign financial and non-financial goals to each team’s activities by mapping and
aligning the chain of activities leading from the team’s activities up to the
company’s overall strategic goals and link them

• Inform all employees of their goals and what they are expected to deliver.

• Use dynamic analytics tools, IT-supported tools like scorecard software and
digital dashboards to continuously display KPI’s and Overall organizational and
departmental deliverable trackers, monitor, and assess each team’s and
employee’s performance which breakdown performance to the minutest bits and
mitigate uncertainty..

• Take pro-active corrective action on a continuous basis. 98

 Examples of the outcomes of PA
Employees are given titles such as
• Rising Star the Best Newcomer
• Honours Club Employee of the Year
• Trailblazer Employee of half a year
• Eureka-Best idea generation for the firm

99
 Performance Ratings
Provide a consistent basis for evaluating staff performance, regardless of level. It also
acts as a guideline to help people managers and employees identify opportunities for
growth and continuously improve performance.
Performance Performance Rating Definitions
Rating
Exceeds Consistently exceeds goals and expectations. Demonstrates superior performance and routinely performs at a
Expectations (EE) level above current responsibilities. Results have a substantial impact beyond individual role and team, impacting
the department, unit and/or University. Performance at this level occurs throughout the year. Consistently
demonstrates behaviors beyond competency expectations.
Above Consistently meets and frequently exceeds goals and expectations. Delivers results that are beyond the scope of
Expectations (AE) the current role and responsibilities. Produces results that involve extra, unique or innovative contributions and
solutions. Frequently demonstrates behaviors within and above competency expectations.

Meets Consistently meets goals and expectations and may exceed one or more expectations. Meets the expectations
Expectations for the role and for the team. Delivers important and valuable results throughout the year. Models behaviors
(ME)
within competency expectations.
Needs Meets expectations for some objective but has not met all performance objectives and behavioral expectations.
Improvement (NI) Acceptable performance in some areas but needs improvement in other areas. Performs basic position duties
and responsibilities, needs continued development in order to fully perform to expectations. A performance plan
is recommended.
Below Does not meet most goals or expectations. Did not achieve expected overall results during the past year.
Expectations (BE) Performance frequently fails to meet minimum requirements and expectations. Significant improvement required.
100
14
Immediate action is required to improve performance and/or behavior.
What goes into making a PA system effective?
• Commitment of top or senior management to performance appraisal
system

• Availability of clear written down job descriptions which comes only

after a rigorous process job analysis is undertaken.

• Facilitating employee participation in setting participation goals and

evaluation criteria.

• Method of performance appraisal used

• The nature of paperwork involved is linked with the method and is

efficient and not self-serving. 101
Conflicting aims
Organization Individual
Seeking the Seeking valid
development of performance
individuals through feedback for
coaching development

Seeking information
on which to base
reward and promotion Seeking rewards
decisions and promotion

= conflict

102
 PA Measurement an overview
Graphic Rating Scale Method
• Its the simplest and most popular performance appraisal
technique. First, a scale is used to list a number of traits and a
range of performance for each. Then the employee is rated by
identifying the score that best describes his/her performance
level for each trait.

• Managers must decide which job performance aspects to

measure. Such aspects include generic dimensions, actual job
duties, or behaviorally recognizable competencies.
103
 Confidential Report (CR)
❑ CR is a kind of evaluation practiced predominantly in government and public

sector organizations.

❑ The evaluation report is prepared by the immediate superiors, usually on the

basis of the continuous observation of employees over a period of time

❑ The CR follows a predetermined format for gathering data relating to employee’s

skills, knowledge, initiative, attitude, integrity, scope for improvement, aptitude,

