Performance appraisal

. Performance:- Doing something successfully by using skills, knowledge and motivation or Outcomes,
results or accomplishments

Appraisals are judgments of the characteristics, traits and performance of others. On the basis of
these judgments we assess the worth or value of others and identify what is good or bad.
A “Performance appraisal” is a process of evaluating an employee’s performance of a job in
terms of its requirements
Informal appraisals: ongoing basic within the organization

Formal appraisals: occurrence at certain intervals throughout that person’s history of employment

Definitions:
Dale S. Beach, "Performance appraisal is systematic evaluation of the individual with respect to his or
her performance on the job and his or her potential for development".

According to Edwin B Flippo, “Performance appraisal is a systematic, periodic and an impartial rating
of an employee's excellence in matters pertaining to his present job and to his potentialities for a better
job.”

Objectives of Performance Appraisal

Work Related objective
i. To assess the work of employee in relation to job requirements
ii. To improve efficiency
iii. To carry out job evaluation

Career Development objective

i. To access the strong and weak points in the working of the employees and finding
remedies for weak points through training.
ii. To determine career potential
iii. To plan promotions , transfer , lay off, etc of the employee
iv. To plan career goals

Organisational Objectives
i. To serve as a basis for promotion or demotion
ii. To serve as a basis for planning suitable training and development programmes
iii. To serve as a basis for transfer or termination in case of reduction in staff strength
Communication
i. To provide feedback employees so that they come to know where they stand and can
improve their job performance.
ii. To provide coaching , counseling career planning, and motivation to employee
iii. To develop positive superior subordinate relation and there by reduce grievances.

Benefits of Performance Appraisal

Individual
• Objectives can be established in relation the whole organization

• Key results and timescale can be established

• Can compare past performance and future activities against standards

• Can be known pay on the basis of performance

Organization
• Suitable promotion candidates can be identified

• Areas of improvement can be seen

• Communication is improved

• Basis for medium to long term HR planning

Process of performance appraisal

Establishing Performance Standards :- In this we use as the base to compare the actual performance of
the employees. In this step it requires to set 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. If employee doesn't
come up to expectance, then it should be taken extra care for it.

Communicating the standards:- 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. This will help them to understand their roles and to know what exactly is
expected from them.

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 nonstop process which involves monitors the performance all over the
year. This stage requires the watchful selection of the suitable techniques of measurement, taking care
that individual bias does not affect the outcome of the process and providing assistance rather than
interfering in an employees work.

Comparing the Actual with the standard Performance:- In this 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 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 either to improve the performance of the
employees, take the required corrective actions, or the related HR decisions like rewards,
promotions, demotions, transfers etc.

Performance Appraisal Rating Factors

GENERAL

1. Adaptability
Efficiency with which employee works under stress and responds to change.

o Receptive to change/new ideas

o Shows poise and/or courtesy in tough situations
o Demonstrates ability to modify behavioral style and approach to goal
2. Assertiveness/Motivation
Degree to which the employee pursues goals with commitment and takes pride in
accomplishment.

o Takes initiative eagerly

o Demonstrates orientation to achieve results
o Behavior reflects a desire to excel on the job
o Works steadily and actively
o Demonstrates self-confidence and positive attitude towards self and others
3. Attendance
The extent to which the employee can be depended upon to be available for work and to
fulfill position responsibilities.
o Reports to work on time
o Communicates schedule changes promptly to supervisor
o Maintains regular attendance
4. Communication
The extent to which the employee effectively listens, conveys and receives ideas,
information and direction.

o Seeks to clarify and confirm the accuracy of their understanding of unfamiliar or

vague terms and instructions
o Makes oral and written communication clear and easy to understand
o Assesses and takes steps to improve ability to communicate (written and verbal)
so ideas and consultations are conveyed with precision and efficiency
5. Creativity
Extent to which employee generates workable and innovative ideas, concepts and
techniques.

