SUBMITTED BY

Rashi Seth
Shweta Kumar
Sakshi Bansal
Surbhi Agrawal
Swati Dalal
Snehlata
Soni Agrawal
Vanita Kumari
 MEANING

According to Heyel,
“It is the process of evaluating the performance
and qualifications of the employees in terms of the
requirements of the job for which he is employed, for
purposes of administration including placement,
selection for promotions, providing financial rewards
and other actions which require differential treatment
among the members of a group as distinguished from
actions affecting all members equally.”
 IMPORTANCE AND
PURPOSES

Performance appraisal has been considered as a

most significant and indispensable tool for an
organisation, for the information it provides is
highly useful in making decisions regarding
various personal aspects such as promotions
and merit increases.
McGregor says : “Formal performance appraisal
plans are designed to meet three needs, one of
the organisation and other two of the
individual,namely:
i. They provide systematic judgements to back
up salary increases, transfers, demotions or
terminations.
ii. They are means of telling a subordinate how
he is doing, and suggesting needed changes in
his behaviour attitudes, skills, or job
knowledge.
iii. They are used as a base for coaching and
counselling the individual by the superior.
OBJECTIVES
On the basis of merit rating or appraisal
procedures of various companies in India,
main objectives of employee performance
appraisal are:

i. To enable an organisation to maintain an

inventory of the number and quality of all
managers and to identify and meet their
training needs and aspirations;

ii. To determine increment rewards, & provide a

reliable index for promotions & transfers to
positions of greater responsibility;

iii. To maintain individual and group

development by informing the employee of his
performance standard;
iv. To suggest ways of improving the employee’s
performance when he is not found to be up to
the mark during the review period.

v. To identify training and development needs

and to evaluate effectiveness of training and
development programs;

vi. To plan career development, human

resources planning based on potentialities.
 SS
CE
R O
P
 ESTABLISH PERFORMANCE STANDARDS

COMMUNICATE PERFORMANCE EXPECTATIONS TO EMPLOYEES

MEASURE ACTUAL PERFORMANCE

COMPARE ACTUAL PERFORMANCE WITH THE STANDARDS

DISCUSS THE APPRAISAL WITH THE EMPLOYEE

IF NECESSARY, INITIATE CORRECTIVE ACTION

 Straight ranking method
In this method the “whole man” is compared with the
“whole man” i.e. the ranking of a man in a work
group is done against that of another . the relative
position of a man is tested in terms of his numerical
rank.
ADVANTAGE:
simple and easy to develop and use.
DISADVANTAGE:
difficult to compare a single individual with human
beings having varying behaviour traits.
This method tells how a man stands in relation to
others but does not indicate how much better or worse
he is than others.
 Paired comparison method
Each employee is compared every
trait with all the other persons one at
a time.judgement is easier and
simpler than the ordinary ranking
method.
EXAMPLE:
As A B C D E
compared to

A - - - -

B + - + +

C + + - +

D + - + -

E + - - +

For the trait “creativity”

 Graphical rating method
It was introduced by Walter .D.Scott.
Under this person is given ranking
(excellent,goodetc)on the basis of
qualities like
dependability,attendance,cooperation
etc.
 Graphic Rating Scale
• Continuous Rating Scale
• Discontinuous Rating Scale

Employee name_________ Deptt_______

Rater’s name ___________ Date________
------------------------------------------------------------------------
Exc. Good Acceptable FairPoor
5 4 3 2 1 _
Dependability
Initiative
Overall output
Attendance
Attitude
Cooperation
Total score Continuous Rating Scale
 Indifferent Enthusiastic

Attitude

No Interested Very
Interest enthusiastic

Discontinuous Rating Scale

 Checklist method
In this method a series of questions are prepared
considering an employee to his behaviour.The rater
indicate if the answer to a question is positive or
negative.
1.Is the employee really interested in his job? y/n
2.Is employee regular?Y/N
3.Is employee helpful?Y/N
4.Does he shows uniform behaviour to all?Y/N
5.Does he follow instruction?Y/N
6.Is he respected by his subordinates?Y/N
7.Does he ever make mistakes?Y/N
8.Is the equipment maintained in order?Y/N
 Man –to- man comparison
method
This technique was used by USA army during
the 1st world war.
Instead of cpmparing a “whole man” to
“whole man” person are compared to the
key man in respect of one factor at a time.
DISADVANTAGE: designing of scale is a
complicated task.
 Forced choice method
A rater is given a series of statements about an
employee . Rater indicates which statement is
most or least descriptive of the employee.
EXAMPLES OF TYPICAL STATEMENTS
1.Learns fast------------------works hard
2.Work is reliable---------performance is good
example
3.Absents often--------------others usually tardy
It is called forced choice because rater is forced
to select statement which are readymade
 Group appraisal method
Employee are rated by an appraisal
group consisting of their supervisor
and 3 or 4 other supervisor who have
some knowledge of their
performance.
Advantage :it is devoid of any bias as
it involves multiple judges
Disadvantage :time consuming
 Critical Incident method
The essence of this system is that it attempts
to measure workers performance in terms of
certain events that occur in the performance
of the rates job.