and area of concern

104
 Graphical Rating Scale
• Graphical ratings can be designed to measure either outcomes or
behavior and are a handy and simple tool to ascertain performance..
• Common dimensions of performance include quality of output,
quantity of output, cooperation with others, and skill development.
For each performance dimension, the rater is asked to place the
employee in a specific rating category.
• Most scales have between three and seven rating categories, each
represented by a number.
For example, a scale with three categories
It may include a rating of 1 for unsatisfactory performance, 2 for
average performance, and 3 for outstanding performance.
105
 An effective Performance Appraisal Measurement is
typically a mix of group and individual assessments.
• Ranking Method-Ranking of an employee in a work group is done against
another employee and the relative position of each employee is expressed in his
relative rank.
• The Paired Comparison Method on the other hand entails ranking employees by
making a chart of all possible pairs of employees for each trait. The manager
then indicates which one is the better employee of the pair.
• Critical Incident Analysis
• Critical Incident Method – A supervisor keeps a record of uncommonly good
and/or undesirable examples of an employee’s work-related behavior. The
supervisor then reviews the record with the employee at predetermined times.
106
 Methods of PA simplest method Graphical
Rating Scale:
Please circle the number that you feel best describes this worker’s
performance for each work dimension.
Quality of work performed 1 2 3
Quantity of Work performed 1 2 3
Timeliness 1 2 3
Co-Operation with Others 1 2 3

107
108
 Narrative Rating
• Organizations that use narrative ratings ask supervisors or other raters to simply

provide a written description of performance.

• You have experienced such a rating if a professor has written a note evaluating a

paper you have turned in.

• A benefit of narrative ratings is that they can be tailored to describe specific,

and perhaps unique, aspects of performance.

• Such comments can also be very helpful for improving future performance but

suffer from individual bias, the raters may write it in a hurry and there is no way

to compare high and low employees in order to ascertain compensation.

109
 FORCED CHOICE METHOD
• The evaluator has to evaluate employees with a set of statements or
a list of traits
• The series may contain both favourable and unfavourable statements
• Each statement may carry weights or scores which may be unknown
to the evaluator
• The evaluator has to choose the most appropriate statement which
best represents the individual being evaluated.
• The evaluator will not know the scores of each statement
• The inbuilt mechanism compels the evaluator to assign negative and
positive traits in the employees.

110
 Management by Objectives devised by
Peter Drucker
• Management by Objectives (MBO) – The manager sets out specific measurable
goals with each employee and then periodically discusses the employee’s
progress toward them. The process consists of six steps:
1. setting organisational goals
2. setting departmental goals
3. Discuss and clarify
4. define expected outcomes
5. conduct performance reviews
6. provide feedback based on the pre-set objectives

111
 Behaviourally Anchored Rating Scale

• BARS method first delineates the main performance parameters of the job, for
example, interpersonal relationships. Then the tool utilises narrative information,
such as from a critical incidents file, and assigns quantified ranks to each expected
behavior. In this system, there is a specific narrative outlining what exemplifies a
“good” and “poor” behavior for each category.

• The main advantage of this type of system is that it focuses on the desired
behaviours that are important to complete a task or perform a specific job. This
method combines a graphic rating scale with a critical incidents system and gives a
good measurement of the activity while not at the goals..
112
BARS AND ALSO A RECAP OF EARLIER
METHODS

• https://www.youtube.com/watch?v=A0bXahf
E0j4

Next see the sample diagram which is small

part of a abridged version of a BARS report

• https://www.businesstopia.net/human-
resource/performance-appraisal-methods

113
 BARS SOME GUIDELINES
• Behaviorally Anchored Rating Scale (BARS) is a scale used to rate the performance of

employees. It is an appraisal mechanism that seeks to combine the benefits of narratives,

critical incidents and quantified ratings by anchoring a quantified scale with specific

narratives of performance ranging from good, satisfactory and poor performance.

• BARS is designed to bring the benefits of both quantitative and qualitative data to employee

appraisal process.

• It compares an individual’s performance against specific examples of behavior that are tied

to numerical ratings of 5 to 9.

• BARS is usually represented as a vertical rating graph.

