Performance Appraisal

Performance appraisal
INTRODUCTION
Performance appraisal is the process of obtaining, analyzing and recording information about the
relative worth of an employee. The focus of the performance appraisal is measuring and
improving the actual performance of the employee and also the future potential of the employee.
"Performance appraisal is the systematic, periodic and an impartial rating of an employees
excellence in the matters pertaining to his present job and his potential for a better job."
Performance appraisal is a systematic way of reviewing and assessing the performance of an
employee during a given period of time and planning for his future. It is a powerful tool to
calibrate, refine and reward the performance of the employee. It helps to analyze his
achievements and evaluate his contribution towards the achievements of the overall
organizational goals.
What is Performance?
Performance is synonymous with behavior; it is what people actually do. Performance includes
those actions that are relevant to the organizational growth and can be measured in terms of each
individuals proficiency (level of contribution). Effectiveness Performance refers to the
evaluation of results of performance that is beyond the influence or control of the individual.
How is Performance managed?
Good performance by the employees creates a culture of excellence, which benefits the
organization in the long run. The activity includes evaluation of jobs and people both, managing
gender bias, career planning, and devising methods of employee satisfaction etc. the efforts are to
make to generate the individuals aspirations with the objectives of the organization.
Organization has to clear the way of career advancements for talented and hardworking people.
Fear of any kind from the minds of the employees should be removed so that they give best to
their organization. Allow free flow of information. Communication network should be designed
in such a way no one should be allowed to become a hurdle. This enables the managers to take
correct decisions and that too quickly.
Why Performance Appraisal?
Todays working climate demands a great deal of commitment and effort from employees, who
in turn naturally expect a great deal more from their employers. Performance appraisal is
designed to maximize effectiveness by bringing participation to more individual level in that it
provides a forum for consultation about standards of work, potential, aspirations and concerns. It
is an opportunity for employees to have significantly greater influence upon the quality of their
working lives. In these times of emphasis on Quality, there is a natural equation: better quality
goods and services from employers who enjoy better quality goods and services from their
employers.
Performance appraisal must be seen as an intrinsic part of managers responsibility and not an
unwelcome and time-consuming addition to them. It is about improving performance and
ultimate effectiveness.
Performance appraisal is a systematic means of ensuring that managers and their staff meet
regularly to discuss post and present performance issues and to agree what future is appropriate
on both sides.
This meeting should be based on clear and mutual understanding of the job in question and the
standards and outcomes, which are part of it. In normal circumstances, employees should be
appraised by their immediate managers on one to one basis. Often the distinction between
performance and appraising is not made. Assessment concerns itself only with the past and the
present. The staff is being appraised when they are encourages to look ahead to improve
effectiveness, utilize strengths, redress weaknesses and examine how potentials and aspirations
should match up.
It should also be understood that pushing a previously prepared report across and desk cursorily
inviting comments, and expecting it to be neatly signed by the employee is not appraisal this is
merely a form filling exercise which achieves little in terms of giving staff any positive guidance
and motivation.
Who Conducts Performance Appraisals
Human resource management (HRM) conducts performance management. Performance
management systems consist of the activities and/or processes embraced by an organization in
anticipation of improving employee performance, and therefore, organizational performance.
Consequently, performance management is conducted at the organizational level and the
individual level. At the organizational level, performance management oversees organizational
performance and compares present performance with organizational performance goals. The
achievement of these organizational performance goals depends on the performance of the
individual organizational members. Therefore, measuring individual employee performance can
prove to be a valuable performance management process for the purposes of HRM and for the
organization. Many researchers would argue that performance appraisal is one of the most
important processes in Human Resource Management.
The performance management process begins with leadership within the organization creating a
performance management policy. Primarily, management governs performance by influencing
employee performance input (e.g. training programs) and by providing feedback via output (i.e.
performance assessment and appraisal). The ultimate objective of a performance management
process is to align individual performance with organizational performance. A very common
and central process of performance management systems is performance appraisal (PA). The PA
process should be able to inform employees about the organization's goals, priorities, and
expectations and how well they are contributing to them.
When Performance Appraisals are conducted

Performance appraisals (PAs) are conducted at least annually, and annual employee performance
reviews appear to be the standard in most American organizations. However, it has been
acknowledged that appraisals conducted more frequently (more than once a year) may have
positive implications for both the organization and employee. It is suggested that regular
performance feedback provided to employees may quell any unexpected and/or surprising
feedback to year-end discussions. In a recent research study concerning the timeliness of PAs,
one of the respondents even suggested that the performance review should be done formally and
more frequently, perhaps once a month, and recorded twice a year.
THE APPRAISAL OF PERFORMANCE SHOULD BE GEARED TO:
Improving the ability of the jobholder;

Identifying obstacles which are restricting performance
Agreeing a plan of action, that will lead to improved performance
It is widely accepted that the most important factor in organization effectiveness is the
effectiveness of the individuals who make up the organization. If every individual in the
organization becomes more effective, then the organization itself will become more effective.
The task of reviewing situations and improving individual performance must therefore be a key
task for all managers
For appraisal to be effective, which means producing results for the company, each manager has
to develop and apply skills of appraisal.
These are
Setting Standards of the performance required, which will contribute to the achievement of
specific objective.
Monitoring performance in a cost-effective manner, to ensure that previously agreed

performance standards are actually being achieved on an ongoing basis.
Analyzing any differences between the actual performance and the required performance to
establish the real cause of shortfall rather than assume the fault to be in the job holder.
Interviewing having a discussion with the jobholder to verify the true cause of a shortfall,
developing a plan of action which will provide the performance required.
Appraisal can then become a way of life, not concerned simply with the regulation of rewards
and the identification of potential, but concerned with improving the performance of the
company. The benefits of appraisal in these terms are immediate and accrue to the appraising
manager, the subordinate manager/employee, and to the company as a whole.
MEANING OF PERFORMANCE APPRAISAL
Performance appraisal is a process of evaluating the performance and qualities of an employee in

relation to his job requirements. It consists of two processes i.e. observation and judgment.
Performance appraisal is an ongoing process done in every organization through a formal session
between the supervisor and subordinate. Performance appraisal is an assessment of the
individuals performance in a systematic way, the performance being measured against such
factors as job knowledge, quality and quantity of output, initiative, leadership abilities,
supervision dependability, co-operation, judgment versatility and health.
Assessment should be past as well as future oriented.
DEFINITIONS OF PERFORMANCE APPRAISAL
The formal definitions of performance appraisal extracted from book of HRM and personnel
management are:-
K. Aswathappa.
Performance Appraisal is a formal, structured system of measuring and evaluating an
employees job related behavior and outcomes to discover how and why the employee is
presently performing on the job and how the employee can perform more effectively in the future
so that the employee, organization and society all benefit.
Dale S. beach.
Performance appraisal is the systematic evaluation of the individual with respect to his or her
performance on the job and his or her potential for development
Edwin B. flippo.
Performance appraisal is the systematic, periodic, and an impartial rating of an employees
excellence in matters pertaining to his present job and his potential for a better job.
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Wendell French.
Performance appraisal is the formal, systematic assessment of how well employees are
performing ther jobs in relation to established standards and the communication of that
assessment to employees.
G.D. Fisher.
Performance appraisal is the process by which an employees contribution to the organization
during a specified period of time is assessed.
HISTORY OF PERFORMANCE APPRAISAL
The history of performance appraisal is quite brief. Its roots in the early 20th century can be
traced to Taylor's pioneering Time and Motion studies. But it is not very helpful, for the same
may be said about almost everything in the field of modern human resources management.
As a distinct and formal management procedure used in the evaluation of work performance,
appraisal really dates from the time of the Second World War - not more than 60 years ago. Yet
in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical,
it might very well lay claim to being the world's second oldest profession!
There is, A basic human tendency to make judgments about those one is working with, as well
as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a
carefully structured system of appraisal, people will tend to judge the work performance of
others, including subordinates, naturally, informally and arbitrarily. The human inclination to
judge can create serious motivational, ethical and legal problems in the workplace. Without
structured appraisal system, there is little chance of ensuring that the judgments made in the
organization will be lawful, fair, defensible, accurate and desirable to others. Performance
appraisal systems began as simple methods of income justification. That is, appraisal was used to
decide whether or not the salary or wage of an individual employee was justified. The process
was firmly linked to material outcomes. If an employee's performance was found to be less than
ideal, a cut in pay would follow. On the other hand, if their performance was better than the
supervisor expected, a pay rise was in order.
Little consideration, if any, was given to the developmental possibilities of appraisal. It was felt
that a cut in pay, or a rise, should provide the only required impetus for an employee to either
improve or continue to perform well.
Sometimes this basic system succeeded in getting the results that were intended; but more often
than not, it failed. For example, early motivational researchers were aware that different people
with roughly equal work abilities could be paid the same amount of money and yet have quite
different levels of motivation and performance. These observations were confirmed in empirical
studies. Pay rates were important, yes; but they were not the only element that had an impact on
employee performance. It was found that other issues, such as morale and self-esteem, could also
have a major influence.
As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s
in the United States, the potential usefulness of appraisal as tool for motivation and development
was gradually recognized. The general model of performance appraisal, as it is known today,
began from that time.
OBJECTIVES OF PERFORMANCE APPRAISAL
Managing people:Performance Appraisal helps in managing the employees the best way. It helps to assist staff in
performing their ability, thus maximizing their job satisfaction and their contribution to the
companys objectives. Managing employees by identifying their strengths and weakness and
informing them as to what performance is expected from them. If he understands his role will be
more effective on his job. The feedback reinforces good performances and discourages poor
performance.
Motivating the employees:Achievements, recognition, involvement, job satisfaction and development are more likely to
motivate than anything else, given that they are provided in satisfactory working conditions and
that their awards are appropriate. Appraisals offer a good opportunity for managers to keep in
touch with their employees changing capabilities and aspiration. For managers who take the
motivation of their staff seriously, performance appraisal is an indispensable tool. The added
value is the satisfaction managers themselves derive from appraising staff well and seeing the
results it can bring in terms of increases ability and achievement.
Improving Communication
Performance Appraisal serves as a mechanism for communicating between superiors and
subordinates. Since Appraisal is a particularly refined form of corporate communication, using it
to improve communications is a relevant objective. This applies to both communication on one
to one basis between managers and staff and top management communication in general. Here is
an opportunity to ensure that all issues relating to performance are clarified and to exchange
information in order to improve operational effectiveness.
Providing basis for promotions, transfer, termination and deciding the pay:
Performance Appraisal can identify those sub-ordinates who deserve promotion or require lateral
shift or termination. Thus, performance appraisal can be used for career planning. Performance
Appraisal can help in development of scientific basis for reward allocation, wage fixation, raises
incentives etc.
Removing Work Alienation and Discontent:

