Appraising and Managing

Performance
Performance Appraisal
 Bees and the Bee keepers
1. No of flowers visited
1. Counting the flowers being visited
2. Mid season review
3. Special awards to those bees who visited max flowers
4. Never told – goal was to increase honey
2. Increased honey production
1. Amount of nectar to be measured
2. Amount of hive produced in total
3. Awards for most gathered; and hive incentive prog
• How was the concert or play or the film you
recently watched?
 Performance
• Performance is about factors such as
– culture,
– mission,
– work-flow,
– goals,
– environment,
– knowledge, and
– skills all working together to produce something that is valuable
to the consumer.
So performance, regardless of the organization that
produces the performance (be it a baseball team,
software company, an entertainment program, girl scout
troop, or law firm), is about outputs or results.
 Performance Appraisal
• Is an objective assessment of an individual’s
performance against well defined benchmarks
• Also called as
– Performance rating
– Employee Assessment
– Employee performance review
– Personnel appraisal
– Performance evaluation
– Employee evaluation
– Merit rating
 Definition of Performance Management
System
• A strategic and integrated approach to
delivering sustained success to organizations
by improving performance of the people who
work in them and by developing the
capabilities of teams and individual
contributors –
Armstrong and Baron
 Purpose of Performance appraisal
• Promotions based on competence and
performance
• Confirm probationary employees
• Assess training needs
• Let employees know their status quo
• Improve communication
• To check if the HR programs are effective
 Broadly it serves…
• Developmental uses
• Administrative uses/ decisions
• Organisational maintenance/ objectives
• Documentation
 Performance appraisal and competitive
advantage
• Improving performance
• Making correct decisions
• Ensuring legal compliance
• Minimizing job dissatisfaction and turnover
• Consistency between organisational strategy
and behavior
Performance Management & Employee Development
System
Performance & Employee Development - Planning
1.Establishing Performance Objectives
– Performance objectives describe the major
accomplishments that an employee expects to achieve
during the next calendar year.
– It should reflect and align with the organization’s
objectives, the business unit’s objectives and the
supervisor’s objectives.
– At the beginning of the year the Supervisor and
employee will review the organizational objectives
related to the business plan and the employee’s job
description.
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 Establishing Performance Objectives

Guidelines contd..
– Identify key competencies that significantly impact
upon your ability to meet your performance
objectives
– Identify at least 3 developmental objectives related
to one or more core competencies.
– Review your performance and development plan
with your supervisor to obtain mutual agreement,
and then begin to implement your plan.
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 2. Conducting Periodic Progress Reviews
Supervisor’s Responsibility.
• Both Supervisor and employee should
monitor performance results
• Discuss results to date
• Problem solving
• Provide ongoing coaching to improve
performance
• Update Performance Objectives as necessary

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 3. Evaluating Performance – Supervisor’s
Responsibility

• Determine the Overall Performance Rating for

the year based on employee’s Results as against
his/her Performance Objectives, Developmental
Progress, and demonstrated Competencies.
• Complete the Annual Performance Appraisal
Form and review with Next Level Management,
if appropriate .

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4. Writing Career Interest and Development Plans –
Employee’s Responsibility
– Employee indicates his career aspirations both
in the short term (2-3 years) and longer term.
– Employee indicates his development plan that
is aligned with his performance objectives.
– Supervisor reviews and finalizes development
plan with employee.
– Supervisor provides on-going coaching and
feedback to encourage employee achieve
his/her development objectives.
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 5. Conducting the Performance Appraisal and
Development Discussion.
• Supervisor and employee meets to discuss the
employee’s Results, Overall Performance Rating,
Developmental Progress, and demonstration of
Competencies.
• Supervisor and employee jointly complete
Development Plan and discuss Development
Forecast
• Employee given copy of completed appraisal
summary form , Manager retains a copy and a
copy put on employee’s personal file at HR.
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 6 - Career Interest and Potential Discussion.

• Supervisor provides candid feedback on

employee likelihood of achieving career
objectives in the organization.
• Supervisor makes available resources to help
employee “manage own career” and
encourages their use.