114
 Other forms of Assessment
• Assessment Centers are where individuals from several
departments are brought together to spend two or three
days working together working on group assignments
mirroring the kind of assignments they would do if they
were promoted at an assessment center.
• Observers measure rank the performance of each
participant in order of merit. All candidates get a chance
to display their talents and since evaluators know
precisely what they are examining and the requirements of
the post the evaluation is quite fair to all candidates. This
is used for primarily for promoting candidates.115
 BARS SOME GUIDELINES (Cont.)
• These behavioral anchor points are collected using Critical Incident Techniques (CIT), which
are procedures used for documenting human behavior that are of significance in a particular
arena. For example:- A level five rating for a nurse may require her to show sympathy to
patients while a level eight rating may require her to show higher level of sympathy and this
is reflected in all their interactions with patients.

• Steps in BARS:

• •Write critical incidents (CIT): Ask Jobholders or supervisors to describe behavior (critical
incidents) that have a significant impact on the performance.

• • Develop performance dimensions: It involves grouping the behaviors in different dimension

sets, then define each dimension.

• • Recheck: It refers to verifying these groupings by a different group of jobholders and

supervisors.

• • Scale the critical incidents: This second group then rates how effective or ineffectively
these behaviors affect the performance on a scale.

• • Develop a final instrument: About 7-8 of these dimensions are chosen as behavioral
anchors.

• Source—http://www.mbaskool.com/business-concepts/human-resources-hr-terms/8392-
behaviorally-anchored-rating-scale-bars.html
116
117
Advantages of BARS
• Consistency: They are reliable as the appraisals remains
the same even when different raters rate them.
• Clear standards: The critical incidents clearly list the
behaviors upon which an employee is appraised.
• Accuracy: The incidents are described by jobholders and
supervisors, who know and do the job. This leads to
accuracy in the appraisal method. Thereby increasing the
reliability.
• Independent dimensions: Clustering different behaviors into
7-8 dimensions help to make the performance dimension
more independent of one another.
• Feedback: The clear listing of critical incidents, based on
which an employee is appraised, makes it 118easier to explain
 Balanced Score Card
• The Balanced score card emerged from the works of Robert S. Kaplan
and David P. Norton through a series of articles in the Harvard
Business Review as well as their popular 1996 book by the same
name, The Balanced Scorecard is a strategic planning and reporting
methodology.
• It considers company’s objectives and splits them between 4 equally
important perspectives: Financial, Customer, Operational, People.
Organisational objectives then cascade down those four perspectives,
giving the company a clear path of implementation.
• Following the above strategy map, the financial perspective is at the
top and contains objectives that contribute to the bottom line. Next,
the customer perspective supports those goals with objectives that
lead to meeting customer needs which drive increased sales.
Operational goals are needed in place to better meet the customer
needs, and finally the people perspective contains the objectives that
support the operational goals. 119
Balanced Score Card

120
 Field Review Method
 In this method, the evaluation of an employee is done by someone
other than his own superiors.
 Normally, the evaluation is done by the HR people, who scrutinize
the records of those employees who are being evaluated and
conduct interviews with them and their superiors.
 This method facilitates an inter-person comparison of the
managerial personnel in different places.
 The assessor goes to the field and assists employees with the
ratings of their subordinates.
 The HR specialist requests specific information about employee
performance. Based on the report the specialist prepares a report
which is sent back to the supervisor for scrutiny and any
amendments, discussion with the employee who is being rated. The
ratings are codified in standardized forms.
121
Organizational Performance Development Process
Recapitulated

122
 Guiding principles to conduct the interview?
• Askthe right questions: open, probing, follow
up and reflective
• Engagein active, careful listening to all forms
of communication
• Provide
feedback based on evidence and
examples
• Avoid:
a focus on failure, control by the
appraiser, ends with disagreement
123
 Preparing for the appraisal interview
• Preparation
◦ Both parties need to prepare
◦ Appraiser:What style to adopt? gather the evidence
from all parties
◦ Appraisee: self assessment
• Structure
◦ Purpose and rapport – agree purpose and structure
◦ Factual review – of the known facts

124
Conducting the interview
◦ Appraisee views – comments on the last time
period (gone well/what could be
improved/likes and dislikes)