Counseling employees corrects misconceptions which might result in work alienation.
Performance appraisal also helps employees internalize the values and norms of the organization.
Identifying and removing factors responsible for worked discontent and thus created a positive
and healthy climate in the organization.
Manpower Planning and Job Content:

Performance Appraisal should give a wealth of data about who is in the right job, who wants to
change jobs and who should be considered for development and promotion. Appraisal is an ideal
situation in which to discuss and recognize changes in job content, which have not been
previously formalized. The main task here is to make follow through and make changes or
explain why the changes are not made.
Identifying training and development needs and aiding in designing Training and
development and training programme:
It helps in bringing out areas where a person is weak and helps in identifying training and
development needs of employee for meeting challenges in their current and future employment.
Therefore then training and development programme are made.
Record Keeping:
It gives a written record for various reasons. For instance, a new manager can get a clear idea of
performance standards expected by him and ongoing targets. Some can compare their present
performance with past performance. It is also necessary for allocation of salary purposes.
Staff Retention:
Many vacancies are unavoidable through retirement, illness, leaving the area or sheer
incompatibility. However many casualties can be avoided if managers can address themselves
to some other issues which cause staff to leave for alternative employment frustration, boredom
, lack of opportunity, lack of recognition etc. Appraisal must be seen as the way of identifying
problem.
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BENEFITS OF APPRAISAL
Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working
life, it offers a rare chance for a supervisor and subordinate to have time-out for a one-on-one
discussion of important work issues that might not otherwise be addressed.
Almost universally, where performance appraisal is conducted properly, both supervisors and
subordinates have reported the experience as beneficial and positive.
Appraisals offer a valuable opportunity to focus on work activities and goals, to identify and
correct existing problems, and to encourage better future performance. Thus the performance of
the whole organization is enhanced.
For many employees, an official appraisal interview may be the only time they get to have
exclusive, uninterrupted access to their supervisor. Said one employee of a large organization
after his first formal performance appraisal, In twenty years of work, thats the first time anyone
have even bothered to sit down and tell me how I am doing.
The value of this intense and purposeful interaction between a supervisor and subordinate should
not be underestimated.
Human Resource Planning

In assessing firms human resources, data is generated on the promo ability and potential of each
employee, particularly the key executives. Hence successions and replacement can be done in an
orderly and objective manner. Also the criteria for evaluation having been established for each
position in an organization, it is possible to identify those areas of staffing that are weak and
need pruning or reinforcement, or are excessively manned. On this basis, future requirement can
be projected or curtailed
Motivation and Satisfaction

Performance appraisal can have a profound effect on levels of employee motivation and
satisfaction- for better as well as for worse.
Performance appraisal provides employees with recognition for their work efforts. The power of
social recognition as an incentive has been long noted. In fact, there is evidence that human
beings will even prefer negative recognition in preference to no recognition at all.
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If nothing else, the existence of an appraisal program indicates to an employee that the
organization is genuinely interested in their individual performance and development. This alone
can have a positive influence on the individuals sense of worth commitment and belonging.
The strength and prevalence of this natural human desire for individuals recognition should not
be overlooked. Absenteeism and turnover rates in some organizations might be greatly reduced if
more attention were paid to it. Regular performance appraisal, at least, is a good start.
Training and Development

Performance appraisal offers an excellent opportunity perhaps the best that will ever occur
for a supervisor and subordinate to recognize and agree upon individual training and
development needs.
During the discussion of an employees work performance, the presence or absence of work
skills can become very obvious even to those who habitually reject the idea of training for
them!
Performance appraisal can make the need for training more pressing and relevant by linking it
clearly to performance outcomes and future career aspirations.
From the point of view the organization as a whole, consolidated appraisal data can form a
picture of the overall demand for training. This data may be analyzed by variables such gender,
department etc. In this respect, performance appraisal can provide a regular and efficient training
needs audit for the entire organization.
Recruitment and Induction

Appraisal data can be used to monitor the success of the organizations recruitment and induction
practices. For example, how well are the employees performing who were hired in the past two
years?
Appraisal data can also be used to monitor the effectiveness of changes in recruitment strategies.
By following the yearly data related to new hires (and given sufficient numbers on which to base
the analysis) it is possible to assess whether the general quality of the workforce is improving,
staying steady or declining.
Employee Evaluation
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Though often understand or even denied evaluation is a legitimate and major objective of
performance appraisal. But the need to evaluate is also an ongoing source of tension, since
evaluative and developmental priorities appear to frequently clash. Yet at its most basic level,
performance appraisal is the process of examining and evaluating the performance of an
individual.
Through organizations have a clear right some would say a duty to conduct such evaluations
of performance, much still recoil from the idea. To them, the explicit process of judgment can be
dehumanizing and demoralizing and a source of anxiety and distress to employees.
It is been said by some that appraisal cannot serve the needs of evaluation and development at
the same time, it must be one or the other. But there may be an acceptable middle ground, where
the need to evaluate employees objectively and the need to encourage and develop them can be
balanced.
Legal Compliance
Appraisal serve a very valuable purpose in providing legally defensible reasons for making
promotion, transfer, reward and discharge decisions. Increasingly a large number of aggrieved
and personnel are taking recourse to legal action when faced with adverse decisions in their own
organizations. Therefore, a formalized Performance Appraisal system can help the company
justify its decision on firm and legally satisfactory grounds
THE CRITICAL ELEMENTS OF PERFORMANCE APPRAISAL

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In order to achieve the objectives of the appraisal it is very essential that certain critical elements
be heeded if the appraisal process needs to be successful.
The components are:
1. Identification of key performance areas
Every job has set of functions to be performed by the holder. As one rises in the
organizational hierarchy, from a supervisor to managerial jobs, the activities and functions
become complex and may keep on changing priority from time to time. The employees will
be assessed on these key performance areas. It differs according to the nature of the job. In
addition to the identification of key performing areas, it is useful to set targets for the period
of appraisal. The target should deal with the task expected to be accomplished by the
appraisee under each key performing areas. The target settling helps the employee to be clear
of the expectation and also provides an opportunity for him to ask the assistance required
from his job in order to accomplish whatever was set for him. The target setting should be
done through a process of mutual consultations and discussions.
2. Managerial and behavioral qualities

Behavioral qualities also play an important role. Employees are expected to discharge certain
behavioral qualities required for performing functions associated with higher level jobs in the
company. Behavior plays a tremendous role. It influences the quality of work done. Some
such qualities include creativity, initiative and contributions to team spirit, organization
ability and perseverance. Appraising the employees periodically on those will enable the
employees to strive for these.
3. Self -Appraisal
Analyzing ones own strengths and weaknesses is the best way of identifying the potentials
available, rather than the other person telling. Self appraisal is a tool to analyze oneself. At
the end of the year of the appraisal process should begin with self appraisal for every
employee. To appraise ones own self on key performing targets and qualities, the appraise
would go through a process of reflection and review. It is an established fact that change is
faster when it is self initiated. If any employee has to improve or do better, he must first feel
the need to do so. Reflection and review is a process that enables him to feel the need and
improve more upon his strengths and weaknesses.
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4. Performance analysis
Analyzing ones own performance gives new insights on how one is performing and what are
the critical points where he has to put his best and improve upon. Increased communication
with the appraiser and appraise will help in sorting out the difficulties and also understanding
the circumstances under which his appraisee is working, the difficulties he is experiencing
and the contribution he is making. The appraised should also understand how he himself is
responsible for some achievements or non-achievements. To meet these objectives at the end
of the year, the appraiser reflects about his performance and identifies factors that prevented
him from doing better. He classifies these factors into factors within his control and factors
outside his control. To this process, he lists the difficulties he is facing. He then gives
analysis to the supervising officer who may add upon the list.
5. Performance discussion
After identification of strengths and weakness and after analyzing the performance, it is
important that the appraiser fixes the time for review and discussion. Counseling is an
important tool for review and discussion. It is intended to understand each other more,
increase mutuality and help each other so that they jointly do better in future. Employee
counseling is often neglected in any organization.
Counseling involves helping an employee to identify his strengths and weaknesses to
contribute to his growth and development. Counseling is a continuous process. Purpose is to
help an employee improve his performance level, maintain his morale, guide him to identify
and develop his strong points, overcome his weak points , develop new capabilities to handle
more responsibilities, identify his training needs. For the appraiser, it is an opportunity to
understand his subordinate more, help him to understand his own strengths and weaknesses
and help him to identify mechanisms for development and performance improvement. Much
of the success of the appraisal depends on these dimensions. If the appraiser does not set a
healthy climate and does not attempt to luster to the feelings of his appraisee, the outcome
may be continued poor performance and tension between the two.
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6. Identify developmental needs.
Performance analysis and review leads to identification of strengths and weaknesses of
employees which provides a foundation for identification of developmental needs. Poorly
performed KPAs are the indicators of inadequate performance and lack of capabilities. An
employee suffering from poor performance can be developed through training on the job,
coaching. If poor performance is due to lack of motivation, it should be dealt with during
counseling session. The appraiser should therefore indicate the developmental needs of the
employee and suggest action after assessment.
7. Final assessment
The appraiser should give the final assessment after completing all steps mentioned above.
By this stage, he would have a thorough understanding of his subordinates, his
accomplishments, strengths and weaknesses; developmental needs etc and are in a good
position to assess him on a rating scale. The final assessment should be shown to the
employees. In case of many strong differences, the appraiser should have the scope for
communicating his reaction so the appraisers boss would have an opportunity to review the
appraisal and moderate.
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THE FIVE-WAY TESTS OF THE PERFORMANCE APPRAISAL SYSTEM:
There is a five-way test determines whether the Performance Appraisal that the organization has
adopted is successful, credible and commands to respect the staff.
The following figure shows the five-way tests for credibility of the Performance Appraisal
system:
Perfor
manc
e
Appra
isal
Syste
m
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Is it Valid?
A good performance system to be valid must be:

Relevant
Relevance implies that there must be clear links between the performance standards. For a
particular job and organizations goals .Also, there must b links between the critical job
elements which have been identified through job analysis. A relevant measure assesses aspects
of performance that truly important in determining job effectiveness.
Not Command- this means that while assessing an employee other elements besides
performance should be avoided. For example, while assessing a salesmans performance, it
would be contaminating if one of the criteria used was the quality of his ties.
Not Deficient- this stands for an assessment that measures all the important aspects of
performance. For example in case of a guard on duty, his appraisal would need to include the
smartness of his turnout as well his alertness and agility.
Is it Reliable?
Reliability in Performance Appraisal refers to the consistency of judgment. This has to aspects:
Firstly, for a particular employee, reliability is enhanced when independent raters evaluate
him more or less similarly. This is especially so when such raters are at about the same level,
say supervisors, peers or subordinates, then perceptions would, in all probability, differ
widely.
Secondly for data to be reliable, the rater must have had adequate opportunity of observing
the employees functions, actions, demeanor, work output etc.., as well as the conditions
under which he or she had performed. Otherwise, if observance had been occasional
intermittent, periodic or inadequate, the data generated would not be reliable.
Is it Sensitive?
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What is implied here is that an evaluation and assessment system must be capable of making a
clear distinction between effective and ineffective performances. Where this does not happen,
and employees, whether good or bad, are rated more or less the same, three consequences follow:
The appraisal becomes useless for any significant administrative exercise;
The purpose of employee development is not served;
Supervisors come to regard the rating process as a routine and meaningless task and
subordinates lose faith in it.
Is it Practical?
From a purely practical standpoint it has to be remembered that a Performance Appraisal systems
takes time, effort and money to develop, implement and use. Hence it must:
Demonstrate establish that the benefits that accrue to the organization outweigh the costs;
Be relatively easy to use. A complex, difficult or cumbersome modus operandi will nullify
the projected gains and breed user resistance.
Render it, easily and freely, to other HR uses.
Is it Acceptable?
This is the most important and essential requirement of all. Performance Appraisal is not of value
unless the system inspires confidence among all sections as to its fairness and freedom from bias.
This is possible only if there is some openness. Therefore supervisors should enlist active support
and cooperation to subordinates by making explicit what aspects of job performance they will be
evaluated on. Instead of secrecy there should be openness then only can then they achieve the
level of acceptability and commitment be achieved which is so sorely needed in Performance
Appraisal.
PURPOSE OF PERFORMANCE APPRAISAL

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Why you do performance appraisal? Purpose of performance appraisal includes elements as

follows:
1. Career Development
This provides an opportunity for discussion of career objectives, and creation of a strategy
designed to maximize career potential.
To provide an opportunity for career counseling
To help in succession planning.
To assess training needs
To plan for career development
To assess and develop individual abilities
To provide an objective basis on which to base decisions about training and promotion
2. Feedback
As well, feedback is encouraged in both directions: as such, employees are encouraged to
prepare ratings of their supervisors.
To provide constructive feedback to the individual regarding how their performance is seen.
This provides a structured format for the discussion of performance issues
on a regular basis.
Feedback either reinforces performance strengths, or provides the opportunity to discuss
resolution of performance deficiencies.
3. Administrative Uses of Performance appraisal

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Salary
Promotion
Retention/termination
Recognition of performance
Layoffs
Identification of poor performers
4. Performance History
This provides a performance history which is not dependent upon human memory, and which
may be useful in the full range of personnel decisions, including compensation decision-making.
To review past and present performance, identifying strengths and weaknesses.
5. Organizational Goals
To clarify, for the individual, organizational expectations
This provides an opportunity to view ones performance in the context of broader
organizational goals.
To assess future promotion prospects and potential
To set objectives for the next period
6. Job Standards
This provides an opportunity for clearer articulation and definition of performance expectations.
7. Documentation use of Performance appraisal

Documentation for HR decisions
Helping to meet legal requirements
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PROCESS OF PERFORMANCE APPRAISAL
The process of performance appraisal is mentioned with the help of the chart.
ESTABLISHING
PERFORMANCE
STANDARDS
COMMUNICATING THE
STANDARDS
COMPARING THE ACTUAL

WITH THE DESIRED
PERFORMANCE
DISCUSSING RESULTS
DECISION MAKING
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ESTABLISHING PERFORMANCE STANDARDS

The first step in the process of performance appraisal is the setting up of the standards which will
be used to as the base to compare the actual performance of the employees. This step requires
setting the criteria to judge the performance of the employees as successful or unsuccessful and
the degrees of their contribution to the organizational goals and objectives. The standards set
should be clear, easily understandable and in measurable terms.
In case the performance of the employee cannot be measured, great care should be taken to
describe the standards.
COMMUNICATING THE STANDARDS
Once set, it is the responsibility of the management to communicate the standards to all the
employees of the organization.
The employees should be informed and the standards should be clearly explained to the. This
will help them to understand their roles and to know what exactly is expected from them. The
standards should also be communicated to the appraisers or the evaluators and if required, the
standards can also be modified at this stage itself according to the relevant feedback from the
employees or the evaluators.
MEASURING THE ACTUAL PERFORMANCE
The most difficult part of the Performance appraisal process is measuring the actual performance
of the employees that is the work done by the employees during the specified period of time. It is
a continuous process which involves monitoring the performance throughout the year. This stage
requires the careful selection of the appropriate techniques of measurement, taking care that
personal bias does not affect the outcome of the process and providing assistance rather than
interfering in an employees work.
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COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE
The actual performance is compared with the desired or the standard performance. The
comparison tells the deviations in the performance of the employees from the standards set. The
result can show the actual performance being more than the desired performance or, the actual
performance being less than the desired performance depicting a negative deviation in the
organizational performance. It includes recalling, evaluating and analysis of data related to the
employees performance.
DISCUSSING RESULTS
The result of the appraisal is communicated and discussed with the employees on one-to-one
basis. The focus of this discussion is on communication and listening. The results, the problems
and the possible solutions are discussed with the aim of problem solving and reaching consensus.
The feedback should be given with a positive attitude as this can have an effect on the
employees future performance. The purpose of the meeting should be to solve the problems
faced and motivate the employees to perform better.
DECISION MAKING
The last step of the process is to take decisions which can be taken either to improve the
performance of the employees, take the required corrective actions, or the related HR decisions
like rewards, promotions, demotions, transfers etc.
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PERFORMANCE REVIEW
Performance reviews are designed to both evaluate general performance and measure progress
around specific goals. When well-structured, performance reviews offer an opportunity to
acknowledge the work of staff, address areas in need of improvement, and identify professional
development and training that will further support the staff members' career growth.
Purpose of Performance review
Translate organizations mission into specific achievable goals
Manage performance rather than react to it
Reduce overlap of job duties and ineffective, inefficient use of employee skills
Provide written acknowledgment of completed work
Gain new information and ideas from staff
Discuss skill and career development
Protect organization from unfounded charges of discrimination
Reduce stress for the supervisor -- managing rather than reacting
Reduce stress for the employee -- what is expected is made clear
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SIGNIFICANCE OF PERFORMANCE REVIEW

