performance app

7/23/2019 Performance App

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Performance Appraisal

A performance appraisal (PA), also referred to as a performance review, performance

evaluation, (career) development discussion, or employee appraisal is a method by which

the job performance of an employee is documented and evaluated. Performance appraisals are a

part of career development and consist of regular reviews of employee performance withinorganizations.

A performance appraisal is a systematic and periodic process that assesses an individual

employee’s job performance and productivity in relation to certain preestablished criteria and

organizational objectives. !ther aspects of individual employees are considered as well, such

as organizational citizenship behavior , accomplishments, potential for future improvement,

strengths and wea"nesses, etc.

Performance Appraisal Methods: Traditional and Modern Methods

#ach method of performance appraisal has its strengths and wea"nesses may be suitable for one

organisation and nonsuitable for another one. As such, there is no single appraisal methodaccepted and used by all organisations to measure their employees’ performance.

A more widely used classification of appraisal methods into two categories, viz., traditional

methods and modem methods, is given by $trauss and $ayles%. &hile traditional methods lay

emphasis on the rating of the individual’s personality traits, such as initiative, dependability,drive creativity, integrity, intelligence, leadership potential, etc.' the modem methods, on the

other hand, place more emphasis on the evaluation of wor" results, i.e., job achievements than

the personal trait odem methods tend to be more objective and worthwhile.

n the discussion that follows, each method under both categories will be described briefly.

Traditional Methods:

Ranking Method:

t is the oldest and simplest formal systematic method of performance appraisal in which

employee is compared with all others for the purpose of placing order of worth. *he employees

are ran"ed from the highest to the lowest or from the best to the worst.

n doing this the employee who is the highest on the characteristic being measured and also the

one who is + lowest, are indicated. *hen, the net highest and the net lowest between nethighest and lowest until all the employees to be rated have been ran"ed. *hus, if there are ten

employees to be appraised, there will be ten ran"s from - to -.

However the greatest limitations of this appraisal method are that:

(i) t does not tell that how much better or worse one is than another,

(ii) *he tas" of ran"ing individuals is difficult when a large number of employees are rated, and

https://en.wikipedia.org/wiki/Job_performance

https://en.wikipedia.org/wiki/Employee

https://en.wikipedia.org/wiki/Career_development

https://en.wikipedia.org/wiki/Organization

https://en.wikipedia.org/wiki/Organizational_citizenship_behavior

https://en.wikipedia.org/wiki/Employee

https://en.wikipedia.org/wiki/Career_development

https://en.wikipedia.org/wiki/Organization

https://en.wikipedia.org/wiki/Organizational_citizenship_behavior

https://en.wikipedia.org/wiki/Job_performance



(iii) t is very difficult to compare one individual with others having varying behavioural traits.

*o remedy these defects, the paired comparison method of performance appraisal has been

evolved.

Paired !omparison:

n this method, each employee is compared with other employees on one on one basis, usually based on one trait only. *he rater is provided with a bunch of slips each coining pair of names,the rater puts a tic" mar" against the employee whom he insiders the better of the two. *he

number of times this employee is compared as better with others determines his or her final

ran"ing.

"rading Method:

n this method, certain categories of worth are established in advance and carefully defined.

*here can be three categories established for employees/ outstanding, satisfactory and

unsatisfactory. *here can be more than three grades. #mployee performance is compared withgrade definitions. *he employee is, then, allocated to the grade that best describes his or her

performance.

$uch type of grading is done is $emester pattern of eaminations and in the selection of a

candidate in the public service sector. !ne of the major drawbac"s of this method is that the rater may rate most of the employees on the higher side of their performance.

#orced $istri%ution Method:

*his method was evolved by *iffen to eliminate the central tendency of rating most of the

employees at a higher end of the scale. *he method assumes that employees’ performance levelconfirms to a normal statistical distribution i.e., -,0,1,0 and - per cent. *his is useful for

rating a large number of employees’ job performance and promo ability. t tends to eliminate or

reduce bias.

t is also highly simple to understand and easy to apply in appraising the performance of

employees in organisations. t suffer from the drawbac" that improve similarly, no single grade

would rise in a ratings.

