EMPLOYEE PERFORMANCE APPRAISAL

Definition

Performance Appraisal is the process of obtaining, analyzing and recording information

about the relative worth of an employee.

In words of Wayne Cascio,” Performance appraisal is the systematic description of an

employee’s job relevant strengths and weaknesses.”

According to Michael Crino, defines” Performance appraisals is the process of

assessing quantitative and qualitative aspects of an employees job performance”

According to Flippo, "performance appraisal is the systematic, periodic and an impartial

rating of an employee’s 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.

Self-appraisal and potential appraisal also form a part of the performance appraisal
processes.

Focus

The focus of the performance appraisal is measuring and improving the actual
performance of the employee and also the future potential of the employee.
 OBJECTIVES OF PERFORMANCE APPRAISAL:

• To review the performance of the employees over a given period of time.

• To judge the gap between the actual and the desired performance.

• To help the management in exercising organizational control.

• Helps to strengthen the relationship and communication between superior –

subordinates and management – employees.

• To diagnose the strengths and weaknesses of the individuals so as to identify the

training and development needs of the future.

• To provide feedback to the employees regarding their past performance.

• Provide information to assist in the other personal decisions in the organization.

• Provide clarity of the expectations and responsibilities of the functions to be

performed by the employees.

• To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

• To reduce the grievances of the employees.

 PROCESS OF PERFORMANCE APPRAISAL

Establishing Performance Standard

The first step in the process of performance appraisal is the setting up of the standards
which will be used 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 degree of their contribution to the organizational
goal and objectives. The standards set should be clear, easy, understandable and in
measurable term. 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 them. This will help them to understand their
roles and to know what exactly is expected from them. The standard 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 evaluator.

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.

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.

METHODS OF PERFORMANCE APPRAISAL

The most popular methods used in the performance appraisal process include the
following:

Behaviorally Anchored Rating Scales

Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which

combines the graphic rating scale and critical incidents method. It consists of
predetermined critical areas of job performance or sets of behavioral statements
describing important job performance qualities as good or bad (for eg. the qualities like
inter personal relationships, adaptability and reliability, job knowledge etc). These
statements are developed from critical incidents. In this method, an employee’s actual
job behavior is judged against the desired behavior by recording and comparing the
behavior with BARS. Developing and practicing BARS requires expert knowledge.

360 degree feedback

Also known as 'multi-rater feedback', is the most comprehensive appraisal where the
feedback about the employees’ performance comes from all the sources that come in
contact with the employee on his job.
360 degree respondents for an employee can be his/her peers, managers (i.e.
superior), subordinates, team members, customers, suppliers/ vendors - anyone who
comes into contact with the employee and can provide valuable insights and information
or feedback regarding the "on-the-job" performance of the employee.

360 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 performance 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.

Self assessment is an indispensable part of 360 degree appraisals and therefore 360
degree Performance appraisal have high employee involvement and also have the
strongest impact on behavior and performance. It provides a "360-degree review" of the
employees’ performance and is considered to be one of the most credible performance
appraisal methods.

360 degree performance appraisal is also a powerful developmental tool because when
conducted at regular intervals (say yearly) it helps to keep a track of the changes others’
perceptions about the employees. A 360 degree appraisal is generally found more
suitable for the managers as it helps to assess their leadership and managing styles.
This technique is being effectively used across the globe for performance appraisals.
Some of the organizations following it are Wipro, Infosys, and Reliance Industries etc.

Management by Objectives (MBO)

The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in
1954. It can be defined as a process whereby the employees and the superiors come
together to identify common goals, the employees set their goals to be achieved, the
standards to be taken as the criteria for measurement of their performance and
contribution and deciding the course of action to be followed.

The essence of MBO is participative goal setting, choosing course of actions and
decision making. An important part of the MBO is the measurement and the comparison
of the employee’s actual performance with the standards set. Ideally, when employees
themselves have been involved with the goal setting and the choosing the course of
action to be followed by them, they are more likely to fulfill their responsibilities.

The MBO Process

 Pre-requisites for Effective & Successful Performance Appraisal
MONISH

The essentials of an effective performance system are as follows:

 Documentation – means continuous noting and documenting the performance. It

also helps the evaluators to give a proof and the basis of their ratings.

 Standards / Goals – the standards set should be clear, easy to understand,

achievable, motivating, time bound and measurable.

 Practical and simple format - The appraisal format should be simple, clear, fair
and objective. Long and complicated formats are time consuming, difficult to
understand, and do not elicit much useful information.
 Evaluation technique – An appropriate evaluation technique should be selected;
the appraisal system should be performance based and uniform. The criteria for
evaluation should be based on observable and measurable characteristics of the
behavior of the employee.

 Communication – Communication is an indispensable part of the Performance

appraisal process. The desired behavior or the expected results should be
communicated to the employees as well as the evaluators. Communication also plays
an important role in the review or feedback meeting. Open communication system
motivates the employees to actively participate in the appraisal process.