Performance reviews can prove valuable to an individual's career development. If a company
conducts reviews properly, the employee should receive pertinent feedback from peers and
managers and, if applicable, clients.
The review usually consists of two components: the written or electronic review, and the oral
review or review meeting.
The written or electronic review should be divided into several sections: goals achieved by the
employee, future goals, the employee's strengths and weaknesses, and helpful recommendations
for the employee's future growth.
The review process may include information on promotions, bonuses, career transfers, or an
increase in job responsibilities. This will depend on factors such as the formality of the review,
its intended purpose, and the frequency with which reviews are conducted. Many organizations
combine performance reviews with promotions and bonuses. Some companies, however, are
more concerned with providing feedback to the employee than they are with compensation and
advancement issues.
The review meeting can either be an asset or hindrance to the individual, depending on how
effective the manager is at giving the appropriate information and feedback. It is important for
the manager performing the review to show the employee that time and effort was put into the
review process. Employees should be made to feel that they are an integral part of the
organization in order to encourage them to address their weaknesses, work on further
strengthening positive areas, and achieve future goals.
If the reviews take place on an annual basis, one must inquire about future promotions, increases
in job responsibilities, and any desires for transfers or new projects.
26
CONDUCTING A PERFORMANCE REVIEW
1. Design a legally valid performance review process; consider these legal requirements of the
performance review process: Performance appraisals should be: job-related and valid; based on a
thorough analysis of the job; standardized for all employees; not biased against any race, color,
sex, religion, or nationality; and performed by people who have adequate knowledge of the
person or job. Be sure to build in the process, a route for recourse if an employee feels he or she
has been dealt with unfairly in an appraisal process, e.g., that the employee can go to his or her
supervisor's supervisor. The process should be clearly described in a personnel policy.
2. Design a standard form for performance appraisals, and include the name of the employee,
date the performance form was completed, dates specifying the time interval over which the
employee is being evaluated, performance dimensions (include responsibilities from the job
description, any assigned goals from the strategic plan, along with needed skills, such as
communications, administration, etc.), a rating system (e.g., poor, average, good, excellent),
space for commentary for each dimension, a final section for overall commentary, a final section
for action plans to address improvements, and lines for signatures of the supervisor and
employee. Signatures may either specify that the employee accepts the appraisal or has seen it,
depending on wording on the form.
3. Schedule the first performance review for six months after the employee starts employment.
Schedule another six months later, and then every year on the employee's anniversary date.
4. Initiate the performance review. Tell the employee that you're initiating a scheduled
performance review. Remind them of what's involved in the process. Schedule a meeting about
two weeks out.
27
5. Have the employee suggest any updates to the job description and provide written input to the
appraisal. Have them record their input concurrent to the your recording theirs. Have them
record their input on their own sheets (their feedback will be combined on the official form later
on in the process).
6. Record your input to the appraisal- always reference the job description and associated formal
goals for basis of review. Be sure you are familiar with the job requirements and have sufficient
contact with the employee to be making valid judgments. Use examples of behaviors wherever
you can in the appraisal to help avoid counting on hearsay. Always address behaviors, not
characteristics of personalities.
7. Hold the performance appraisal meeting. State the meeting's goals of exchanging feedback
and coming to action plans, where necessary. In the meeting, let the employee speak first and
give their input. Respond with your own input. Then discuss areas where you disagree. Attempt
to avoid defensiveness; admitting how you feel at the present time, helps a great deal. Discuss
behaviors, not personalities. Avoid final terms such as "always," "never," etc. Encourage
participation and be supportive. Come to terms on actions, where possible. Try to end the
meeting on a positive note.
8. Update and finalize the performance appraisal form. Add agreed-to commentary on to the
form. Note that if the employee wants to add attach written input to the final form, he or she
should be able to do so.
9. Note that if the supervisor has been doing a good job supervising, then nothing should be
surprising to the employee during the appraisal. Any performance issues should have been
conveyed when they occurred, so nothing should be a surprise in the review meeting.
28
CASE STUDY: PERFORMANCE REVIEW AT PINEHURST
Pinehurst Resorts & Country club believes that its employees should learn as much as they can
about their performance so that they can be even more effective in the future.
Pinehurst has a structured, formalized review system that gives every associate and manager the
chance for a detailed, constructive review at least once a year. We see that system as both a
tremendous commitment and accomplishmentconsidering that we have nearly 1,000 people on
our staff.
The resort follows several guidelines to ensure the best results. First, supervisors prepare for the
process. Supervisors give associates a copy of the review form and ask them to review their
performance. That encourages a healthy selfcriticism in associates and gives them an
opportunity to familiarize themselves with the questions and categories the review will address.
After this selfevaluation, supervisors schedule a formal appointment with the associate.
Supervisors set the appointment in advance so the review comes as no surprise. The appointment
is set for a period with minimum conflict. Supervisors should not schedule review in between
appointments on their calendars. The interview itself needs to be held in a productive climate;
there should be no interruptions, and the setting should be private and comfortable.
Generally the supervisors approach reviews in this way. First, they set an appointment with the
associate. When the associate arrives in their office, they try to establish a comfortable
atmosphere before getting started. After establishing a relatively stressfree atmosphere, the
supervisor conducts that evaluation a productive experience.
Near the end of the review, supervisors spend time with the associate establishing goals for the
upcoming year. Sometimes, these goals can be regular daytoday performance issues on the
job; in other cases, goals could be special project or educational opportunities. Associates leave
the evaluation with an understanding of their past performance, as well as what their future
performance and achievements can be. For the management end, a successful performance
review means weve contributed to one of our most important responsibilities: the training and
development of our staff.
29
METHODS OF PERFORMANCE APPRAISAL
Methods of Performance Appraisal
30
A look at methods
Performance Appraisal can be conducted in various ways but there are some ways that are: Past
Oriented and Future Oriented.
Past Essay
Oriented
are those methods that assess Assessment
the employees
past performance and give
Appraisal
Centers
suggestions for improvement.
Graphics Rating Scale
Management by Objectives
It is not enough if only the past performance is assessed. How an employee can perform in future
Field Review
360-degree Performance
is equally important. Hence focus should be more on employee potential and setting future
Appraisal
performance
goals. The
future oriented techniques are used for this purpose.
Forced Choice
Rating
Critical Incidents Appraisal
Work
Standards
Approach
PAST
ORIENTED
METHOD
Human resource accounting

Behaviorally anchored rating
scales
Methods
1.Ranking
Essay appraisal
to Man Comparisons
InMan
its simplest
form, this technique asks the rater to write a paragraph or more covering an
individuals strength, weakness, potential and so on. In most selection situations, particularly
Checklist Method
those involving professional, sales or managerial positions, essay appraisal from former
Performance
Test or
and
employers,
teachers
associates carry significant weight. The assumption seems to be that
Observation
an
honest and informed statement either by word or mouth or in writing - from someone
who knows a man well, is fully as valid as more formal and more complicated methods.
Confidential report
The biggest drawback to essay appraisals is their variability in length and content. Moreover,
since different essays touch on different aspects of mans performance or personal
qualifications, essay ratings are difficult to combine or compare. For comparability, some
type of more formal method, like the graphic rating scale is desirable.
2. Graphic rating scale

This technique may not yield the depth of an essay appraisal, but it is more consistent and
reliable. Typically a graphic scale assess a person on the quality and quantity of his work and
on a variety of other factors that vary with the job but usually include personal traits like
reliability and cooperation. It may also include specific performance items like oral and
written communication.
The graphic scale has come under frequent attack but remains the most widely used rating
method. In a classic comparison between the old-fashioned graphic scale and the much
more sophisticated forced-choice technique, the former proved to be fully as valid as the best
of the forced-choice forms and better than most of them. It is also cheaper to develop and
31
more acceptable to raters than the forced-choice form. For many purposes there is no need to
use anything more complicated than a graphic scale supplemented by a few essay questions.
3. Field review
When there is reason to suspect rater bias, when some raters appear to be using higher
standards than others or when comparability of ratings is essential, essay or graphics ratings
are often combined with a systematic review process. The field review is one of the several
techniques for doing this. A member of the personnel or central administrative staff meets
with small groups of raters from each supervisory unit and goes over each employees rating
with them to
a) Identify areas of inter-rater disagreement
b) Help the group arrive at consensus and
c) Determine that each rater conceives the standards similarly
4. Forced choice rating
Like the review, this technique was developed to reduce bias and establish objective
standards of comparison between individuals, but it does not involve the intervention of a
third party. Although there are many variations of this method the most common one asks
raters to choose from among group of statements those which best fit the individual being
rated and those which least fit him. The statements are then weighted or scored very much
the way a psychological test is scored. People with high scores are by definition, the better
employees those with low scores are the poorer ones. Since the raters does not know what the
scoring rates for each statement are, in theory at least, he cannot play favourites. He simply
describes his people and someone in the personnel department applies the scoring rates to
determine who gets the best rating.
The rationale behind this technique is difficult to fault. It is the same rationale used in
developing selection test batteries. In practice, however the forced choice methods tend to
irritate raters who feel they are not being trusted. They want to say openly how they rate
someone and not be scored-guessed or tricked into making honest appraisals.
A few clever raters even found ways to best beat the system. When they want to give average
employee a higher rating, they simply describe the best employee they know. An additional
32
drawback is the difficulty and cost of developing forms. Consequently , the technique is
usually limited to middle and lower management levels where the jobs are sufficiently
similar to make standard common forms feasible. Finally forced choice forms tend to be a
little value and probably have a negative effect when used in performance appraisal
interviews.
5. Critical incidents Appraisal

The discussion of ratings with employees has , in many companies proved to be a traumatic
experience for supervisors. Some have learnt from bitter experience what General Electric
later documented, people who receive honest but negative feedback are typically not
motivated to do better and often do worse after the appraisal interview , or if forced to help
them, avoid getting giving negative rating when the ratings have to be shown to the
employee.
One stumbling block has no doubt been the unsatisfactory ratings from used. Typically these
are graphics scales that often include rather vague traits like initiatives, cooperativeness,
reliability and even personality. Discussing these with an employee will be difficult.
The critical incident technique tools like natural to some people for performance review
interviews, because it gives a supervisor actual factual incidents to discuss with an employee.
Supervisors are asked to keep a record, a little black book on each employee and to record
actual incident of positive or negative behavior.
For example:
Bob Smith, who have been rated as somewhat unreliable, fails to meet several deadlines
during the appraisal period. His supervisor makes a note of this incident and is now prepared
with hard , factual data :Bob , I rated you down on reliability because on three different
occasion over the last two months, you told me you would complete something and you
didnt . You remember six weeks ago when I . Instead of arguing over traits , the
discussion now deals with actual behavior. Possibly , Bob has misunderstood the supervisor
or had good reason for his apparent unreliability if so, has now an opportunity to respond.
His performance, not his personality is being criticized. He knows specifically how to
perform differently if he wants to be rated higher next time. Of course, Bob might feel the
supervisor was using unfairly high standards in evaluating his performance but atleast he
would know just what those standards are.
There are, however several drawbacks to this approach. It requires that the supervisors jot
down incidents on a daily or at the very least a weekly basis. This can become a chore.
Furthermore, the critical incident rating technique need not but may cause a supervisor to
33
delay feedback to employees and it is hardly desirable to wait six months or a year to
confront an employee with a misdeed or a mistake.
Finally the supervisors set the standards. If they seem unfair to subordinate, might he not be
more motivated atleast has some say in setting or atleast agreeing to the standards against
which he is judged.
6. Work Standards Approach