#orced&!hoice Method:

*he forcedchoice method is developed by 2. P. 3uilford. t contains a series of groups of

statements, and rater rates how effectively a statement describes each individual being evaluated.

4ommon method of forcedchoice method contains two statements, both positive and negative.

#ach statement carries a score or weight, which is not made "nown to the rater. *he humanresource section does rating for all sets of statements5 both positive and negative. *he final

rating is done on the basis of all sets of statements. *hus, employee rating in this manner ma"es

the method more objective. *he only problem associated with this method is that the actualconstructing of several evaluative statements also called 6forcedchoice scales’, ta"es a lot of

time and effort.



!heck&'ist Method:

*he basic purpose of utilizing chec"list method is to ease the evaluation burden upon the rater.

n this method, a series of statements, i.e., 7uestions with their answers in 6yes’ or 6no’ are prepared by the 89 department. *he chec"list is, then, presented to the rater to tic" appropriate

answers relevant to the appraisee. #ach 7uestion carries a weightage in relationship to their

importance.

&hen the chec"list is completed, it is sent to the 89 department to prepare the final scores for

all appraises based on all 7uestions. &hile preparing 7uestions an attempt is made to determine

the degree of consistency of the rater by as"ing the same 7uestion twice but in a different

manner.

8owever, one of the disadvantages of the chec"list method is that it is difficult to assemble,

analyse and weigh a number of statements about employee characteristics and contributions

:rom a cost stand point also, this method may be inefficient particularly if there are a number of job categories in the organisation, because a chec"list of 7uestions must be prepared for each

category of job. t will involve a lot of money, time and efforts.

!ritical ncidents Method:

n this method, the rater focuses his or her attention on those "ey or critical behaviours that ma"ethe difference between performing a job in a noteworthy manner (effectively or ineffectively).

*here are three steps involved in appraising employees using this method.

:irst, a list of noteworthy (good or bad) onthejob behaviour of specific incidents is prepared.

$econd, a group of eperts then assigns weightage or score to these incidents, depending upontheir degree of desirability to perform a job. *hird, finally a chec"list indicating incidents that

describe wor"ers as ;good% or ;bad% is constructed. *hen, the chec"list is given to the rater for

evaluating the wor"ers.

*he basic idea behind this rating is to apprise the wor"ers who can perform their jobs effectively

in critical situations. *his is so because most people wor" ali"e in normal situation. *he strength

of critical incident method is that it focuses on behaviours and, thus, judge’s performance rather

than personalities.

ts drawbac"s are to regularly write down the critical incidents which become timeconsuming

and burdensome for evaluators, i.e., managers. 3enerally, negative incidents are positive ones. t

is rater’s inference that determines which incidents are critical to job performance. 8ence, themethod is subject to all the limitations relating to subjective judgments.

"raphic Rating cale Method:

*he graphic rating scale is one of the most popular and simplest techni7ues for appraising

performance. t is also "nown as linear rating scale. n this method, the printed appraisal form isused to appraise each employee.



*he form lists traits (such as 7uality and reliability) and a range of job performance

characteristics (from unsatisfactory to outstanding) for each trait. *he rating is done on the basis

of points on the continuum. *he common practice is to follow five points scale.

*he rater rates each appraisee by chec"ing the score that best describes his or her performance

for each trait all assigned values for the traits are then totaled.

*his method is good for measuring various job behaviours of an employee. 8owever, it is also

subjected to rater’s bias while rating employee’s behaviour at job. !ccurrence of ambiguity indesign mg the graphic scale results in bias in appraising employee’s performance.

*ssay Method:

#ssay method is the simplest one among various appraisal methods available. n this method, therater writes a narrative description on an employee’s strengths, wea"nesses, past performance,

potential and suggestions for improvement. ts positive point is that it is simple in use. t does not

re7uire comple formats and etensive<specific training to complete it.