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 The different steps in the PM and ED system
1. Establishing Performance Objectives
2. Conducting Periodic Progress Reviews
(Supervisor’s Responsibility)
3. Evaluating Performance (Supervisor’s Responsibility)
4. Writing Career Interest and Development Plans
(Employee’s Responsibility)
5. Conducting the Performance Appraisal and Development
Discussion.
6. Career Interest and Potential Discussion.

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 Who will rate?
• Immediate supervisor
• Subordinates
• Clients
• Rating committees
• Self
• 360 deg appraisal
 Problems in rating
• Leniency/ Severity
• Central Tendency (playing safe)
• Halo error
• Rater effect (stereotyping, bias)
• Primacy and Recency effects
• Performance Dimension order
• Spillover effect (biased by past ratings)
• Status effect
 What should be rated?
• Evaluation criteria – how will you evaluate a waiter’s
service for you in a restaurant?
1. Quality
2. Quantity
3. Timeliness
4. Cost effectiveness
5. Need for supervision
6. Interpersonal impact
7. Community service
 Methods of appraisal
• Past oriented methods
– Rating scales
– Checklist
– Forced choice method
– Forced distribution method
– Critical incidents method
– BARS – Behaviorally anchored Rating scales – the scale
represents a range of descriptive statements of behavior
varying from the least to the most effective
• Future oriented methods
 Past oriented method (contd..)
• Field review method – from a third party
– Performance test and observation
– Confidential records (attendance, self expression,
ability to work with others, leadership, initiative, job
knowledge, ability to reason, originality and
resourcefulness, responsibility etc.. upto 14 points)
– Essay method
– Cost accounting method
– Comparative evaluation approach
• Ranking approach
• Paired comparison approach
 Future oriented methods
• MBO
• Psychological appraisals (future potential based)
• Assessment centers
– Center location where managers come together
– Participate in job related exercise
– Evaluated by trainers
– Used in executive hiring and in evaluating executives
• 360 degree feedback
 Cons of appraisals
• HR dept introduces all-pleasing systems
• When new methods emerge, often they are
perceived wrong and results in arguments and
offensive
• Procrastination of implementation
• Personal benefits
• Unsuccessful feedback interviews when there is
negative feedback
• Ultimately HR staff finds itself policing,
refereeing and collecting unwanted info.
 Clash between Appraisals and Emerging
Thinking
Emerging Thinking
•Empower people
•Collaborative teams
•Unleash intrinsic motivation
•Respect diversity
•Emerging structures
•Just in Time
•Improve Processes
•Improve Whole Systems
Appraisals
•Forced Process
•Individual Accountability
•Motivate with Incentives
•One size fits all
•Controlling Structures
•Annual event approach
•Rely on inspection/ MBO
•Improve the parts
 Cons of appraisals
• Employees want to be responsible
• Improvement:
– Individual – System and Process – Organizational
– The middle process is left out
• Honest dialogue and feedback is needed
• Not with money on the table
• Create a climate that entrusts Faith over Fear
 Fears and Concerns -
Appraiser concerns
• Clarity about the system
• Lack of skill (dealing with delicate issues; may require skill
development training)
• Lack of control (after signing forms)
• Low confidence in the system
• Concern for acceptance (especially with unpleasant
surprises)
• Concern for defending an appraisal (especially when
appraisee chooses to challenge)
 Fears and Concerns -
Appraisee concerns

• Unclear regarding appraising considerations

• Unpredictability of appraisal
• Ambiguity around standards
• Effect on future career
 Effective appraisal interview
• Select a Good time
• Minimise interruptions
• Welcome, set at ease
• Ask open ended qns to encourage discussions
• Listen
• Manage eye contact and body language
• Be specific
• Rate behavior and not personality
• Layout development plan
• Encourage subordinate participation
• Set mutually agreeable goals
• End in positive encouraging note
• Set time for follow up meetings
 Use of appraisal data
• Remuneration administration
• Validation of selection programmes
• Employee training and development
programmes
• Promotion, transfer and lay off decisions
• Grievance and discipline programmes
• HR planning
 Read…
• Challenges of Appraisal
• Legal Issues associated with performance
appraisal