Instead of asking employees to set their own performance goals, many organizations set
measured daily work standards. In short, the work standards technique establishes work and
staffing targets aimed at improving productivity. When realistically used, it can make
possible an objective and accurate appraisal of the work of employees and supervisors.
To be effective, the standards must be visible and fair. Hence a good deal of time is spent
observing employees on the job , simplifying and improving the job where possible and
attempt to arrive a realistic output standards.
It is not clear, in every case that work standards have been integrated with an organizations
performance appraisal program. However since the work standards program provides each
employee with a more or less complete set of his job duties, it would seem only natural that
supervisors will eventually relate performance appraisal and interview comments to these
duties. I would expect this to happened increasingly where work standards exist. The use of
work standards should make performance interview less threatening than the use of personal
more subjective standards alone.
The most serious drawback appears to be the problem of comparability. If people are
evaluated on different standards, how can the ratings be brought for comparison purposes
when decisions have to be made on promotions or on salary increases? Fir these purposes
some form of ranking is necessary.
7. Ranking Methods
34
For comparative purposes, particularly when it is necessary to compare people who work for
different supervisors, individuals statements, ratings or appraisal form are not particularly
useful. Instead , it is necessary to recognize that comparisons involve an overall subjective
judgement to which a host of additional facts and impressions must somehow be added.
There is no single form or way to do this.
Comparing people in different units for the purpose of, say choosing a service supervisor or
determining the relative size of salary increases for different supervisors requires subjective
judgement, not statistics. The two most effective methods are alternation ranking and
comparison ranking.
Alternation Ranking: In this method the names of employees are listed on the left hand side
of a sheet of paper- preferably in random order. If the rankings are for salary purposes, a
supervisor is asked to choose the most valuable: employee on the top list, cross his name off
and put it at the top of the column on the right hand column. The ranker then selects the
most valuable person from the remaining list, crosses his name off and enters it below the
top name on the right hand list and so on.
Paired-Comparison Ranking: This technique is probably just as accurate as alternation

ranking and might be more so. But with large numbers of employees it becomes extremely
time consuming and cumbersome
To illustrate the method .Let us say we have 5 employees Mr Ram, Mr Manoj , Mr Prasad,
Mr Rayan and Mr Mohit. We list their names on the left-hand side of the sheet. We compare
Mr. Ram with Mr. Laxman on whatever criterion we have chosen,, say present value to the
organization. If we feel Ram is more valuable than Laxman, we put a tally besides Rams
name. We then compare Ram Manoj , Prasad and Rayan. The process is repeated for each
individual. The name with the most tallies is the most valuable person, at least in the eyes of
the rater, the man with no tallies at all is regarded as the valuable person.
Both ranking techniques, particularly when combined with multiple rankings are among the
best available for generating valid order-of-merit rankings for salary administration purposes.
8. Man-to-Man comparisons
35
The American Army used this method during World War I , under this method Certain
Factors are selected for the purpose of analysis such as leadership , dependability and
initiative and scale is designed for the rater for each factor. A scale of man is also created for
each selected factor. The each man to be rated is compared with the man in the scale and
certain scores for each factor is awarded to him. In other words, instead of comparing a
whole name to a whole man, personnel are compared to the key man in respect of one
factor at a time. This method id knows as factor comparison method. The defect of this
method is that the developing a scale is quite tough and complicated method.
9. Checklist Method
It is the simplest form of evaluation method. Under this method a list of statements
describing the job related behavior of the employees is given to the evaluator. If the evaluator
perceives that the employee possess a particular trait, the statement is checked and if he feels
that the employees does not possess that quality he leaves it blank. He then submits it to the
human resource department where counting of the checks is carried out and performance is
assessed.
10. Performance Tests and Observations

In this case employee assessment is based upon a test of knowledge or skills. The test may be
of the paper and pencil variety or actual demonstration of skills. The test must be reliable and
must be validated to be useful. Even then, performance tests are apt to measure potential
more than actual performance. In order for the test to the job related observations should be
made under circumstances likely to be encountered.
11. Confidential report

This is a traditional form of appraisal used in most government organizations. A confidential
report is a report prepared by the employees immediate supervisor. It covers the strengths
and weaknesses, main achievements and failure, personality and behavior of the employee. It
is a descriptive appraisal used for promotions and transfers of employees.
FUTURE-ORIENTED
36
1. Assessment Centre
So far, we have been talking about assessing the past performance. What about the future
performance or potential? In any placement decision and even more so in promotion
decision, some prediction of future performance is necessary. How can the kind of prediction
be made most validly and fairly?
One widely used rule of thumb is that what a man had done is the best predictor of what he
will do in future. But suppose you are picking a man to be supervisor and this person has
never held a supervisory responsibility? Or suppose you are selecting a man for a job from
among a group of candidates , none of who had done the job or one like it? In these
situations, many organizations use assessment centers to predict future performance more
accurately
Typically, individuals from different department are brought together to spend two or three
days working on individual and group assignments similar to the ones they will be handling
if they are promoted. The pooled judgment of observers- sometimes derived by paired
comparison or alternation ranking for each participant. Less structured, subjective judgments
are also made.
There is a good deal of evidence that people chosen by assessment center methods work out
better than those not chosen by these methods. The center also makes it possible for people
who are working for departments of low status or visibility in an organization to become
visible and , in the competitive situation of an assessment centers, show how they stack up
against people from more well know departments. This has the effect of equalizing
opportunity . Improving morale and enlarging the pool of possible promotion candidates.
2. Management by objectives
37
The use of management objectives was first widely advocated in the 1950s by the noted
management theorist Peter Ducker. MBO (management by objectives) methods of
performance appraisal are results oriented. That is, they seek to measure employee
performance by examining the extent to which predetermined work objectives have been
met. Usually the supervisor and subordinate establish the objectives jointly. An example of
an objective for a sales manager might be : Increase the gross monthly sales volume to $
250000 by 31-July. Once an objective is agreed, the employee is usually expected to self
audit, that is to identify the skills needed to achieve the objective, typically they do not rely
on others to locate and specify their strengths and weaknesses. They are expected to monitor
their own development and progress.
The main advantage of the MBO approach is to overcome some of the problems that arise as
a result of assuming that the employees traits, the MBO method concentrates on actual
outcomes. If the employee meets or exceeds the set of objectives, then he or she has
demonstrated an acceptable level of job performance. Employees are judged according to
real outcomes and not on their potential for success or on someones subjective opinion of
their abilities.
The guiding principle of the MBO approach is that direct results can be observed, whereas
the traits and attributes of employees must be guessed or inferred. The MBO method
recognizes that fact that it is difficult to neatly dissect all the complex and varied elements
that go to make up employee performance. MBO advocates claim that the performance of
employees cannot be broken up into so many constituent parts, as one might take part an
engine to study it. But put all the parts together and the performance may be directly
observed and measured.
MBO methods of performance appraisal can give employees a satisfying sense of autonomy
and achievement. But on the downside, they can lead to unrealistic expectations about what
can and cannot be reasonably accomplished. Supervisors and subordinates must have very
good reality checking skills to use MBO appraisal methods.
They will need these skills during the initial stage of objective setting and for the purpose of
self auditing and self motivating, Unfortunately, research studies have shown repeatedly that
human beings tend to lack the skills needed to do their own reality checking. Nor does
training easily convey these skills. Reality itself is an intensely personal experience, prone to
38
all forms of perceptual bias. One of the strengths of MBO method is the clarity of purpose
that flows from a set of well articulated objectives. But this can be a source of weakness also.
It has become very apparent that the modern organization must be flexible to survive.
Objectives, by their very nature tend to impose certain rigidity. Of course the obvious answer
is to make the objectives more fluid and yielding. But the penalty for fluidity is loss of
clarity. Variable objectives may cause employee confusion. It is also possible that fluid
objectives may be distorted to disguise of justify failures in performance.
Four Steps in the MBO Process

How MBO works can be described in four steps:
The first step is to establish the goals each subordinate is to attain. In some organizations,
superiors and subordinates work together to establish goals. In others. Superiors establish goals
for subordinates. The goals typically refer to the desired outcome to be achieved. These goals can
then be used to evaluate employee performance.
The second step involves setting the performance standard for the subordinates in a previously
arranged time period. As subordinates perform, they know fairly well what there is to do, what
has been done, and what remains to be done.
In the third step, the actual level of goal attainment is compared with the goals agreed upon. The
evaluator explores reasons for the goals that were not met and for the goals that were exceeded.
This step helps determine possible training needs. It also alerts the superior to conditions in the
organization that may affect a subordinate but over which the subordinate has no control.
The final step involves establishing new goals and, possibly new strategies for goals not
previously attained. At this point, subordinate and superior involvement in goal-setting may
change. Subordinates who successfully reach the established goals may be allowed to participate
more in the goal setting process the next time. The process is repeated. As with other approaches.
39
MBO too has been criticized. One comment made against the approach is that it is not applicable
to all jobs in all organizations. Jobs with little or no flexibility. Such as assembly-line work, are
not compatible with MBO. An assembly-line worker usually has so little job flexibility that the
performance standards and objectives are already determined. The MBO process seems to be
most useful with managerial personnel 'and employees who have a fairly wide range of
flexibility and self-control in their jobs. Besides, when the result of an MBO system are to be
used to allocate organizational rewards, employees may be less likely to establish challenging
goals-goals they are confident that they can accomplish. Further, the allocation of merit pay on a
semi-annual or annual basis may encourage the setting up of goals with short time horizons to
the disadvantage of important long-term goals.
3. 360 degree Performance Appraisal

360-degree appraisal feedback is the latest method of performance appraisal, which mainly
originated in Japan. It is all-round appraisal system, which gives well-rounded feedback to an
employee hence the name 360-degree appraisal. The feedback in this process not only comes
from the top, but also from colleagues and subordinated as well. This system can be
40
administered on an annual basis for each financial year. The 360 degree performance
appraisal provides a broader perspective about an employees performance. It facilitates
greater self-development of the employees. Multi-source development feedback is highly
useful. It enables the employee to compare his or her perception about with perception of
others. It provides a formalized link between the employee and his or her customer. It helps
in identifying and measuring interpersonal skills, customer satisfaction and team building
skills. The 360-degree feedback system provides managers an opportunity to learn from their
mistakes
and
incorporate
the
learning
in
their
managerial
process.
A figure to make clear the actual functioning of the 360-degree Performance
Top Management
(Internal Customer)
Manager (Internal
Customer)
Suppliers (External
Customer)
Employee
Subordinate (Internal
Customer)
Clients (External
Customer)
Co-workers
or team
members
(Internal
Customer)
Other
Department
Representati
ve
(Internal
Customer)
41
Steps involved in 360 degree appraisal:

1. Top management communicates the goals of and need for 360 degree appraisal.
2. Employees and managers are involved in the development of the appraisal criteria and
appraisal process.
3. Employees are trained in how to give and receive feedback
4. Employees are informed about the nature of the 360 degree appraisal instrument and
process.
5. The 360 degree system undergoes pilot testing in one part of the organization.
6. Management continuously reinforces the goals of the 360 degree appraisal and is ready to
change the process when necessary.
4. Human resource accounting method