o Attempts to simplify and/or improve procedures and techniques

o Initiates new and creative ideas or procedures to enhance the department or
organization
 o Looks for new solutions to old problems
6. Customer Focus
The degree to which the employee takes the initiative to meet internal and external
customer needs in a timely and courteous manner.

o Examines customer requests to properly identify and resolve customer concerns

o Supports customer service efforts through program design, implementation,
recovery and follow-up
7. Customer Service

o Serves customers in a manner that increases their confidence and knowledge to

resolve their own problems
o Acknowledges shortcomings when appropriate
o Reaffirms commitment to professional service
o asking probing questions that elicit the facts and help the customer through some
of the decision-making process
o Responds to customer requests on contact date or within 24 hours
8. Dependability/Initiative
The extent to which an employee effectively and enthusiastically accomplishes
assignments with minimal supervision.

o Independently contributes ideas and projects

o Adapts to change
o Follows-through on work assignments
o Demonstrates eagerness and positivism
o Shares ideas and suggestions
o Takes on new responsibilities
o Willing to assist co-workers

9. Job Knowledge
The demonstration of technical, administrative, managerial, supervisory, or other
specialized knowledge required to perform the job. Consider the degree of job knowledge
relative to length of time in the current position.

o Able to answer difficult questions

o Effectively learns new skills
o Maintains up-to-date job related information
10. Judgment
Ability to analyze problems or procedures, evaluate alternatives, and select best course
of action.

o Uses of logic and common sense in decision making

o Makes appropriate and consistent decisions
o Obtains and evaluates pertinent information to determine source of and alternative
solutions to problems
11. Initiative
The degree to which the employee independently performs and accomplishes
assignments.

o Requires minimal supervision

o Sees and acts upon opportunities
o Independently contributes ideas and projects
o Promptly undertakes problems and devises solutions
o Acts independently within established guidelines
12. Interpersonal Relations
The degree to which the employee shows understanding and sensitivity to needs and
problems of others.

o Actions are intended to calm, diffuse, and be helpful

o Interacts positively with a variety of people in different situations
o Accepts and acknowledges suggestions from others
o Works cooperatively and effectively with others to achieve unit goals
13. Management Skills
Extent to which employee demonstrates effective management abilities and overall
results.

o Effectively sets goals and establishes priorities

o Improves work methods
o Achieves expected results
o Plans and administers budgeted funds
o Implements cost-saving procedures, expense control, etc.

14. Planning & Organizing

The extent to which the employee plans, organizes and implements tasks or programs.

o Demonstrates effective use of time and facilities subject to their control

o Meets deadlines
o Maintains a clear grasp of daily tasks
o Prioritizes duties in a manner consistent with organizational objectives
o Effectively manages tasks or program assignments including follow-through and
delegation
15. Problem Solving & Decision Making
Degree to which employee demonstrates ability to clearly isolate, define and seek
solutions to problem areas.

o Effectively identifies & evaluates alternative solutions

o Makes decisions consistent with skills and experience
 o Recognizes decisions that have to be deferred until all pertinent facts are gathered
and analyzed
o Flexible in modifying decisions
16. Productivity
Degree to which the employee produces the expected quality and quantity of assignments.

o Attains conclusive measurable results

o Maintains control and work pace
o Completes assignments on time and to specifications
17. Quality of Work
The ability to set high standards for own personal performance; strive for quality work;
put forth extra effort to ensure quality work.

o Develops and implements new solutions, procedures and concepts

o Demonstrates accuracy, thoroughness, and reliability
o Shows organization and completeness
o Pays attention to detail
o Consistently delivers what is required when required
18. Quantity of Work
The volume of work produced by the employee, along with his or her speed, accuracy and
consistency of output.
o Accomplishes assigned work in an organized, timely manner
o Alerts appropriate team member if deadlines need to be re-negotiated to
accomplish work with higher priority
19. Resourcefulness
Consider the degree to which employee is a source of supply and support to the
department, customers, and/or the organization as a whole.