 Feedback – The purpose of the feedback should be developmental rather than

judgmental. To maintain its utility, timely feedback should be provided to the employees
and the manner of giving feedback should be such that it should have a motivating
effect on the employees’ future performance.

 Personal Bias – Interpersonal relationships can influence the evaluation and the
decisions in the performance appraisal process. Therefore, the evaluators should be
trained to carry out the processes of appraisals without personal bias and effectively.

Challenges Of Performance Appraisal

Determining the evaluation criteria- Identification of the appraisal criteria is one of

the biggest problems faced by the top management. The performance data to be
considered for evaluation should be carefully selected. For the purpose of evaluation,
the criteria selected should be in quantifiable or measurable terms

Create a rating instrument- The purpose of the Performance appraisal process is to

judge the performance of the employees rather than the employee. The focus of the
system should be on the development of the employees of the organization.
Lack of competence- Top management should choose the raters or the evaluators
carefully. They should have the required expertise and the knowledge to decide the
criteria accurately. They should have the experience and the necessary training to carry
out the appraisal process objectively.

Errors in rating and evaluation- Many errors based on the personal bias like
stereotyping, halo effect (i.e. one trait influencing the evaluator’s rating for all other
traits) etc. may creep in the appraisal process. Therefore the rater should exercise
objectivity and fairness in evaluating and rating the performance of the employees.

Resistance-The appraisal process may face resistance from the employees and the
trade unions for the fear of negative ratings. Therefore, the employees should be
communicated and clearly explained the purpose as well the process of appraisal. The
standards should be clearly communicated and every employee should be made aware
that what exactly is expected from him/her.

FEEDBACK

Definition

The return of a portion of the output of a process or system to the input, especially when
used to maintain performance or to control a system or process.Performance appraisal
is always followed by a feedback about your appraisal and performance. The outlook
towards the feedback session is different with people. Gracefully accepting feedback to
become a powerful person is wise, provided you agree with it. If you are uncomfortable
in getting opinion from other people, it is best to change about the way you feel.
Performance feedback helps companies and their employees understand how they are
doing and where they can improve. Much of the time it is geared toward employees, but
sometimes it is used to gauge how a company is doing overall. Performance feedback
should be focused and encourage dialogue. It can be positive or negative, and is often
expressed in a variety of ways. Performance feedback is actually given informally on a
continuous basis.

Principles for Giving Feedback

1. Put it in writing. Feedback is most effective when it is written down. Having it in

writing increases the chances that it will be understood. For example, Angela could
simply note the dates and times she is available and hand it to Steve. She could also
write “by 5 P.M. today” at the top.

2. Be sensitive to people’s feelings. Some managers think they don’t need to worry
about the employee becoming upset. They think that as the boss, they have the right to
tell people what to do and not worry about their feelings. This is a big mistake. Being
concerned about other people’s feelings is important in any situation. Effective
managers demonstrate concern for the self-esteem of their team members. This doesn’t
mean withholding criticism or ignoring problems.

3. Focus on your entire team, not just the new members. New employees are not the
only ones who need performance feedback. All employees need ongoing feedback.

4. Feedback should be as specific as possible. People have a difficult time responding

to instructions that are vague and unclear. It is important to check for understanding;
avoid assuming that you are on the same wavelength.

5. Think it through. Always take the time to plan what you want to say before giving
feedback. Taking the time to gather your thoughts and clarify what you want your
feedback to accomplish increases the chances that you will communicate clearly.
6. Ask first. Get the employee’s point of view before you state what you think should be
done. People are more receptive when they have a chance to explain themselves first.
You might also learn something unexpected that will explain the situation or change
your point of view.

7. Don’t withhold. It is not a good idea to hold back your negative observations when
employees are new. You don’t want to criticize too much and cause them to feel
discouraged, but remember that people need to know how they are doing.

8. Follow up. If you see that the employee corrected a problem situation, you still need
to follow up. When you follow up, you are telling employees that you are being thorough
and that the work is important.

Steps for Giving Feedback

1. Describe the situation.

2. Ask the employee for his or her view of the situation.

3. Come to an understanding of the situation.

4. Develop an action plan to resolve the situation.

5. Agree to follow up later to make certain the situation has been resolved.

Types of Feed Back

Verbal
Verbal communication is important. Managers who consistently offer clues about
performance throughout an employee’s work day need to combine verbal feedback with
individual discussions, clarifying expectations in a professional office setting. This will
encourage communication between both parties. Verbal performance feedback takes
place between consumers and the businesses they frequent. Customers frequently
make comments about service and products. Their performance feedback can be
positive or negative.

Visual
Presentations, award ceremonies and bonuses are types of visual performance
feedback. They can be used as tools to improve employee performance, promote
incentive programs and acknowledge a job well done. Visual performance feedback
demonstrates an awareness of the effort employees extend when performing their jobs.
It is an opportunity to share expectations with larger groups or be personable with single
employees. Consumers give tips for good service. They send holiday greetings to
doctors, teachers and mechanics. Visual performance feedback from consumers is
important, as it provides insight into how companies can improve public relations.

