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About Performance appraisal

Meaning Meaning


Process of Performance Appraisal


Methods / Techniques of Performance Appraisal



Issues in Performance Appraisal

Advantages of Performance Appraisal

Disadvantages of Performance Appraisal

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According to Newstrom, “It is the process of

evaluating the performance of employees, sharing

that information with them and searching for ways to

improve their performance’’.

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Performance appraisal is the step where the

management finds out how effective it has been at

hiring and placing employees .

A “Performance appraisal” is a process of

evaluating an employee’s performance of a job in

terms of its requirements.

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Objectives of Performance Appraisal

Employee Organization

measuring the efficiencymaintaining

organizational control.

concrete and tangible

particulars about their

workassessment of


mutual goals of the

employees & the organization.growth & developmentincrease harmony &

enhance effectiveness

Personal development work satisfaction involvement in the organization.

According to:

Aims at:

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yPrevious Next

Setting performance

standardsTaking correctivestandards


Comparing standards




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1. Paired comparison

2. Graphic Rating scales

3. Forced choice Description


4. Forced Distribution Method

5. Checks lists

6. Free essay method

7. Critical Incidents

8. Group Appraisal

9. Field Review Method

10.Confidential Report


1. Assessment Center

2. Appraisal by Results or

Management by


3. Human Asset


4. Behaviorally Anchored

Rating scales

Traditional Methods Modern Methods

Methods of Performance Appraisal

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As compared to A B C As compared to A B C

A + - +

B - + -

C + - +

For the Trait “Quality of work”

A - + +

B + - +

C + + -

As compared to A B CAs compared to A B C

For the Trait “Creativity”







+ +-




- -

- -

Person rated Person rated

Ranking employees by paired comparison Method

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• Paired-comparison Approach: A performance appraisal that measures the relative performance of employees in a group.– This is a method of performance evaluation that results in

a rank ordering of employees to come up with a best employee.

– This type of approach measures the relative performance of employees in a group.

Paired-comparison Approach

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• Employees are ranked by comparing the first two employees on the list. – The supervisor places a check mark next to the name

of the employee whose performance is better. – The process is repeated, comparing the first

employee’s performance with that of the other employees.

– Then the supervisor compares the second employee on the list with all the others, and so on until each pair of employees has been compared.

– The employee with the most check marks is considered the most valuable.

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• The paired-comparison approach is appropriate when the supervisor needs to find one outstanding employee in a group for a promotion or special assignment. – The fact that paired comparison makes

some employees look good at the expense of others makes this technique less useful as a method of providing feedback to individual employees.

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Graphic or Linear Rating Scales Attitude

No interestIn work: consistentcomplainer

No interestIn work: consistentcomplainer

Careless: In-differentInstructions

Careless: In-differentInstructions

Interested in work: Accepts opinions & advice of others

Interested in work: Accepts opinions & advice of others

Enthusiastic about job & fellow-workers

Enthusiastic about job & fellow-workers

Enthusiastic opinions & advice sought by others

Enthusiastic opinions & advice sought by others


Take decisions in consultation with others whose views he values

Take decisions in consultation with others whose views he values

Slow to take decisions

Slow to take decisions

Take decisions after careful consideration

Take decisions after careful consideration

Takes decisions promptly

Takes decisions promptly

Take decisions without consultation

Take decisions without consultation

0 5 10 15 20

0 5 10 15 20

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Criteria Rating

1.Regularity on the job Most Least

Forced choice method

•Always regular•Inform in advance for delay•Never regular•Remain absent•Neither regular nor irregular

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Forced-Choice Approach

• Forced-choice Approach: A performance appraisal that presents the appraiser with sets of statements describing employee behavior; the appraiser must choose which statement is most characteristic of the employee and which is least characteristic.

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• This type of appraisal form gives the supervisor sets of statements describing employee behavior. – For each set of statements, the supervisor must select the

one that is most and the one that is least characteristic of the employee.

• These questionnaires prevent the supervisor from saying only positive things about employees. It is used when an organization finds that supervisors have been rating an unbelievably high proportion of employees as above average.