8owever, essay method, li"e other methods, is not free from drawbac"s. n the absence of any prescribed structure, the essays are li"ely to vary widely in terms of length and content. And, of

course, the 7uality of appraisal depends more upon rater’s writing s"ill than the appraiser’s actual

level of performance.

oreover, because the essays are descriptive, the method provides only 7ualitative informationabout the employee. n the absence of 7uantitative data, the evaluation suffers from subjectivity

problem. =onetheless, the essay method is a good start and is beneficial also if used in

conjunction with other appraisal methods.

#ield Review Method:&hen there is a reason to suspect rater’s biasedness or his or her rating appears to be 7uite higher

than others, these are neutralised with the help of a review process. *he review process is usually

conducted by the personnel officer in the 89 department.

The review process involves the following activities:

(a) dentify areas of interrater disagreement.

(b) 8elp the group arrive at a consensus.

(c) #nsure that each rater conceives of the standard similarity.

8owever, the process is a timeconsuming one. *he supervisors generally resent what theyconsider the staff interference. 8ence, the method is not widely used.



!onfidential Report:

t is the traditional way of appraising employees mainly in the 3overnment >epartments.

#valuation is made by the immediate boss or supervisor for giving effect to promotion andtransfer. ?sually a structured format is devised to collect information on employee’s strength

wea"ness, intelligence, attitude, character, attendance, discipline, etc. report.

Modern Methods:

Management %y +%,ectives (M-+):

ost of the traditional methods of performance appraisal are subject to the antagonistic judgments of the raters. t was to overcome this problem' Peter :. >ruc"er propounded a new

concept, namely, management by objectives (@!) way bac" in -B1 in his boo".

*he Practice of management. *he concept of @! as was conceived by >ruc"er, can be

described as a ;process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual’s major areas of responsibility in terms

of results epected of him and use these measures as guides for operating the unit and assessingthe contribution of each its members%.

n other words, stripped to its essentials, @! re7uires the manager to goals with each employeeand then periodically discuss his or her progress toward these goals.

n fact, @! is not only a method of performance evaluation. t is viewed by the Practicing

managers and pedagogues as a philosophy of managerial practice because .t .s a method bywh.ch managers and subordinates plan, organise, communicate, control and debate.

An @! programme consists of four main steps/ goal setting, performance standard, compari

son, and periodic review. n goalsetting, goals are set which each individual, s to attain. *hesuperior and subordinate jointly establish these goals. *he goals refer to the desired outcome to be achieved by each individual employee.

n performance standards, the standards are set for the employees as per the previously arranged

time period. &hen the employees start performing their jobs, they come to "now what is to be

done, what has been done, and what remains to be done.

n the third step the actual level of goals attained are compared with the goals agreed upon. *his

enables the evaluator to find out the reasons variation between the actual and standard

performance of the employees. $uch a comparison helps devise training needs for increasing

employees’ performance it can also eplore the conditions having their bearings on employees’ performance but over which the employees have no control.

:inally, in the periodic review step, corrective measure is initiated when actual performance

deviates from the slandered established in the first stepgoalsetting stage. 4onsistent with the@! philosophy periodic progress reviews are conducted in a constructive rather than punitive

manner.



*he purpose of conducting reviews is not to degrade the performer but to aid in his<her future

performance. :rom a motivational point of view, this would be representative of c3regor’s

theories.

'imitation of M-+:@! is not a panacea, cure for all organisational problems.

As with other methods it also suffers from some limitations as catalogued %elow:

(i) etting .n&measura%le +%,ectives:

!ne of the problems @! suffers from is unclear and unmeasurable objectives set for

attainment. An objective such as ;will do a better job of training% is useless as it is unmeasurable. nstead, ;well have four subordinates promoted during the year% is a clear and

measurable objective.

(ii) Time&consuming:

*he activities involved in an @! programme such as setting goals, measuring progress, and providing feedbac" can ta"e a great deal of time.

