CHAPTER 8: MANAGEMENT OF PERFORMANCE APPRAISAL SYSTEM

Performance Appraisal
 The term “performance appraisal” refers to the regular review of an
employee’s job performance and overall contribution to a company. Also
known as an annual review, employee appraisal, performance review or
evaluation, a performance appraisal evaluates an employee’s skills,
achievements, and growth, or lack thereof.
 Performance appraisal is one of the major keys to effective management.
It is basis for determining who should be promoted to a higher position.
Performance appraisal is a process of evaluating an individual in order to
arrive at an objective human resource decision. It is also important for
management development because if an employee's strengths and
weaknesses are not established, it is quite difficult to determine whether
development efforts of the organization are aimed at the right direction.
Appraisal - is truly an integral part of the total system or management.
Performance appraisal systems
 provide a means of systematically evaluating employee across various
performance dimensions to ensure that organizations are getting what
they pay for. They provide valuable feedback to employees and
managers, and they assist in identifying promotable people as well as
problems.

THE PURPOSES OF PERFORMANCE APPRAISAL

1. Strategic Purpose- The performance management system should link employee
activities with the organizations goals and objectives. To achieve this strategic purpose,
the system must be flexible because, when goals and strategies change the results,
behaviors and employee characteristics usually need to change correspondingly.
2. Administrative Purpose- The purpose of the evaluation and appraisal program is
usually hampered by the human element of compassion.
3. Developmental purpose- The third purpose of performance management is to
develop employees to become effective in their jobs.

THE CRITERIA IN THE DEVELOPMENT OF A MEASURING INSTRUMENT

1. Validity- Often it is referred to as content validity. It refers to the accuracy of the
ratings in differentiating each employee in a group in terms of actual job performance.
Extent to which the performance measure assesses all the relevant- and only the
relevant- aspects of job performance.
2. Reliability- rating may be considered reliable if they are consistent. It refers to the
consistency of the performance measure.
3. Acceptability- refers to whether the people who use the performance measure
accept it. Acceptability is affected by the extent to which employees believe the
performance management system is fair.
4. Specificity- Extent to which a performance measure gives specific guidance to
employees about what is expected of them and how they can meet these expectations.
Specificity is relevant to both the strategic and developmental purposes of performance
management.

DEVELOPING AND ADMINISTERING AN APPRAISAL PLAN

There are certain guidelines in developing and understanding an appraisal plan using
the following steps:

1. Secure full agreement of line managers about the need for a formal performance
appraisal plan and for the purpose in which it will be used. A choice has to be made
among several types of appraisal plans.
2. Secure plans of their companies and existing literature on the subject to develop a
plan best suited for the needs of the particular organization. The HRD should study all
other plans and make a careful analysis as to their suitability into the organization.
Complicated plans should be avoided.
3. Enlist the cooperation of the supervisor in drawing up the appraisal plan. Discuss the
factors to be used and the uniform descriptions or instructions to be followed.
4. Make sure that the purposes and nature of the performance appraisal plan are
explained to those who will make the appraisal. These are the first level supervisors and
department heads and those who will be affected by the appraisal.
5. Provide training to those who will use the instruments. Training will provide enough
knowledge on how the rating scale will be used to avoid biases and provide uniform
appraisal of the employees.
6. Develop and achieve line and staff coordination. There should exist a mutual
checking of employees' performance appraisal in order to be consistent and to provide
uniform within and between departments.
7. Arrange for periodic discussion of the performance appraisal. Supervisors and their
subordinates should discuss the good points, the difficulties and the lapses in the
performance appraisal. Supervisors should encourage better performance.
8. The appraisal system should be carefully used in selecting employees for possible
promotions.
9. Provide for challenges and review of performance e appraisal. The grievance
procedure should be put in place if the employee is not satisfied with the rating given to
him. In case there is a company union, the union representative should be entitled to
challenge personnel decisions.

Questionnaire: Chapter 8
1. Define Performance Appraisal
2. It presents an opportunity for the manager to talk about the employee’s potential
and also their weaknesses.
3. Give the (3) Feedback as a system
4. It is truly an integral part of the total system or management.
5. Enumerate the (3) Purposes of Performance Appraisal.
Answers:
1. The term “performance appraisal” refers to the regular review of an employee’s
job performance and overall contribution to a company. Also known as an annual
review, employee appraisal, performance review or evaluation, a performance
appraisal evaluates an employee’s skills, achievements, and growth, or lack
thereof.
Performance appraisal is one of the major keys to effective management. It is
basis for determining who should be promoted to a higher position. Performance
appraisal is a process of evaluating an individual in order to arrive at an objective
human resource decision.
2. The Appraisal Interview
3. Data, Evaluation, Action
4. Appraisal
5. Strategic Purpose, Administrative Purpose, Development Purpose
RUBIA, ANGELITA T.
BSBA FM-1A
al