Written
There are different types of written feedback. It can be as simple as a sticky note left in
an obvious spot, or it can be a pile of paperwork with terse demands and comments.
Written performance feedback can be incorporated in daily email exchanges, attached
to work documents with a simple “Thanks,” or it can be a text message reminder to a
scattered employee working in the field.
Written performance feedback takes the form of notes sent to teachers and grades on
projects. Consumers join Internet forums, take surveys and start blogs to share their
opinions about products and services with the world. Written performance feedback can
be as simple as a private note, or as extensive as a campaign to promote a product
recall or shut down a poorly operated company.

Reviews
Reviews usually combine verbal, visual and written methods of performance feedback.
Reviews are often reciprocal in nature, giving employees a chance to share positive and
negative aspects of the job. They offer an opportunity to define and acknowledge
challenges and successes, clarifying methods of success for future reference. Annual
reviews are common, but weekly and monthly reviews help employees and supervisors
stay on task through extensive communication.
Individuals perform product, book, movie and company reviews all the time. Many of
them start websites or blogs to promote their favorite items, while others participate in
consumer alerts. News stations create segments helping consumers take action against
business owners when necessary. News stations also highlight good companies,
partnering with their causes and recognizing their achievements.

On the part of the person receiving the feedback, the following points are important to
be taken care of:

• The employee should have a positive attitude towards the feedback process

• He should listen to the suggestions of the appraiser calmly and try to incorporate
them in his plans.

• He should not hesitate to ask for the help of his superiors.

• Should have a co-operative attitude during the feedback meeting.

• Don’t judge the appraiser as a person.

• Should take the feedback objectively.

• Should not judge the appraiser as a person on the basis of the feedback.

On the part of the appraiser or the manager / person giving the feedback, the following
points are to be taken care of:

• The appraiser should make the receiver feel comfortable during the feedback
meeting.

• The appraiser should make it a two – way conversation i.e. let the employee
speak.

• Listen to the employee and note his points, suggestions, problems etc.

• The appraiser should not adopt a confrontational approach towards the meeting.
The goal is not to criticize the employee.
 • Provide a constructive feedback to the employee i.e. in a way which will motivate
him to perform better.

• Have a positive attitude towards the process

• Try to understand the reasons of his failure.

• Be fair and objective

Consequences of Not Giving Effective Feedback

Let’s take a look at some typical examples of what goes on in work environments when
managers don’t give good feedback.

Example #1: John has been working at his new job for one month. On his first day at
work, Wilma, his boss, showed him what to do and got him started on a project. Since
then, Wilma has communicated with him mostly through voice mail and e-mail. She
walks past his cubicle and says hello a few times each day, but there hasn’t been much
other communication. John is assuming he is doing his job properly, but he really isn’t
sure.

Analysis: There is no feedback here. John has no idea whether he is doing his job
properly.

Solution: Wilma should have given John a detailed job description on the first day. She
should have gone over his first project as soon as he finished it, making certain he
understood the task and completed it properly. She also should have checked in with
him regularly to make certain he was doing his job correctly and to see whether he had
any questions.

Example #2: Stella works in an office. Yesterday, she spent several hours filing a huge
stack of folders that her boss had given her in the morning. When she got to work today,
her boss came over to her desk and yelled, “Stella! You did those files all wrong! Don’t
you listen?” He said it so loudly that Stella’s three office mates turned toward her in
shock. He went back into his office and slammed the door.
Analysis: This manager’s behavior is abusive. It lowers her self-esteem and frightens
her coworkers. An atmosphere of fear also lowers productivity and encourages
sabotage and turnover.

Solution: He should have delivered the feedback calmly and in private. He should also
have asked her for her understanding of the task; perhaps there was a reason for it
being done the way it was. Third, he should have been specific about what she did
wrong.
Learning Input and Suggestions:

Performance appraisal helps motivate people to deliver superior performance in several

ways.

Performance appraisal encourages employees to avioud being stigmatized as inferior

performance.

It is also commonly used to make sure that every member of the organisation sets and
achieves effective goals.

Managers are expected to be good coaches to their team members and mentors to their
protégés thus Performance Appraisal helps to identifies the areas where coaching is
necessary and encourages managers to take an active coaching role.

Not every one meets the organisation's standards. Performance appraisal forces
mangers to confront those whose performance is not meeting the company's
expectations.

If the performance appraisal procedure includes a requirement that individual

development plans be determined and discussed, individuals can then make good
decisions about the skills and competencies they need to acquire to make a greater
contribution to the company. As a result they increase their chances of promotion and
lower their odds of layoff.

To increase efficiency and the productivity level every organization believes in giving
regular feedback to the employees on the basis of their performance.
Analysis

 Give employees feedback on performance

 Identify employee training needs

 Document criteria used to allocate organizational rewards

 Form a basis for personnel decisions on salary increases, promotions,

disciplinary actions, bonuses, etc

 Provide the opportunity for organizational diagnosis and development

 Facilitate communication between employee and administration

 To improve performance through counseling, coaching and development