Ex: A fire, sudden breakdown, accident

Workers reaction scale

A informed the supervisor immediately 5

B Become anxious on loss of output 4
C tried to repair the machine 3
D Complained for poor maintenance 2
E was happy to forced test 1
 Field review method
The field review method is an appraisal by someone
outside the assessee’s own dept. ,usually from
corporate office or HR dept. The method is basically
used for promotional decisions at the managerial
level.
Disadvantages :
•An outsider is usually not familier with conditions in
an employees work environment.
•An outsider doesn’t have the opportunity to
observe employee behaviour for a long period of
time but is only structured for a short duration in an
interview
 De merits of traditional
•
techniques
Some managers discourage good performance by
over emphasising shortcoming and all most neglecting
good work.
•Some raters are over harsh in temperament and give
low rating to all subordinates. Others are too lenient
and give everyone good rating, some play favourites
and some are victims of hallo effects.
•Some managers are not even properly trained to
conduct evaluation and performance interviews.
MODERN METHODS OF APPRAISAL
AND CAREER DEVELOPMENT
As we have seen, most traditional methods emphasise either on the task or the worker’s personality, while making
an appraisal. In order to bring about a balance between these two, modern methods have been developed. Of
such methods, the most important are:


Appraisal by Results or Management by Objectives

Assesment Center Method.

Human asset Accounting Method

Behaviourally Anchored Rating Scales.
 APPRAISAL BY RESULTS OR
MANAGEMENT BY OBJECTIVES
This method has been evolved by Peter Drucker.
MBO is potentially a powerful philosophy of
managing and an effective way for operationalising
the evaluation process. It seeks to minimise external
controls and maximise internal motivation through
joint goal setting between the manager and the
subordinate and increasing the subordinate’s own
control of his work.
 OBJECTIVES OF MBO:
• MBO has an objective in itself. The objective is to
change behavior and attitudes towards getting the
job done.
• In other words ,it is results oriented; it is
performance that counts. It is management system
and philosophy that stress goals rather than methods.
• It provides responsibility and accountability and
recognises that employees have needs for
achievement and self fulfillment.It meets these needs
by providing opportunities for participation in goal
setting process. Subordinates become involved in
planning their own careers.
MBO PROCESS:
SET
ORGANISATION
JOINT GOAL
GOALS SETTING

PERFORMA SET CHECK

NCE REVIEW POST
 BENEFITS OF MBO PROGRAMME

1. MBO helps and increases employee motivation because it relates

overall goals to the individual’s goals;and helps to increase an
employee’s understanding of where the organisation is and
where it is heading.
2. Managers are more likely to compete with themselves than with
other managers .
3. MBO results in a “means ends “ chain.
4. MBO reduces role conflict and ambiguity.
5. MBO provides more objective appraisal criteria.
6. MBO forces and aids in planning
7. MBO identifies problems better and early.
8. MBO identifies performance deficiencies and enables the
management.
9. MBO helps the individual manager to develop personal
leadership.
 DRAWBACKS OF MBO
• It takes a great deal of time ,energy and form
• There is sometimes a “tug of war”
• Ambiguity of goals
 ASSESSMENT CENTRE METHOD
The assessment centre concept was initially applied to millitary
situations by simoniet in the German Army in the 1930s.the
purpose of this method was and is to test candidates in a social
situation,using a number of assessors and a variety of procedures.

Some other features of this system are:

1. The use of situational exercise (such as in basket exercise ,business
game ,a role-playing incident and leadership group discussion );
2. Evaluators are drawn from experienced mangers with proven ability at
different levels of management;
3. They evaluate all employees ,both individually and collectively ,and each
candidate is given one of the three categories:more than acceptable ,less
than acceptable and unacceptable;
4. A summary report is prepared by the members, and a
feedback on a face-to-face basis is administration to all the
candidates who ask for it.

Purpose of assessment centres:

1.To measure potential for first level supervision ,
2. To determine individual training and development needs of
employees.
3. To select recent college students for entry level positions.
4. To provide more accurate human resource planning
information.
5. To make an early determination of potential.
6. To assist in implementing affirmative action goals.
procedures

• A leadershipgroup is established
• A task force is used with an appointed leader,
who decides on a course of action.
• Management games are played to test
organisational and planning abilities.
 PROBLEMS

• The assessment centre approach, therefore, suffers

from many real hazards. One of the most obvious is
exam taking …
• Another drawback is the potential bad effects on
those not selected to participate in the exercise….
 360 DEGREE PERFORMANCE APPRAISAL

• In this appraisers are supervisors, peers

,subordinates employees themselves users of
service and consultance.
• Performance appraisal by all these parties is
called 360 degree appraisal.
HUMAN ASSET ACCOUNTING METHOD

• Attaching money estimates to the values of

firms internal human organisation and it’s
external customer goodwill.
• If there is distrust and conflict human
organisation is devalued .
• If there is teamwork and high morale then
human organisation becomes valuable asset
for the company.
 BEHAVIOURALLY ANCHORED RATING
SCALES(BARS)
• Generate critical incidents
• Develop performance dimension
• Reallocate incidents
• Scale of incidents
• Develop final instruments
 COMPONENTS OF APPRAISAL
EVALUATION
It is necessary to begin by stating very clearly the
objective of the evaluation program. Having done this,
the personnel evaluation system should address the
question “Who, What, When, Where,How?” of
performance appraisal.

