1

PERFORMANCE REVIEW AND APPRAISAL

OVERVIEW:

One of the most important activities of an HR manager is maintaining and enhancing the
workforce. With all the efforts and costs that recruiting and selection entail, it is also important
to develop employees for them to use their fullest capabilities, thus improving the effectiveness
of the organization. This module tackles about the performance review and appraisal which
entails determining and communicating to an employee how he/she is performing on the job
and ideally, establishing a plan of improvement.

LEARNING OUTCOMES:
▪ Define and explain performance appraisal
▪ State the different criteria in the development of measuring instruments ▪
Identify the different approaches to performance management
▪ Learn how to evaluate the performance of an employee and communicate the results of
the appraisal in a way that the employee will understand

PRE-ASSESSMENT:

Essay Criteria:
Content (Focus/details) 3 points
Organization 3 points
Word choice 2 points
Sentence Structure, Grammar and spelling 2 points
Total 10 points

1. Discuss the importance of appraisal or feedback interview to the employee?

 2
DISCUSSION:

Performance - is measured in terms of result. It may be defined then as the accomplishment of

an employee or manager’s assigned duties and outcomes produced on a specified job function or
activity during a specified period.

Performance review or evaluation- refers to a systematic description and review of an

individual’s job performance. It is the ongoing process by which an individual’s work performance
is assessed and evaluated. It answers the question, “How well has the employee performed
during the period of time in question?”
Example of performance Appraisal Form:

https://pdfsimpli.com/f

orms/form-type/form/staff-performance-appraisal-form/

3
Performance management is an ongoing communication process, undertaken in partnership
between an employee and his/her immediate supervisor. Its major contribution is its focus on
achieving results—useful products and services for customers inside and outside the
organization.
It involves establishing clear expectations and understanding about the
 following: a. The essential job functions the employee is expected to do
b. How the employee’s job contributes to the goals of the organization
c. What “doing the job well” means in concrete terms
d. How the employee and supervisor will work together to sustain, improve, or build on
existing employee performance
e. How job performance will be measured
f. Identifying barriers to performance and removing them

Take note: The primary goal of performance management is to improve performance.

Performance appraisal is not performance management. Evaluating performance is just one
part of performance management.

Why Measure Performance

1. It allows management to specify what must be done and to combine feedback with goal
setting.
2. On the part of the employee, he/she can improve on what he/she is supposed to do
without necessary data before and after to see if performance is improving. 3. Creating high
performance requires a definition of clear goals so you will know it when you see it. In
addition, all high performers get there because they have a clear picture of where they are
going.
4. Pay for performance requires metrics.

Early Approaches to Performance Appraisal

1. Focusing on the employees’ past performance- this is more on management of results. 2.

Focusing on the employees’ development- results become the driving force for
management development.

Common Flaws Identified with Performance Review System Design

1. Organizations limit performance review to make employees accountable for past

endeavor.
2. Tying performance review to employee salary review.

Note: These flaws point to the fact that companies must not only look at performance review as
the mechanical administration of personnel evaluation forms. The evaluator must be able to
inform an employee that his /her performance is less than the required standard and less than
what he/she is capable of giving, or that he/she has an attitude or behavior problem the is
limiting

4
his/her contribution in the organization. This is the reason why there is a need to focus on
performance management rather than just evaluating the employees’ performance.
Objective of Performance Appraisal

1. It provides information upon which promotion, transfer, demotion, layoff, discharge, and
salary decisions can be made. It could justify reward decisions.
2. It provides an opportunity for the supervisor and his/her subordinates to review and
identify their strengths and weaknesses or work-related behavior.
3. It forms the basis in identifying the training needs of employees as well as evaluating the
success of training, thus, development initiatives are not based on opinions but rather
on results.
4. It allows easy monitoring and supervision.
5. It helps evaluate individual’s share relative to team’s contribution in achieving the
organizational goal.
6. It provides information to evaluate effectiveness of selection and placement decisions.

Performance Criteria

Deciding what to evaluate reflects personal values of the individuals who design the
evaluation system. Most people agree that quality and quantity of performance are important
dimensions to evaluate but there is less agreement about traits such as appearance, initiative,
enthusiasm and the like. The following are the suggested criteria to be included in the
construction of performance evaluation:
1. Relevance - relevant performance dimensions are determined by the duties and
responsibilities contained in the job description.
2. Reliability - produced consistent and repeatable evaluation.
3. Freedom from contamination - should measure each employee’s performance without
being contaminated by factors that an employee cannot control such as economic
conditions, material shortage, or poor equipment.

Indicators or Matrix that can help Measure Employee Performance

According to Hakala (2008), a manager or supervisor can use the following indicators of
performance to appraise subordinates.
1. Quantity: The number of units produced, processed, or sold is a good objective indicator
of performance.
2. Quality: The percentage of work output that must be redone or is rejected is one
indicator of quality.
3. Timeliness: How fast work is performed; it might be the number units produced per hour.
4. Cost-effectiveness: The cost of work performed should be used as a measure of
performance only if the employees has some degree of control over costs. 5. Absenteeism/
Tardiness: An employee is obviously not performing when he/she is not at work.

5
6. Creativity: Supervisors and employees should keep track of creative work examples and
attempt to quantify them.
7. Adherence to Policy: This may seem to be the opposite of creativity, but it is merely a
 boundary on creativity. Deviations from policy indicate an employee whose performance
goals are not well-aligned with those of the company.
8. Gossiping and other Personal Habits: They may not seem performance related to the
employee, but some personal habits, like gossiping or rumor, mongering, can disrupt job
performance and interfere with the performance of others.
9. Personal Appearance/Grooming: Most people know ho to dress for work, but in many
organizations, there is at least one employee who needs to be told.

Who Should Evaluate Performance?

1. Manager/Supervisor Appraisal - They are in the best position to observe employees, and
they should have better understanding of the job being performed.
2. Self-Appraisal - The employees appraises his or her own performance, in many cases
comparing the self-appraisal to management’s review.
3. Subordinates Appraisal - Provides unique information because subordinates know better
than anyone else whether leadership is good or bad.
4. Peer Appraisal - are more often effective at focusing an employees’ attention on
undesirable behaviors and motivating change. This method often places greater
emphasis on team performance and team rewards.
5. Customer/Supplier - This kind of appraisal would be more relevant for service-oriented
companies such as banks, where the inputs provided by external customers can be
useful for staffing.
6. Team Appraisal - Similar to peer appraisal in that members of a team, who may hold
different positions, are asked to appraise each other’s work and work styles. 7. Assessment
Centers - The employee is appraised by professional assessors who may evaluate simulated
or actual work activities.
8. 360 Degree or “Full-Circle” Appraisal - The employee’s performance is appraised by
everyone whom he or she interacts, including managers, peers, customers, and
members of other departments.

Figure 7. Process Involved in Performance Evaluation

Sources of Data in Appraisal

1. Production Data- evaluate the degree of dependable task accomplishment by measuring

quantity and quality of performance.
2. Personnel Data- type of information found in individual’s personnel files 3. Judgment of
others- many of the spontaneous and innovative behaviors that are important to
organizational effectiveness can only be assessed by the judgements of others and ought to
be obtained in every evaluation.