(iii) Tug of /ar:

$etting objectives with the subordinates sometimes turns into a tug of war in the sense that themanager pushes for higher 7uotas and the subordinates push for lower ones. As such, goals so set

are li"ely to be unrealistic.

(iv) 'ack of Trust:

@! is li"ely to be ineffective in an environment where management has little trust in itsemployees. !r say, management ma"es decisions autocratically and relies heavily on eternal

controls.

-ehaviourally Anchored Rating cales (-AR):

*he problem of judgmental performance evaluation inherent in the traditional methods of performance evaluation led to some organisations to go for objective evaluation by developing a

techni7ue "nown as ;@ehaviourally Anchored 9ating $cales (@A9$)% around -Cs. @A9$ are

descriptions of various degrees of behaviour with regard to a specific performance dimension.

t combines the benefits of narratives, critical incidents, and 7uantified ratings by anchoring a

7uantified scale with specific behavioural eamples of good or poor performance. *he

proponents of @A9$ claim that it offers better and more e7uitable appraisals than do the other

techni7ues of performance appraisal we discussed so far.

=ow, a @A9$ for one of these performance dimensions, namely, ;"nowledge and judgment% can

be developed. =otice how the typical @A9$ is behaviourally anchored with specific critical

incidents.



@A9$ method of performance appraisal is considered better than the traditional ones because it

provides advantages li"e a more accurate gauge, clearer standards, better feedbac", and

consistency in evaluation. 8owever, @A9$ is not free from limitations.

*he research on @A9$ indicates that it too suffers from distortions inherent in most rating scales.

*he research study concluded that ;it is clear that research on @A9$ to date does not support thehigh promise regarding scale independence n short, while @A9$ may outperform conventionalrating techni7ues, it is clear that they are not a panacea for obtaining high interrater reliability%

Assessment !entres:

*he introduction of the concept of assessment centres as a method of performance method is

traced bac" in -Ds in the 3ermany used to appraise its army officers.

*he concept, then, traversed from the army to business arena during -Cs. *he concept of

assessment centre is, of course, of a recent origin in ndia. n ndia, 4rompton 3reaves, #icher,

8industan +ever and odi Eero have adopted this techni7ue of performance evaluation.

n business field, assessment centres are mainly used for evaluating eecutive or supervisory potential. @y definition, an assessment centre is a central location where managers come together

to participate in welldesigned simulated eercises. *hey are assessed by senior managers

supplemented by the psychologists and the 89 specialists for 0D days.

*he distinct advantages the assessment centres provide include more accurate evaluation, minimum biasedness, right selection and promotion of eecutives, and so on. =onetheless, the

techni7ue of assessment centres is also plagued by certain limitations and problems. *he

techni7ue is relatively costly and time consuming, causes suffocation to the solid performers,discourages to the poor performers (rejected), breeds unhealthy competition among the

assessees, and bears adverse effects on those not selected for assessment.

012 3 $egree Appraisal:

Fet another method used to appraise the employee’s performance is DC G degree appraisal. *hismethod was first developed and formally used by 3eneral #lectric 4ompany of ?$A in -0.

*hen, it travelled to other countries including ndia. n ndia, companies li"e 9eliance ndustries,

&ipro 4orporation, nfosys *echnologies, *herma, *homas 4oo" etc., have been using thismethod for appraising the performance of their employees. *his feedbac" based method is

generally used for ascertaining training and development re7uirements, rather than for pay

increases.

?nder DC G degree appraisal, performance information such as employee’s s"ills, abilities and behaviours, is collected ;all around% an employee, i.e., from his<her supervisors, subordinates,

peers and even customers and clients.

n other worlds, in DCdegree feedbac" appraisal system, an employee is appraised by hissupervisor, subordinates, peers, and customers with whom he interacts in the course of his job

performance. All these appraisers provide information or feedbac" on an employee by

completing survey 7uestionnaires designed for this purpose.