“WHO” of the appraisal?

As Ruderman observes, “the appraisal can be
accomplished by one or more individuals involving a
combination of immediate superior , other managers
acquainted with the assessee’s work. A higher level
manager, a personnel manager, the assessee’s peers, the
assessee himself and the assessee’s subordinate.”
Appraisal is also done by the staff specialist i.e., the
personnel officers.
They may advise the supervisors while evaluating their
subordinates strssing the need of evidences for making
specific appraisal judgements.
Sometimes self evaluation is also employed for evaluating
performance. Self rating emphasises human relations, which
supervises focus on technical knowledge and initiative.
In many companies subordinates and superiors jointly establish
goals and periodically eveluate the subordinate’s performance with
respect to these goals.

“WHAT” of appraisal?
The “what” of the performance appraisal consisits in appraising non-
supervisory employees for their current performance and managers for future
potential.
“WHY” of appraisal?
The “why” of the appraisal is concerned with :
Creating and maintaining a satisfactory level of performance of employees in
their present jobs.
Highlighting employee needs and oppourtunities for personal growth and
development.
Aiding in decision-making for promotions, transfers, lay-offs and discharges.
Promoting understanding between the supervisor and his subordinates.
Providing a useful criterion for determining the validity of selection and
training methods and techniques and forming concrete measures for
attracting individual of higher caliber to the enterprise.
“WHEN” of the appraisal
The “when” answers the query about the frequency of appraisal. It
has been suggested informal counselling should occur
continuosly.
The manager should discuss on employee’s work as soon as
possible after he has judged.
He should use good work as an opportuinity to provide positive
reinforcement and use poor work as a basis for training

“WHERE” of the appraisal

The where indicates the location where an employee
may be evaluated. It is usually done at place of work or
office of the supervisor.informal appraisal may take
anywhere and everywhere both on the job in work
situations and off the job.
“HOW” of the appraisal
Under how the company must decide what different
methods are available and which of these may be
used for performance appraisal. On the basis of the
comparitive advantages and disadvantages, it is
decided which method would suit the method best.
FACTORS DETERRING OBJECTIVE
EVALUATION OR PERFORMANCE OF
APPRAISAL

The ideal approch to performance evaluation is that in which

the evaluator is free from personal baises, prejudices, and
idiosyncrasies.inequities in evaluation often distroy the
usefulness of the performance system.
There are many significant factor which deter objective
evaluation these factors are:

THE HALO EFFECT:

It is a “tendency to let the assessment of an individual one
trait influence the evaluation of that person on other specific
traits.halo effect allow one characterstics observations or
occurance(either good or bad) to influence the rating of all
performance factors.it arises when trait are unfamiliar and
involve personal relation and this occur when an employee
tends to b more dependable.
STRICTNESS TENDENCY OR CONSTANT ERROR:
Every evaluator has his own value system which act as a standard
against which he makes his appraisal. Some supervisors have
tendency to be liberal in their ratings.

THE CENTRAL TENDENCY PROBLEM

It is the most commonly found error. It assigns “average rating” to all
the employees with a view to avoid commitment or involvement.

SIMILARITY ERROR
This type of error occurs when the evaluator rates other people in the
same way he perceives himself.

SOCIAL DIFFERENTIATION
Rating is sometimes impeded by the evaluator’s style of ating
behaviour. Pigou has classified raters as :“high differentiators” using
all or most of the scale, or “low differntiator” using a limited range of
the scale.
 WHY APPRAISAL
TECHNIQUES PROVE
FAILURE?
The supervisor play dual and
conflicting role of both the judge and
the helper.
Too many objectives often cause
confusion.
The supervisor feel that subordinate
appraisal is not rewarding
Poor communication keeps
employee in the dark about what is
expectd of them.
Feedback on appraisal is generally
unpleasant
 HOW APPRAISALS MAY BE MADE
SUCCESSFUL
• The atmosphere should be confident and
trustful
• The supervisor should thoroughly evaluate
the employee’s performance
• The results of performance should be given
due weight
• The supervisor should try to analyse the
strength and weaknesses
• The appraisal programme should be less
time-consuming and less costly.
• The particular techniques which is adopted
for appraisal should be governed by size,
financial resources, philosophy and
objectives of an organisation.
• The results of appraisal should be
communicated to employees.
• A post-appraisal interview should be arranged.
Three such interviews are
 Tell and Sell Method
 Sell and Listen Method
 Problem solving approach
 ETHICS OF APPRAISAL
A/c To M.S.Kellog There Are Some Do’s And
Don’ts
DO’S
• Appraise on the basis of representative
information
• On the basis of sufficient information
• On the basis of relevant information
 DON’TS
• Why appraisal is needed ?
• Write one thing and say another ?
• Acceptance of another’s appraisal ?
THANK YOU…