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No. of employees

10% 20% 40% 20% 10%

poor Belowaverage

average good Excellent

Force distribution curve

Forced distribution method

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Staff AppraisalName . . . . . . . Job Title . . . . . . . Department . . . . . . . . . . . . Date of Review . . . . . . . Age . . . . . .. . Years in present jobSection I Appraisal Of Performance

Note to Appraiser1.Appraisal must cover the period of the preceding 12 months2.Consideration to every function & responsibility of the job3.An objective factual assessment of an employee’s improvement or deterioration

Section II Promotability & Potential

Promotability1.Promotion now2.Within 2 years3.Within 5 years4.Unlikely to qualify for promotion

Section III Career Development

Section IV Notes on Interview with employee

Section V Comments on & Endorsement by Reviewing Authority

Specimen of Staff Assessment Form [Descriptive Essay Type]

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Ex: A fire, sudden breakdown, accident

Workers Reaction scale

A Informed the supervisor immediately 5

B Become anxious on loss of output 4

C Tried to repair the machine 3

D Complained for poor maintenance 2

E Was happy to forced test 1

Critical Incident method

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Critical-Incident Appraisal

• Critical-incident Appraisal: A performance appraisal in which the supervisor keeps a record of incidents that show positive and negative ways the employee has acted; the supervisor uses this record to assess the employee’s performance.

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• To conduct a critical-incident appraisal, the supervisor keeps a written record of incidents that show positive and negative ways in which the employee has acted. – The record should include dates, people involved,

actions taken, and any other details that are relevant. – At the time of the appraisal, the supervisor reviews the

record to reach an overall evaluation of the employee’s behavior.

– During the appraisal interview, the employee has a chance to respond to each of the incidents recorded.

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• The advantage of this method is that it focuses on actual behaviors. – However, the recordkeeping is time-consuming,

and since negative behaviors are more likely to be recorded than positive behaviors, it can be overly harsh.

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• Work Standards Approach: A performance appraisal in which the appraiser compares the employee’s performance to objective measures of what an employee should do.– This type of appraisal requires the supervisor to establish

objective measures of performance. • A typical work standard would be the quantity produced by an

assembly-line worker. • The supervisor then compares the employee’s actual

performance with the standards. • This approach works best with production workers.

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Performance subordinate peers superior customerDimension

Leadership ^ ^

Communication ^ ^

Interpersonal skills ^ ^

Decision making ^ ^ ^

Technical skills ^ ^ ^

Motivation ^ ^ ^

Field review method

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Group appraisal method

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MBO Process

Set organizational goalsDefining performance targetPerformance reviewfeedback

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Management by Objectives (MBO)

• In organizations where MBO is used to set goals and objectives for employees, the supervisor will use this approach for performance appraisal also. – The appraisal is based on whether or not the employee has

met his or her objectives. – The advantage is that employees know what to expect. – The supervisor focuses on results rather than more

subjective criteria.

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Performance Points Behavior

Extremely good

7 Can expect trainee to make valuable suggestions for increased sales and to have positive relationships with customers all over the country.

Good 6 Can expect to initiate creative ideas for improved sales.

Above average

5 Can expect to keep in touch with the customers throughout the year.

Average 4 Can manage, with difficulty, to deliver the goods in time.

Below average 3 Can expect to unload the trucks when asked by the supervisor.

Poor 2 Can expect to inform only a part of the customers.

Extremely poor

1 Can expect to take extended coffee breaks & roam around purposelessly.

Behavioral Anchored Rating Scales

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360 degree performance appraisal

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These companies are using 360 Degree Performance Appraisal Method

Examples of 360 degree performance appraisal method

WiproInfosysReliance Industries

Maruti UdyogHCL TechnologiesWyeth Consumer Health (WCH)

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Issues in appraisal system

Appraisal Design

Formal and informal

Whose performance?

Who are the raters?

What problems?

How to solve?

What to evaluate?

When to evaluate?

What methods?

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check induces employee to perform


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