o Masters difficult situations in a timely and effective manner

o Answers questions and deals with problems effectively and thoroughly
20. Responsibility
The degree to which the employee demonstrates dependability in work performance.

o Completes work in a timely, capable and reliable manner

o Adheres to instructions
o Maintains regular attendance
21. Safety
Degree to which employee adheres to safety and health regulations.

o Maintains and observes safety and health standards

o Notifies others when violating safety and health regulations
22. Stress Tolerance
Degree to which employee's performance demonstrates stability under time and/or
interpersonal pressure and opposition.

o Demonstrates composure and good judgment in stressful situations

 o Maintains appropriate response and outcomes during encounters and/or periods of
high levels of pressure
23. Time Management
The ability to adhere to one's responsibilities in a timely manner.

o Meets deadlines
o Manages multiple tasks with accuracy and efficiency
24. Work Habits
The manner in which an employee conducts his or herself in the working environment.
o Displays professionalism
o Demonstrates effective time management skills
o Shows positive attitude
o Maintains regular attendance
o Meets productivity standards

TEAM BASED FACTORS

1. Consensus Building
The extent to which the employee builds and maintains work relationships and contacts
needed to effectively address problems and opportunities associated with their position.
o Actively resolves workplace conflicts
o Willingly undertakes assigned projects
o Supports organizational goals and endeavors
2. Teamwork
The degree to which the employee works well in a team setting.
o Interacts and exchanges idea
o Observes the abilities and ideas of fellow team members
o Works fairly and attempts to share an equal work-load with others
3. Working with Others/Cooperation
Extent to which employee works cooperatively with customers, co-workers and the
public.
o Gains confidence and trust of others
o Recognizes strengths and limitations of self and others
o Exhibits appropriate sensitivity to others' feelings
o Focuses on performance rather than personality in relating to others

SUPERVISORY FACTORS
1. Cost Effectiveness
Extent to which employee seeks best use of materials, equipment, and staff to maximize
efficiency and effectiveness.
o Uses effective materials to enhance department and/or job performance
o Establishes budget and/or functions within the budget
2. Development of Subordinates
Consider the employee's ability to effectively evaluate skills, knowledge, aptitudes,
interests and developmental needs bearing on individual and group work performance.
 o Develops and implements or assures appropriate training or development plans
and programs
o Provides appropriate support for employee to reach his/her potential and goals
3. Leadership
Consider the employee's ability to direct the operations, activity and performance of
others.
o Gives direction without conflict
o Creates environment that guides employees to accomplish unit and individual
goals
4. Performance Appraisals
o Provides informal performance feedback on a regular basis
o Acknowledges good performance and discusses performance problems
o Prepares precise written annual evaluations
5. Staff Development
Degree to which employee provides opportunities to challenge subordinate's capabilities
and develops the knowledge and skills necessary for career development.
o Identifies training programs to improve subordinate's performance
o Defines and communicates standards of performance and assists employees in
achieving these standards
o Encourages and supports staff participation in job related activities
6. Supervising Staff Relations
Consider the extent to which the employee effectively oversees and facilitates staff.
o Shows fairness and impartiality in interactions
o Demonstrates interest in employee welfare
o Elicits staff input where feasible
o Facilitates staff adaptability
o Anticipates staff problems and takes preventive measures
o Resolves disputes among employees
o Handles corrective discipline and employee grievances

Methods of Performance Appraisal

Traditional Methods Modern Methods

1. Paired comparison 1. Assessment Center

2. Graphic Rating scales
3. Forced choice Description method 2. Appraisal by Results or Management by
4. Forced Distribution Method Objectives
5. Checks lists
6. Free essay method 3. Human Asset Accounting
7. Critical Incidents
4. Behaviorally Anchored Rating scales
8. Group Appraisal
9. Field Review Method
10. Confidential Report
11. Ranking
https://sites.google.com/site/whatishumanresource/traditional-methods-of-performance-appraisal

360 Degree Performance Appraisal

360 - Degree Appraisal is a system or process in which employees receive confidential,
anonymous feedback from the people who work around them.
• 360 degree measures behaviors and competencies.
• 360 degree addresses skills such as listening, planning, and goal-setting.
• 360 degree focuses on subjective areas such as teamwork character, and leadership
effectiveness.
• 360 degree provides feedback on how others perceive an employee.