◦ Appraiser
views - asks questions, offers views
and comments

◦ Problemsolving – how can any differences be

resolved?
125
 The outcome of the interview
• Appraisees do most of the talking
• Appraisers listen actively and provide feedback
• Scope for reflection and analysis – an exchange of views
• Performance is analysed not personalities
• Whole period is reviewed not just isolated incidents –
evidence based
• Achievement is recognised and reinforced
• Identify areas for improvement – set agree objectives
• Ends positively with agreed action plans to improve
performance

126
 Types of interaction
Enquiry Exposition

Selection Presentation
Attitude survey Lecture
Health screening Briefing

Joint problem solving Conflict resolution

Appraisal Negotiation
Counselling Arbitration
Discipline 127
The typical framework that a performance appraisal
interview takes
• Tell and sell: appraiser acts as a judge – tells the appraisee
the result and how to improve appropriate for junior or
inexperienced staff who need guidance and are willing to
accept this – dangers – will not listen – disagree – leads to
argument and disaffection – assumes limited ability to
reflect
• Tell and listen: communications outcomes and listens to
reactions – better chance of commitment – may be used
cynically – used for more reflective people – better for open
ended jobs where
• Problem solving: appraisee encouraged to discuss problem
areas and consider solutions – better chance of commitment
to the problem and the solution, takes time, requires ability
128
 The Performance Appraisal Interview Some guidelines
• Before, the review study the person’s job description, compare performance to the
standards, and review the previous appraisals. Give the employee at least a week’s notice to
review his or her work. Set a time for the interview. Interviews with lower level personnel
like clerical workers should take less than an hour. Interviews with management employees
often take 1 or 2 hours. Conduct the interview privately with no interruptions.
• Do not judge or thrust your opinion. Allow the employee to speak what she or he feels listen
but do not react.
• Recognize that defensive behavior is normal. Never attack or belittle a person’s defenses;
they are legitimate to him or her. Defer action as appropriate and recognize your own
limitations. Break any bad news gently.
• When required, criticize in a private and constructive manner that lets the person maintain
his/her dignity and sense of worth.
• Written warnings should identify the standards by which the employee is judged, make it
clear that the employee was aware and informed of the standard. Point out the violation of
the standard, and show that the employee had an opportunity to correct the behavior. You
may place this in his or her permanent personnel file. If circumstances warrant, you may
remove the warning after a specified amount of time, say 90 days or longer.
• Be realistic and honest when giving an appraisal. It is important that a manager be blunt
when a subordinate is underperforming. Focus on specifics and allow opportunities to
improve.
129
 Some reflections on those who are more
interested
https://www.youtube.com/watch?v=Ib2
vAv4mU1c

130
 The Challenges in Performance Management

• Creating a culture of excellence that motivates employees at all

levels. Not creating a punishment centered apparatus that invokes
fear
• Match organizational objectives with individual aspirations.
• Equipping managers with requisite skills to discharge their duties
well.
• Providing Clear growth paths for talented employees.
• Provide new challenges to rejuvenate flattening corners.
• Empower employees to take decisions without fear of failing.
• Encourage teamwork and team spirit and open communication.
131
 Flaws that can creep into PA measurement
1. If standards are unclear, ambiguous traits and degrees of merit can result in an unfair
appraisal.
2. The influence of a rater’s general impression on ratings of specific qualities is known as the
halo effect.
3. Central tendency occurs when supervisors stick to the middle of the rating scales, thus
rating everyone average like an examiner trying to push people up and not taking difficult
decision.
4. Leniency or strictness occurs if supervisors have a tendency to rate everyone either high or
low. Effects involve letting what the employee has done recently blind the manager to the
employee’s performance over the entire year.
5. A poor first impression may disproportionality influence the rater’s behavior. Similarly a poor
perception of one trait of an employee may spill over to all attributes that seek to be
evaluated. Bias is a tendency to allow individual differences such as age, race, and sex
affect employee appraisal ratings.
6. Refer to accompanying article.

132
 FEEDBACK IN PERFORMANCE APPRAISAL

• https://www.youtube.com/watch?v=QUBlho9SQlU

133