All information so gathered is then compiled through the computerized system to prepare

individualized reports. *hese reports are presented to me employees being rated. *hey then meet

me appraiser5be it one’s superior, subordinates or peers5and share the information they feel as pertinent and useful for developing a selfimprovement plan.

n DC G degree feedbac", performance appraisal being based on feedbac" ;all around%, an em ployee is li"ely to be more correct and realistic. =onetheless, li"e other traditional methods, thismethod is also subject to suffer from the subjectivity on the part of the appraiser. :or eample,

while supervisor may penalise the employee by providing negative feedbac", a peer, being

influenced by 6give and ta"e feeling’ may give a rave review on his<her colleague.

!ost Accounting Method:

*his method evaluates an employee’s performance from the monetary benefits the employee

yields to his<her organisation. *his is ascertained by establishing a relationship between the costs

involved in retaining the employee, and the benefits an organisation derives from 8im<her.

/hile evaluating an employee4s performance under this method the following factors arealso taken into consideration:

-. ?nit wise average value of production or service.

0. Huality of product produced or service rendered.

D. !verhead cost incurred.

1. Accidents, damages, errors, spoilage, wastage caused through unusual wear and tear.

B. 8uman relationship with others.

C. 4ost of the time supervisor spent in appraising the employee.

Performance interview and importance

#ffective performance management re7uires ongoing communication between managers and

employees. Performance management interviews are a method of communication between an

employee and a manager where assessment of performance and collaboration in developingstrategies to improve performance ta"es place. *he ultimate goal of performance management is

to improve overall employee and organizational performance.

A performance management interview is to help improve employee job performance by using the

opportunity to communicate appreciation for employee contributions, to inform the employee of

their overall performance appraisal, have open dialogue with the employee to address strengthsand wea"nesses, clarify epectations, build relationships between employees and managers, and

to establish goals for improvement. A "ey step in this process is to provide the employee with

performance information. n order to conduct a successful performance interview there are "ey

guidelines that should be followed and made clear to the employee to enable them to meet andeceed their goals.



$uccessful performance management interviews are well prepared for in advance. *he manager

should have clear goals, data, and strategies for performance improvement, anticipate employee

reaction, and engage the employee in the improvement process. t is also the responsibly of themanager<supervisor to ensure that the employee is ade7uately prepared for the performance

management interview. *hey should do this by providing employees with ongoing training and

continuing education, feedbac" and coaching, recognition for good wor", information aboutimprovement opportunities, and opportunities to correct problems before they become serious

(and<or well in advance of the performance interview). A location should also be set in advance

and all supporting documents should be available to the employee at the time of the interview.

>uring the performance management interview the employee performance is discussed and the

performance appraisal is reviewed. A performance appraisal is an evaluation of an employee’s

performance. *he employee should be well informed of areas of improvement well in advance of the performance management interview so that a discussion can ta"e place on strategies to

improve performance. Performance management allows employees to be prepared for

evaluations and not be surprised with the information discussed at the face to face evaluation.&hen employees are prepared, there is less chance for intimidation or fear and more

opportunities for progressive active dialog that can foster great relationships between

management and staff.

!ne of the most significant benefits of performance appraisal is that, in the rush and bustle of

daily wor"ing life, it offers a rare chance for a supervisor and subordinate to have Itime outI for

a oneonone discussion of important wor" issues that might not otherwise be addressed.

Almost universally, where performance appraisal is conducted properly, both supervisors and

subordinates have reported the eperience as beneficial and positive.

Appraisal offers a valuable opportunity to focus on wor" activities and goals, to identify and

correct eisting problems, and to encourage better future performance. *hus the performance of

the whole organization is enhanced.

*he value of this intense and purposeful interaction between a supervisors and subordinate

should not be underestimated.

Motivation and atisfaction

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 wor" efforts. *he power of

social recognition as an incentive has been long noted. n fact, there is evidence that human

beings will even prefer negative recognition in preference to no recognition at all.



f nothing else, the eistence of an appraisal program indicates to an employee that the

organization is genuinely interested in their individual performance and development. *his alone

can have a positive influence on the individualJs sense of worth, commitment and belonging.