Degree appraisal has four integral components:

1. Self appraisal
2. Superior’s appraisal
3. Subordinate’s appraisal
4. Peer appraisal.

Self-appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his
achievements, and judge his own performance. Superior’s appraisal forms the traditional part of the 360
degree appraisal where the employees’ responsibilities and actual performance is rated by the superior.
Superior’s appraisal forms the traditional part of the 360 degree appraisal where the
employees’ responsibilities and actual performance is rated by the superior.
Subordinates appraisal gives a chance to judge the employee on the parameters like
communication and motivating abilities, superior’s ability to delegate the work, leadership qualities etc.
Also known as internal customers, the correct feedback given by peers can help to find employees’
abilities to work in a team, co-operation and sensitivity towards others.

Peer appraisal feedback given by peers can help to find employees’ abilities to work in a
team, cooperation and sensitivity towards others.

Advantages of 360 degree appraisal

 Offer a more comprehensive view towards the performance of employees.
 Improve credibility of performance appraisal.
 Such colleague’s feedback will help strengthen self-development.
 Increases responsibilities of employees to their customers.
 The mix of ideas can give a more accurate assessment.
 Opinions gathered from lots of staff are sure to be more persuasive.
 Not only manager should make assessments on its staff performance but other colleagues
should do, too.
 People who undervalue themselves are often motivated by feedback from others.
 If more staff takes part in the process of performance appraisal, the organizational culture
of the company will become more honest.

Disadvantages of 360 degree appraisal

 Taking a lot of time, and being complex in administration
 Extension of exchange feedback can cause troubles and tensions to several staff.
 There is requirement for training and important effort in order to achieve efficient
working.
 It will be very hard to figure out the results.
 Feedback can be useless if it is not carefully and smoothly dealt.
 Can impose an environment of suspicion if the information is not openly and honestly
managed
 720 Degree Performance Appraisal
Considered an “all-round” appraisal, the 720 degree performance appraisal gives an employee more than
feedback from one person.

This appraisal gives the employee a lot of feedback generally from anywhere from 5 to 8 people, to
provide the employee with an all round assessment of his or her on the job performance.

It provide for two round of feedback (a pre and post ) or a feedback approach which is done again after
nine to twelve months.

Needs for 720 System.

 Assessment system should be 360 degrees.
 Assessment should be done twice a year.
 Different assessments should be tabulated and compared for a given period.
 Ensure that the rating instruments are relevant, valid and reliable
 Treat employees with sensitivity and respect

WHY USE 720

This system is more development focused than performance alone, and supplements training and
development functions in a better way
Without these critical competencies, executives and managers are less likely to be able to lead these
organizations toward successful implementation of strategic changes.

A powerful developmental tool because when conducted at regular intervals it helps to keep a track of the
changes, others’ perceptions about the employees

Advantages
 Improved Feedback From More Sources
 Personal and Organizational
 Performance Development
 Responsibility for Career Development
 Improved Customer Service
 Training Needs Assessment

Disadvantage
 Exceptional Expectations for the Process
 Insufficient Training and Process Understanding
 Focus on Negatives and Weaknesses
 Rater Inexperience and Ineffectiveness
 Requires commitment of top management and the
 Human resources (time, financial resources etc)

How to get best performance appraisal from your boss?

1) Decode what's your job profile
A great place to start is a detailed list of job duties or, if it is available, an official job description,
from your manager or human resources department. It's better to start off with clarity as to what
you are expected to deliver. It will channelise your actions in that direction and get you
maximum output.