Human resources are a valuable asset of any organization. This asset can be valued in terms
of money. When competent and well-trained employees leave an organization, the human
asset is decreased and vice versa. Under this method, performance is judged in terms of costs
and contributions of employees. Cash of human resource planning, recruitment, selection,
induction, training, compensation etc. contribution of human resources is the money value of
labour productivity or value added by human resources. Difference between cost and
contribution will reflect the performances of employees.
42
5. Behaviorally anchored Rating Scales
Behaviorally anchored scales are also called behavioral expectation scales. They are rating
scales whose scale points are determined by statements of effective and ineffective behaviors.
The exponents of BARS claim that it is more reliable and advantageous method of
performance appraisal. It is defined to identify critical areas of performance of a job. Under
this method the critical areas of effective and ineffective performance behavior for getting
results are recognized. The evaluator is required to observe the behavior of the employee
while performing the job. He then compares these behavioral observations with behaviorally
anchored ratings scales. Experimental studies of BARS has collected eight performance
criteria namely knowledge and judgment, human relation skills, conscientiousness, skills in
operation of register, organizational ability, skill in monetary transaction, observational
ability. This method is more valid and expected to give more reliable results as it minimizes
the errors in performance appraisals. It identified measurable behavior therefore mere
scientific.
43
LIMITATIONS OF PERFORMANCE APPRAISAL TECHNIQUES
1. Halo Effect
The rater may base the full appraisal on the basis or one positive quality which was found out
earlier. For e.g. If a person is evaluated on one quality i.e. emotional stability and if he scores
very high in the case of emotional stability, then the rater may also give him high scores (marks
or grades) for other qualities such as intelligence, creativity etc., even without judging these
characteristics
2. Problem of Leniency or Strictness

Many raters are too lenient (not strict) in their ratings. High scores may be given to all
employees, even if they have no merit. Also a reverse situation may take place, where all
employees are rated very strictly and very low scores are given.
3. Central Tendency
Sometimes a rater gives only middle range scores to all individuals. Extremely high or low
scores are avoided. This is called Central Tendency.
4. Personal Bias
Performance appraisal is affected by personal bias of the rater. If the rater has good relations with
the rate (an employee who is getting rated), he may give higher scores to the rate, even though
the rate does not deserve such high scores. So personal bias may lead to favored treatment for
some employees, and bad treatment to others.
44
5. Paper Work
Some supervisors complain that performance appraisal is pointless paper work. They complain
because many times, performance appraisal reports are found only in the files. It does not serve
any practical purpose. In other words, the performance appraisal reports are not used by some
organizations. They are conducted just as a formality or for the name sake.
6. Fear of Spoiling Relations

Performance appraisal may also affect superior-subordinate relations. An appraisal makes the
superior more of a judge than a coach. So, the subordinate may have a feeling of suspicion and
mistrust, about the superior.
7. Evaluate performance not person

The rater should evaluate the performance, i.e. output, new ideas, extraordinary efforts, etc. and
not the person. In reality, the person is evaluated and not his performance. It should be noted that
failure is an event and a not a person.
8. Horn Effect
Sometimes the raters may evaluate on the basis of one negative quality. This results in overall
lower rating of the particular employee. For e.g. "He does not shave regularly. Therefore, he
must be lazy at work."
9. Spillover Effect
45
In this case, the present performance appraisal is greatly influenced by past performance. A
person who has not done a good job in the past is considered (assumed) to be bad for doing
present work.
10. Latest Behaviour Effect

The rating is also influenced by the most recent behavior. The rater may ignore an average
behavior during the full appraisal period.
APPRAISE THE PERFORMANCE

46
The next step in the appraisal process is to measure the performance. We revert to the moral of
the story narrated in the beginning of this chapter. The moral taught us that we need to measure
the performance and not mere activities.
What then is performance? Performance is essentially what an employee does or does not do.
Employee performance common to most jobs include the following elements:
Quantity of output
Quality of output
Timeliness of output
Presence at work
Cooperativeness
In addition to these, other elements that deserve assessment are job knowledge, leadership
abilities, judgment, supervision, versatility and health. Assessment should also include one's
potential to perform and not just actual performance.
Performance measurement needs to be based on the benchmarks listed above. These

benchmarks vary from job to job. The job of a professor needs to be assessed against parameters
that are different to those used to evaluate the performance of a sales representative.
PERFORMANCE INTERVIEW
47
Performance interview is another step in the appraisal process. Once appraisal has been made
of employees, the raters should discuss and review the performance with the ratees, so that they
will receive feedback about where they stand in the eyes of superior. Feedback is necessary to
effect improvement in performance, especially when it is inadequate. Specifically, performance
interview has three goals:
(i)
to change behavior of employees whose performance does not meet organizational

requirements or their own personal goals.
(ii)
To maintain the behavior of employees who perform in an acceptable manner and
(iii)
to recognize superior performance behaviors so that they will be continued.
Raters offer feedback to the ratees through several methods-tell and sell, tell and listen,
problem solving and mixed. In tell and sell, also called directive interview, the interviewer let
assesses know how well they are doing and sells them on the merits of setting specific goals for
improvement, if needed. The tell and listen interview provides the subordinates with chances to
participate and establish a dialogue with their superiors. Its purpose is to communicate the rater's
perceptions about the ratee's strength and weaknesses and let the subordinates respond to these
perceptions. In the problem -solving or participative interview, an active and open dialogue is
established between the superior and the subordinate. Not only are perceptions shared, but also
solutions to problems are presented, discussed, and sought. Mixed interview is a combination of
tell and sell and problem solving interviews.
Whatever be the approach followed, the emphasis in the interview should be on counseling
and development and not on criticism, witch-hunting and buck passing. Because of the
significance of appraisal interview, every effort must be made to make it effective. Guidelines
given in Table below will help make the interview successful.
GUIDELINES FOR EFFECTIVE APPRAISAL INTERVIEW

48
Select a good time
Minimize interruptions
Welcome, set at ease
Start with something positive
Ask open ended questions to encourage discussion
Listen
Manage eye contact and body language
Be specific
Rate behavior, not personality
Layout development plan
Encourage subordinate participation
Complete form
Set mutually agreeable goals for improvement
End in a positive, encouraging note
Set time for any follow up meetings
USE OF APPRAISAL DATA
49
The final step in the evaluation process is the use of evaluation data. The data and information
generated through performance evaluation must be used by the HR department.
It may be recollected that the most significant rewards employers offer to employees are:
1. Money to purchase goods and services required not only for current and future survival, but
also for the luxuries modern life has to offer.
2. The opportunity to use innate and learned skills and talents in a productive manner that the
individual and his or her managers and co-workers recognize as valuable.
3. Opportunities to interact with other people in a favorable working environment.
4. Opportunities to learn, grow, and make full use of their potential.
5. A sense of performance and stability through the continuing existence of the organization and
the job.
6. The opportunity to perform work assignments within an environment that not only protects.
But promotes physiological, emotional and psychological health.
In one way or another, data and information outputs of a performance-appraisal programme can
critically influence these coveted employer-employee reward opportunities. Specifically, the
data and information will be useful in the following areas of HRM:
I. Remuneration administration
2. Validation of selection programmes
3. Employee training and development programmes
4. Promotion, transfer and lay-off decisions
5. Grievance and discipline programmes
6. HR planning
CHALLENGES OF PERFORMANCE APPRAISAL
50
The problem with subjective measure is the rating which is not verifiable by others and has the
opportunity for bias. The rate biases include:
(a)halo effect,
(b) the error of central tendency,
(c)the leniency and strictness biases,
(d) personal prejudice, and
(e)the recent performance effect
(a) Halo Effect:
It is the tendency of the raters to depend excessively on the rating of one trait or behavioral
consideration in rating all others traits or behavioral considerations. One way of minimizing
the halo effect is appraising all the employees by one trait before going to rate on the basis of
another trait.
(b) The error of Central Tendency:
Some raters follow play safe policy in rating by rating all the employees around the middle
point of the rating scale and they avoid rating the people at both the extremes of the scale.
They follow play safe policy because of answerability to management or lack of knowledge
about the job and person he is rating or least interest in his job.
(c)The Leniency and Strictness:
The leniency bias crops when some raters have a tendency to be liberal in their rating by
assigning higher rates consistently. Such ratings do not serve any purpose. Equally damaging
one is assigning consistently low rates.
(d)Personal Prejudice:
51
If the rater dislikes any employee or any group, he may rate them at the lower end, which
may distort the rating purpose and affect the career of these employees.
(e)The Recent performance Effect:
The raters generally remember the recent actions, of the employee at the time of rating and
rate on the basis of these recent actions favorable or unfavorable than on the whole activities.
PERFORMANCE APPRAISAL IN SOFTGAINZ TECHNOLOGIES.
52
Introduction to the company

SOFTGAINZ Technologies - providing Web-based Solutions
SOFTGAINZ Technologies is a fast growing IT services Company. The Company commenced
its operations in April 2005 providing Web-based Solutions, gradually evolving into a pure IT
SERVICES COMPANY. Today, Our Company provides a wide range of IT Services including
Customized Software Development, web Application Development / Migration /
Reengineering and Enhancement / Testing / Maintenance, Web page Design and Development
,Database Management system / Migration, Bug fixing and technical support, Database
development, Files imports/updates, Clean up your database, Remove duplicates data, list
marketing database, List Segmentation / Fulfillment,
Data Hygiene / Appends, Profile Analysis, Merge Purge, Duplication Elimination, Online
Count System, NCOA(National Change OF Address), CASS report, OASPro, Tally etc. to
companies .
They engage with client by undertaking complex application development, Database projects
or Web site projects using our Delivery Platform or help you in implementing applications
support or manage Databases.
With Design and development expertise in diverse platforms, usage of best-of-breed tools and
techniques, combined with their state-of-the-art software development facilities, SOFTGAINZ
delivers significant business benefits.
They integrate their disparate data sources into a single, cohesive marketing database, so you
can understand, cultivate and profit from your greatest asset. your customers.
Company Overview
53
" Complete commitments to helping clients achieve result "
SOFTGAINZ Technologies is a fast growing IT services Company. The Company commenced
its operations in April 2005 providing Web-based Solutions, gradually evolving into a pure IT
SERVICES COMPANY. Today, it provides a wide range of IT Services including Database
Management, Application and Webpage design and Development, etc. to companies in India
and the US.
They engage with client by undertaking complex application development, Database projects
or Web site projects using our Delivery Platform or help them in implementing applications
support or manage Databases.
They can then build a long term outsourcing partnership relationship to manage your
applications or Databases, your processes and even 24X7 DBA support.
Applying innovations to their own operations has also given them unique insight into how to
address their customers business issues.
The depth of their experience enables them to guarantee many projects success at a fixed price.
It is this combination of hands-on experience and relentless focus on results.
SOFTGAINZ Technologies delivers sound and cost effective solutions to your requirements.
We have office that is staffed by talented and experienced professionals whose expertise spans
the Retail, Manufacturing, Financial Services, Utilities, Pharmaceuticals, Media and Textile
Domains.
They have structured their organization to give clients what they need, when they need it, and
built in ways to uncover new efficiency opportunities for them before they realize it
themselves. They believe that their attention to detail, responsiveness, accuracy, and
commitment to our clients is unmatched.
SOFTGAINZ SERVICES
54
Application Development:
With design and development expertise in diverse platforms, usage of best-of-breed tools and
techniques, combined with our state-of-the-art software development facilities, SOFTGAINZ
Technologies delivers significant business benefits to its customers.
Web Design and Development:

When it comes to web development, we've got you covered. They specialize in developing
custom, high-quality web sites that promote their company's brand online. From the initial
design, to the necessary programming, hosting, promotion, and maintenance.
Database Management:
SOFTGAINZ manages all your incoming customer data via mail, web, email and data feed,
and insures that the data is scrubbed, checked for duplication, and fully integrated into your
customer database.
List Management:
SOFTGAINZ can update and maintain your lists/database for order fulfillment. The average
turnaround time for an order is one business day. Nth name extraction or extraction by list
variables is available
55
Performance Appraisal in SOFTGAINZ Technologies
Overall concept and Philosophy

SOFTGAINZ LTD has made a conscious effort towards creating and fostering a strong
performance driven culture in the organization, especially over the last few years THE
EMPLOYEE DIALOGUE in once such initiative, which would ensure clarity of roles and
responsibility for each individual, focused goal setting in line with corporate objective and
also identifying and rectifying any issues which could hinder the effectiveness of individuals.
This is achieved by means of regular dialogue between superior and employee.
Objectives
1. To attach a clear set of roles and responsibilities to each position in the organization.
2. To provide opportunities for employees to understand, participate and take responsibility
for accomplishing business goals and objectives.
3. To review individuals performance in terms of objectives set and link it to performance
related pay.
4. To continually help individuals to develop and enhance the necessary competencies and
address issues affecting their effectiveness.
5. To foster an open dialogue between superior and subordinate.
In SOFTGAINZ TECHNOLOGIES there are 3 modules followed

56
1. Position Roles and Responsibilities
The Employee Dialogue begins with this module and it is pre-requisite for other 2 modules.
As every position has some rules and regulations, this module help in defining these roles
and responsibilities. The Position Description is a result of discussion between the employee
and his superior regarding his expected role and perceived role and at the end arriving at an
expected role and responsibilities of the position. Position Description changes with changes
in role and responsibilities.
Persons involved are
Employees
Superiors
Division head
Peers and Colleagues who know the requirement of the position
Why is it done?
A systematic presentation of Roles and Responsibilities of the position

To understand why the position is existing
Helps in Individual Objective setting and Performance Review and Effectiveness
mapping
What is it used for
Competency Mapping Behavioural competencies as well as technical and

functional knowledge is derived by clearly understanding the role and
responsibilities of the positions.
Recruitment and Transfer It gives the necessary requirements in terms of
education, experiments, specific knowledge and business understanding.
Position Evaluation It helps in determining the relative importance worth of
each position within the organization and in the industry.
Forms Used
A1
A2
57
2. Performance Objective Setting and Review
This module ensures that the corporate objectives are laid down and individual objectives are
simultaneously laid down in line with the corporate goals. All this is done in the form of a
dialogue between the superior and the employee. It also ensures that performance is reviewed
objectively not only in terms of actual achievement/ non achievement of targets, but also
keeping in mind the context in which performance was delivered. This module would give
inputs for increment as well as future potential.
Persons Involved are
Employee
Superior
Why is done?
To fix objective and give weightage to it

To review objectives
To determine performance related pay and increment
To ensure that the objectives are also as may be applicable for Consumer, Employee,
Finance, Processes
To give overall performance rating
What is it used for?
Determination of performance pay

Overall Performance Pay
Increment
Forms Used
B1
B2
B3
58
3. Effectiveness Mapping and Action Plan
This module aims at enhancing the effectiveness of the individual vis--vis his/her specific
position by mapping the behavioural competencies and functional/technical knowledge
required by the position and comparing the individual competencies and may affect the
individuals effectiveness on the job. It also has an Action Plan that rectifies the competency
and knowledge gap.
Persons Involved are
Employee
Superior
Why is it done?
To identify, map and check whether the employees possess it or not

To identify other issues such as his/her role, his/her team personal reasons etc, that
effect his/her effectiveness
To identify the core competency of an individual
To get the individuals aspirations and future career interests
What is it used for?
Enhancement of individuals Effectiveness

Recruitment
Forms Used
C1
C2
59
ABOUT THE FORMS:
A1
This form is filled in the beginning of the financial year. This form states the identity and
the position of the employee. It specifies the purpose for which the position exists in the
organization. It gives the clear view of the size of the firm Financial and Non Financial. It
even shows the impact of external and internal factors on his position. Hence his/her
minimum requirements in terms of education, experiments, specific knowledge and
business understanding are also specified. The mutual consent of the superior and the
subordinate is also displayed through their signatures.
A2
This form is also filled in the beginning of the financial year and it also specifies the
employees identity. It mentions the Area of responsibility by giving the heading and
definition of the project and the results expected from the project. It states whether the
level of responsibility is shared, supported or fully taken over by the employee. At the
end it makes it clear whether the measurement criteria in quantitative or qualitative.
B1
Here the objectives are set taking into considerations the business environment. It shows
the business trends analysis and the business conditions, those are expected to affect
positively or negatively the position and performance of the employee. It also specifies
the long term and short-term business objective.
B2
This form is further divided into B2a, B2b and B2c and each form is setting individual
objectives.
B2a is for the Head and the commercial Head of the Business Division.
B2b is for the Unit Head in the business Division.
B2c is for the corporate Division/ Department Heads.
It also gives employee details and specifies the objective. The objective is further divide
into Objective A and Objective B.
60
Objective A includes the financial Objective
Objective B includes the following Objectives:
Financial Objective; they are those objectives those are not included under
Objective A.
Process Focused Objective; these can be cost reduction, process improvement etc.
Employee Focused Objective; it basically involves the objective that deal with
satisfying the needs of the employees by giving proper training when and where
needed, identifying performers and non-performers etc.
Customer Focused Objective; this includes satisfaction survey, checking the
market share etc.
This form is filled in the beginning and again when the Objective are achieved. The sign
and date are displayed to show mutual consent and when the required data was filled.
B3
This form reviews the performance of the employee in the particular financial year. It
states whether the objectives are Consumer, Finance, Processes and Employee focused. It
also mentions whether the objectives are achieved, not achieved, exceeded the
expectation or is not considered at all.
The employee is given an overall performance rating by stating whether he needs
improvement or meets expectation or exceeds expectations. In this form employee is also
free to give his comment, whether negative or positive.
C1
This form is for effectiveness Mapping and action plan. It mentions the behavioural
competencies and the functional and technical knowledge. This form covers other issues
concerning effectiveness, core competence and future career interest/aspirants of the
employee.
C2
It specifies the behavioral competency gaps for functional/technical gaps and other issues
as identified in form C1. It also specifies actions to be taken, the resources and support
required and the time frame within which it is to be completed. During the dialogue the
progress on the objective as well as the action plans should be reviewed.
61
RESEARCH AND SURVEY
Statement of the Problem

Performance appraisal is a process of assessing, summarizing and developing the work
performance of an employee. In order to be effective and constructive, the performance
manager should make every effort to obtain as much objective information about the
employees performance as possible. Low performance can push the organization back in
todays tough competition scenario. The project is aimed in understanding the purpose of
performance appraisal in achieving corporate goals and how far it benefits to the
organization.
Purpose and Objective

The purpose of conducting the Survey in SOFTGAINZ was to know:
o How frequently is the appraisals are carried out in the organization?
o What is the method used for Performance Appraisal?
o Are the appraisers and appraises satisfied with the appraisal system carried out in
SOFTGAINZ LTD?
o How appraisals act as a tool for achieving corporate goals?
o What were the consequences, results and impact of the performance appraisals?
o What are the expectations of a Manager in doing a Performance Appraisal?
Study
The study was conducted in SOFTGAINZ LTD to know:
o To know the practical aspect of Performance Appraisal in SOFTGAINZ LTD
o To know the emphasis and importance given to employees performance and their
effect on corporate goals.
o To interview the managers on the performance appraisal format used by the company.
62
Research Methodology
The data source: Primary as well as Secondary
The research approach: Survey Method
The research instrument: Questionnaire
The respondents: The managers of various departments in SOFTGAINZ LTD.
The primary data was collected with the help of survey information. A concise questionnaire
was prepared keeping in mind the information specifications.
RATIONALE OF THE QUESTIONNAIRE