*he strength and prevalence of this natural human desire for individual recognition should not be

overloo"ed. Absenteeism and turnover rates in some organizations might be greatly reduced if

more attention were paid to it. 9egular performance appraisal, at least, is a good start.

Training and $evelopment

Performance appraisal offers an ecellent opportunity perhaps the best that will ever occur for

a supervisor and subordinate to recognize and agree upon individual training and development

needs.

>uring the discussion of an employeeJs wor" performance, the presence or absence of wor"

s"ills can become very obvious even to those who habitually reject the idea of training

for themK

Performance appraisal can ma"e the need for training more pressing and relevant by lin"ing it

clearly to performance outcomes and future career aspirations.

:rom the point of view of the organization as a whole, consolidated appraisal data can form a

picture of the overall demand for training. *his data may be analysed by variables such as se,

department, etc. n this respect, performance appraisal can provide a regular and efficient

training needs audit for the entire organization.

Recruitment and nduction

Appraisal data can be used to monitor the success of the organizationJs recruitment and induction

practices. :or eample, how well are the employees performing who were hired in the past two

yearsL

Appraisal data can also be used to monitor the effectiveness of changes in recruitment strategies.

@y 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 7uality of the wor"force is improving,

staying steady, or declining.

*mployee *valuation

*hough often understated or even denied, evaluation is a legitimate and major objective of

performance appraisal.



@ut the need to evaluate (i.e., to judge) is also an ongoing source of tension, since evaluative and

developmental priorities appear to fre7uently clash. Fet at its most basic level, performance

appraisal is the process of eamining and evaluating the performance of an individual.

*hough organizations have a clear right some would say a duty to conduct such evaluations of

performance, many still recoil from the idea. *o them, the eplicit process of judgement can be

dehumanizing and demoralizing and a source of aniety and distress to employees.

t is said by some that performance appraisal cannot serve the needs of evaluation and

development at the same time' it must be one or the other.

@ut 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.

Pro%lems in performance appraisal

Performance appraisal is important for organizations and employees. ?nfortunately, performance

appraisals are not on the top of the list of Ifavorite things to doI for either managers or

employees, and there can be a number of problems with their administration. :rom managers not

being trained to conduct performance appraisals effectively to the failure to tie performance

appraisal epectations to desired business results, businesses are often challenged to use this tool

effectively.

Poorly Trained Managers

#ffective performance appraisal doesnJt just happen and organizations shouldnJt assume that

managers "now how to conduct them effectively, even if they have many years of eperience as

managers. n fact, since the process can differ from organization to organization, it is important

that training is provided to introduce managers to the philosophy of performance appraisal at the

organization, including a review of the forms, the rating system and how the data gathered is

used. *raining should ta"e place regularly as a refresher both for new and veteran managers.

nconsistent Ratings

nterrater reliability is generally very low between managers at any organization. &hat one

manager considers to be IacceptableI performance, another may consider Inot meeting

epectations.I *his can be a challenge for any organization and is made more of a challenge in

situations where the criteria used are subjective and not based on any measurable performance

outcomes.



'ack of +utcome&-ased Measures

Performance appraisals that as" managers to rate employees on subjective criteria such as

Icustomer service s"illsI or Ileadership abilityI lac" specific outcomes that can be tied to

measurable results. *he best performance appraisals provide the ability for both managers and

employees to judge performance based on measurable outcomes that are objective' level of sales,safety records and evaluations from customers are all meaurable ways of providing insight into

an employeeJs performance.

5ot .sed for Performance mprovement

*he purpose of performance appraisal is not only to provide input to employees about how

theyJre doing, but also to provide the organization with an indication of areas of employee

strength and opportunities for improvement. ?nfortunately, few companies actually aggregate

and use the results of performance appraisal for performance improvement efforts. @y analyzing

results and ta"ing advantage of both best practices in areas where employees are performing welland opportunities for improvement in areas where theyJre not, organizations can receive

maimum value from their performance appraisal efforts.

performance app

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