2) Engage yourself in the process

Be an active participant in establishing your goals from the start. Focus on key objectives and
define a plan that makes sense for you and your employer. Be engaged all along, it's a good and
helpful practice

3) Set reasonable goals

When establishing goals, make sure they are meaningful. There should be value in doing a
particular activity. Each goal must be relevant to the work you do each day and should be
mutually agreed upon by you and your manager. Also, going over-board with goals will only
impress your boss for that moment, remember. So sign up for goals which are reasonable, and
gives you a sense that you can achieve them.

4) View goals as a project plan

Make your goals your mission for the year. Keep goals current, track progress and contributions,
and update goals as appropriate to reflect any changes in your role or responsibilities. Remember
that although goals are set to achieve certain work-based objectives, they can also yield personal
rewards in the form of professional and developmental growth and greater earnings potential.

5) Take note of your work daily

No one pays closer attention to your work than you do. The annual performance review, and the
promotion or salary increase that often goes with it, can be enhanced significantly if you
highlight your accomplishments clearly and make a case for yourself.

So, as you work, document your accomplishments along the way and let your boss know when
you have reached established milestones. Good time don't stay always so, if you reach a
stumbling block along the way, seek advice on how to best resolve the issue.
6) Show an interest in additional training
If you don't have access to the tools or training necessary to achieve a particular objective, be
sure to ask. Your employer will see that you want to improve the quality of your work and are
interested in professional growth. Additional training will make you more valuable to the
organization and set you up for the next step in your career.
7)Talk to your boss on performance

Have an open dialogue with your boss throughout the year so you have a better sense of where
you stand and how your progress is being perceived. Don't leave all of this discussion for the
annual review.

Try to conduct brief, informal discussions throughout the performance review period. Taking
time to check shows your boss that you are interested in performing well and are working hard
toward achieving goals.

8) Share positive feedback Feedback from colleagues is also valuable when you are
preparing for a review. If someone sends you a thank you via e-mail or on paper, keep it on file.
If someone says something complimentary, ask him or her to put it in writing.

9) Utilise performance review feedback

When you get constructive feedback during a performance review, listen to it carefully and objectively. If
part of the feedback is difficult to hear, try not to appear defensive. Instead, take time to consider what
was said and try to make improvements in your work habits to avoid similar comments in the future.
Companies value employees who can accept professional guidance.
 Potential appraisal
Potential Appraisal is concerned with identify the potential of an employee for future
development and promotion in the organization.

The purposes of a potential review are:

1. to inform employees of their future prospects;

2. to enable the organisation to draft a management succession programme;
3. to update training and recruitment activities;
4. to advise employees about the work to be done to enhance .their career opportunities.

Techniques of potential appraisal:

1. Self – appraisals
2. Peer appraisals
3. Superior appraisals
4. MBO
5. Psychological and psychometric tests
6. Management games like role playing
7. Leadership exercises etc.

Difference between performance management and performance

apperisal
BASIS FOR PERFORMANCE
PERFORMANCE APPRAISAL
COMPARISON MANAGEMENT

Meaning Performance Appraisal, means the Performance Management is

analysis of an employee's the management of human
performance and their caliber for resources in an organization.
future growth and development.

What is it? It is a system. It is a process.

Nature Rigid Supple

Type of tool Operational Tool Strategic Tool

 BASIS FOR PERFORMANCE
PERFORMANCE APPRAISAL
COMPARISON MANAGEMENT

Owned by Human Resource Department Managers

Conducted Annually Continuously

Approach Individualistic Holistic

Focused on Quantitative Aspects Qualitative Aspects

Potential Appraisal Vs. Performance Appraisal

Potential Appraisal is forward looking process whether performance appraisal is
backward looking process. Any good or worse assessment results of performance
appraisal may not be a good factor for potential appraisal. But current performance of
an employee could show evidance somewhere whether he/she is flexible for new
working conditions.