The questionnaire was designed to mainly have an idea of how Performance Appraisal is
carried out in SOFTGAINZ LTD. The form was also designed to know the views of the
managers in SOFTGAINZ LTD about the functioning of Performance Appraisal. It was
designed to know whether the managers and employees were satisfied with the functioning
of the Performance Appraisal. One of the reasons was also to know whether Performance
Appraisal is successful in achieving the corporate goals.
An explanation of each statement for which the Managers have rated
1. To know whether the Performance Appraisal helps the employee to have a clear
understanding of what is expected from his Manager.
2. To know how much does the Performance Appraisal successful in giving a clear joint
understanding of the appraisees job to both appraiser and appraisee.
3. To know whether the Performance Appraisal is helping the Manager to plan their work
well.
4. To determine whether the system provides a chance for the appraisee to communicate the
support he needs from his subordinate to perform the job well.
5. To see how far there is opportunity for self-review and reflection.
6. To know whether the Performance Appraisal encourage the appraiser and appraise to
have a common understanding of the factors.
7. To determine the opportunity the appraisal system provides in discussing the
expectations, achievements, failure, constraints and improvements required.
63
8. To know whether the appraisal system gives the opportunity to reflect and assess
appraisees personality and competences factor required.
9. To know whether the appraisal
performance review discussion.
system encourages open communication through
10. To know whether the appraisal system gives the appraise a chance to express his
developmental needs.
11. Does this appraisal system has the scope for correcting the biases of reporting officer
through review process?
12. Does the appraisal system strengthen the appraiser-appraisee relationship through
mutuality and trust?
13. Does it give insight to appraise regarding his strength or weakness?
14. Are the employees able to discover their potential?
15. Does the appraisal system provide a good communication between the top-management
plans and business goals to staff below?
16. Are the objectives of appraisal system clear to all employees?
17. Are there any periodic orientation programs to explain objectives and other details of the
appraisal system?
18. Are the data generated through appraisal system are objective indicators of individual
performance?
RECOMMENDATIONS
AND
CONCLUSION
64
Appraisals help in carrying out an overall performance evaluation of the persons engaged in
any organization. It is a method which gives sufficient information to the management so that
it can take necessary steps to improve them.
The personnels should be assessed on overall performance, which covers technical as well as
behavioral aspects. In order to effectively utilize the potential of our executives it is
important to identify the strength as well as the areas of development. These suggestions are
provided to all the questions that are ranking below 4 as those are the critical areas that
require to be looked into.
Serial
no.
Suggestions for Improvements
1)
According to the findings it is clear that appraisers and appraise cannot discuss
openly through performance review discussions. Communication is very essential
for any system to function efficiently. There should be a Performance review
Discussion that will allow the appraiser to express his problem as to why he is not
capable of achieving the target and the appraiser would be in a good position to
provide him the exact training he requires.
2)
Nobody is perfect yet it is human to try to be perfect. There are many obstacles
that hinder the development of an employee. Unless these development needs are
not expressed to the appraiser these obstacles cannot be eliminated hence the
Performance Appraiser should be conducted in a manner where the appraiser gets
the chance to express his development needs.
3)
Wherever there are favoritisms the real talented people will not get a chance to
develop, this in turn will demotivate him which result in disloyalty and inefficient
performance in the organization by that particular employee. Hence the companies
should be free from personal bias. The appraiser should be evaluated ethically.
65
4)
If the employers and the employees are not able to achieve the mutual that is
require than they will have a poor communication or may be sometimes a major
misunderstanding that will effect their performance and ultimately the entire
performance of the organization, therefore the appraiser should have full confident
in his employee and performance appraisal should be not more of monotonous
ritual but a way to develop mutuality and trust between each other
5)
If the goals of the individual are not in tune with the organizations goals of the
organization then there is a divergence in the functioning of both , the individual
and the organization. This will result in inefficient functioning and low
productivity in the organization. Hence Performance Appraisal System should be
in designed such a way that the organizations plan and goals are clear to the
employee and he fixes his goal in tune with the organization goals.
6)
Whenever any activity is conducted in an organization for which an employee has

to take off time from his daily routine, he is very reluctant to accept it. He will
accept it only if he knows that real reason as to why is that particular activity
conducted, hence the main objective of the company should be clear
7)
The objective of Performance Appraisal cannot be just given in an handbook or

said in just a mere communication it has to be conveyed through a proper Periodic
Orientation programs which makes a employer and employee well versed with the
objective and other details of the Appraisal system
8)
The data (ratings as well as other qualitative inputs) generated through appraisal
system should be objective indicators of individual performance or else there will
not be any meaning to the Performance Appraisal and the employee will not take it
seriously
Appendies
66
Questions for Appraisee
Name: ___________________________
Contact No: __________________________
1. What do you expect from a Performance appraisal :

(Rank the options from 1 to 6; 1 being most preferred & 6 being least preferred)
Detail
Rank
Salary Administration and Benefits

Determination of promotion or transfer
Decision on layoff
Assistance in goal
Guideline for training Plan
An insight into your strengths and weakness
2. Do you know what exactly is expected from you at work?

a. Yes
b. No
3. Are you satisfied with the appraisal system?
1
(1 = Least satisfied; 5 = Most satisfied)

4. Are you aware of performance ratings?
a. Yes
b. No
5. Do you think you should be given an opportunity to rate your own performance?
a. Yes
b. No
67
6. Are you given a chance to rate your own performance?
a. Yes
b. No
7. Timing of Appraisals
a. Monthly
b. Quarterly
c. Half Yearly
d. Annual
e. Anytime
8. Does the credibility of Appraiser affect the Performance Appraisal System?
a. Yes
b. No
9. Is there a complaint channel for the employees who are dissatisfied with the performance
appraisal system?
a. Yes
b. No
10. Are the standards on the basis of which the performance appraisal is carried out
communicated to the employees before hand?
a. Yes
b. No
11. Who conducts the performance appraisal?
a. Immediate supervisor
b. Peer appraisal
c. Rating committees
d. Self-rating
e. Appraisal by subordinates
12. Is the performance Appraisal successful in giving a clear understanding of the appraisees
job to both appraiser and appraise?
a. Yes
b. No
13. Are the objectives of appraisal system clear to you?
a. Yes
b. No

68
a. Yes
b. No
15. Do you want your comments and suggestions to be taken into consideration during
appraisal?
a. Yes
b. No
16. Is there a post appraisal interview conducted?
a. Yes
b. No
Questions for Appraiser
Name: ___________________________
Contact No: __________________________
69
1. Is the Performance Appraisal helping you to plan your work well?
(1 = Least helpful; 5 = Most helpful)
2. Does the system provide you a chance to communicate the support you need from your
subordinate to perform the job well.
a. Yes
b. No
3. Which appraisal system is being employed in the company?

a. Assessment centre
b. MBO
c. BARS
d. 360 degree feedback
e. Balance scorecard
4. Performance Appraisal criteria
a. Quantitative outcome criteria (Sales volume, Sales price, Productivity, Goal
accomplishment rate)
b. Qualitative process criteria (Quality of product or service, Customer satisfaction)
c. Quantitative process criteria (Efficiency, Cost/expenses, Attendance)
d. Qualitative process criteria (Judgment, Work attitude, Leadership, Conduct
/Trait)
5. Timing of Appraisals
a.
b.
c.
d.
e.
Monthly
Quarterly
Half Yearly
Annual
Anytime
6. What do you think is the effect of a poor appraisal system

a.
De-motivation
70
b.
c.
Retention
Ineffective teamwork

a. Yes
b. No
8. Does it give insight to appraisee regarding his strength or weakness?
a. Yes
b. No
9. Are employees comments and suggestions taken into consideration before the appraisal?
a. Yes
b. No
10. Who conducts the performance appraisal

a. Immediate supervisor
b. Peer appraisal
c. Rating committees
d. Self-rating
e. Appraisal by subordinates
11. Is the performance Appraisal successful in giving a clear understanding of the appraisees
job to both appraiser and appraise?
b. Yes
b. No
12. Are the standards on the basis of which the performance appraisal is carried out
communicated to the employees before hand?
a. Yes
b. No
13. Do you give an opportunity to the appraisee to rate his own performance?
a. Yes
b. No
14. Do you act upon the results of your performance appraisal?
a. Yes
b. No
71
7. BIBLIOGRAPHY
BOOKS
Human Resource and Personnel Management by K.Ashwathappa.S

Personnel Management by C.B.Mamoria and S.V.Gankar
Organization Behaviour by Steve Robbins
Managing Performance Appraisal by Lesley Myland
72
WEBSITES
www.ask.com
www.google.com
www.SAFEEXPRESS.com
www.wikipedia.com
www.kclblog.com
www.appraisals.naukrihub.com
73

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Performance appraisal

When Performance Appraisals are conducted

Improving the ability of the jobholder;

Monitoring performance in a cost-effective manner, to ensure that previously agreed

Performance appraisal is a process of evaluating the performance and qualities of an employee in

DEFINITIONS OF PERFORMANCE APPRAISAL

OBJECTIVES OF PERFORMANCE APPRAISAL

Removing Work Alienation and Discontent:

Manpower Planning and Job Content:

Human Resource Planning

Motivation and Satisfaction

Training and Development

Recruitment and Induction

THE CRITICAL ELEMENTS OF PERFORMANCE APPRAISAL

2. Managerial and behavioral qualities

A good performance system to be valid must be:

PURPOSE OF PERFORMANCE APPRAISAL

Why you do performance appraisal? Purpose of performance appraisal includes elements as

3. Administrative Uses of Performance appraisal

7. Documentation use of Performance appraisal

COMPARING THE ACTUAL

ESTABLISHING PERFORMANCE STANDARDS

COMMUNICATING THE STANDARDS

MEASURING THE ACTUAL PERFORMANCE

Purpose of Performance review

Translate organizations mission into specific achievable goals

Manage performance rather than react to it

Provide written acknowledgment of completed work

Gain new information and ideas from staff

Discuss skill and career development

Protect organization from unfounded charges of discrimination

Reduce stress for the supervisor -- managing rather than reacting

Reduce stress for the employee -- what is expected is made clear

SIGNIFICANCE OF PERFORMANCE REVIEW

CONDUCTING A PERFORMANCE REVIEW

METHODS OF PERFORMANCE APPRAISAL

Methods of Performance Appraisal

Human resource accounting

2. Graphic rating scale

5. Critical incidents Appraisal

6. Work Standards Approach

Paired-Comparison Ranking: This technique is probably just as accurate as alternation

10. Performance Tests and Observations

11. Confidential report

Four Steps in the MBO Process

3. 360 degree Performance Appraisal

Steps involved in 360 degree appraisal:

4. Human resource accounting method

2. Problem of Leniency or Strictness

6. Fear of Spoiling Relations

7. Evaluate performance not person

10. Latest Behaviour Effect

APPRAISE THE PERFORMANCE

Performance measurement needs to be based on the benchmarks listed above. These

to change behavior of employees whose performance does not meet organizational

To maintain the behavior of employees who perform in an acceptable manner and

to recognize superior performance behaviors so that they will be continued.

GUIDELINES FOR EFFECTIVE APPRAISAL INTERVIEW

Select a good time

Welcome, set at ease

Start with something positive

Ask open ended questions to encourage discussion

Manage eye contact and body language

Rate behavior, not personality