MODULE 4 PM

Performance Appraisal(PA)

Definition: Performance Appraisal is defined as a systematic process, in which the personality

and performance of an employee is assessed by the supervisor or manager, against predefined
standards, such as knowledge of the job, quality and quantity of output, leadership abilities,
attitude towards work, attendance, cooperation, judgment, versatility, health, initiative and so
forth.
PURPOSE OF PA

Performance appraisal is a systematic evaluation of present potential capabilities of personnel

and employees by their superiors, superior’s or a professional form outside.It is a process of
estimating or judging the value, excellent qualities or status of a person or thing. It is a process
of collecting, analyzing, and evaluating data relative to job behavior and results of individuals.
Some organizations use more then one appraisal system for different types of employees or for
different appraisal purposes. Organizations need to measure employee performance to
determine whether acceptable standards of performance are being maintained. The six primary
criteria on which the value of performance may be assessed are: quality, timeliness, cost
effectiveness, need for supervision, and interpersonal impact, objectives. If appraisals indicate
that employees are not performing at acceptable levels, steps can be taken to simply jobs, train,
and motivate workers, or dismiss them, depending upon the reasons for poor performance.

Arguments against PA= 1. Manager’s judgment or assessment based on preferences-

They keep their biased view upfront of measure and analyzing employee performance against
the assigned goals and objectives. They show less interest in the performance appraisals system
and belief in their method of performance judgments

2. Unstructured methods of performance appraisal systems-Performance managers

include “primary result areas” in the performance appraisal system, but do not include
“primary performance indicators” which result in the qualitative appraisal system instead of
quantities appraisal.

3. Lack of interest and ownership of manager-The performance appraisal process is long

and time-consuming.This process involves lots of talks discussion, feedback, and designing
techniques of managers. Most of the time managers do not show much engagement and interest
in designing and developing the performance standards and set goals for their team members
objectively

4. Lack of a proper channel of communication-In many organizations, managers avoid

giving direct acknowledgment to employees on their performances. They resist and close the
channel of exchanging feedbacks with their subordinates.
5.Lack of reward and recognition policy- In many organizations, management avoids giving
rewards and recognition to the employee performer in view to avoid any business or unrest
among other team members
 6.Lack of designing, monitoring, and measuring the performance appraisal standards-
Performance appraisal is a continuous process that should be developed, designed, and
monitored by managers for successful implementation. In the absence of such practices, it is
difficult to collect information, measure, analyze, and use it for the decision-making process.
As a result, employees felt demotivated and lost their confidence in this system.
NECESSITY OF PERFOMANCE APPRISAL AND ITS USAGE BY ORGANISATION

• To assist in promotions, transfers, and lay-off decisions.

• To make aware to the employee about his actual performance.
• To meet organizational expectations with employees' objectives.
• To assess the training and development needs of the employees.
• To plan job rotation.
• To improve communication between managers and subordinates.
• To assist in decisions regarding salary increment
• To provide feedback and guidelines for employees for better performance.
• To instill activeness and inspiration or higher goals in employees.
• To determine HR Programs for selection training, and development and to evaluate their
effectiveness.

USAGE A performance appraisal is a regular review of an employee's job performance and

contribution to a company.Companies use performance appraisals to determine which
employees have contributed the most to the company’s growth, review progress, and reward
high-achieving workers. Although there are many different kinds of performance reviews, the
most common is a top-down review in which a manager reviews their direct report .Employees
who believe the evaluation's construction isn't reflective of their company's culture may feel
dissatisfied with the appraisal process. Performance appraisals are also called annual reviews,
performance reviews or evaluations, or employee appraisals.

PA PROCESS=Step 1: In most organizations, the performance appraisal process means

evaluating an employee every 6 months or one year for the period an employee has continually
worked with the organization. In modern times, the Human Resources department sends out
an employee survey for them to fill out to collect data related to their engagement and
satisfaction levels.

Step 2: The employee’s immediate manager or supervisor will then evaluate the quality of the
employee’s performance based on the work done in the previous year and then meet face-to-
face to discuss the facts and figures.

Step 3: The feedback received from the survey can be kept anonymous. This feedback can be
analyzed real-time by using QuestionPro’s Workforce platform, that measures, analyzes and
activates data to get actionable insights
 Errors made by human resource department- Halo Effect: This is a tendency let the
assessment of a single trait influence the evaluation of the individual on other traits too Horns
Effect: This is a tendency to allow one negative trait of the employee to color the entire
appraisal. This results in an overall lower rating than may be warranted. Leniency or
Constant Error: Depending upon the appraiser’s own value system which acts as standard,
employees may be rated leniently or strictly. Such a rating does not carry any reference to
actual performance of the employees. Some appraisers consistently assign high values to all
employees, regardless of merit. This is a leniency error. The strictness tendency is a reverse
situation, where all individuals are rated too severely and performance is understated.

TRADITIONAL METHODS:

1. Ranking Method:It 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. The employees are ranked from the highest to the lowest or from the best to the worst.
2. Paired Comparison:In this method, each employee is compared with other employees on
one- on one basis, usually based on one trait only. The rater is provided with a bunch of slips
each coining pair of names, the rater puts a tick mark against the employee whom he insiders
the better of the two. The number of times this employee is compared as better with others
determines his or her final ranking.
3. Grading Method:In this method, certain categories of worth are established in advance and
carefully defined. There can be three categories established for employees: outstanding,
satisfactory and unsatisfactory. There can be more than three grades. Employee performance
is compared with grade definitions. The employee is, then, allocated to the grade that best
describes his or her performance.
4. Forced Distribution Method:This method was evolved by Tiffen to eliminate the central
tendency of rating most of the employees at a higher end of the scale. The method assumes that
employees’ performance level confirms to a normal statistical distribution i.e., 10,20,40,20 and
10 per cent. This is useful for rating a large number of employees’ job performance and promo
ability. It tends to eliminate or reduce bias.
5. Field Review Method:When there is a reason to suspect rater’s biasedness or his or her rating
appears to be quite higher than others, these are neutralised with the help of a review process.
6. Essay Method:Essay method is the simplest one among various appraisal methods available.
In this method, the rater writes a narrative description on an employee’s strengths,
weaknesses, past performance, potential and suggestions for improvement.
7. Graphic Rating Scale Method:The graphic rating scale is one of the most popular and
simplest techniques for appraising performance. It is also known as linear rating scale.

MODERN METHOD

1.Management by objectives (MBO)

The management by objectives method is an approach that focuses on improving an

organization’s performance across the board by articulating clear objectives for the business.
The entire team, both management and employees, sets those objectives.This approach, an
employee and manager work together to identify and plan goals for the employee to reach,
usually within a specific time frame.

2. 360 degree feedback=The 360 degree feedback method is designed to get feedback from
all the key players an employee impacts in their day-to-day activities — managers and
supervisors, peers, subordinates, and even clients and customers. The employee also
completes a self-evaluation.This method is highly regarded because multiple people are
involved in evaluating the employee’s performance.

3. Behaviorally anchored rating scale (BARS)=According to HR software company

TalentLyft, BARS is “a measuring system which rates employees or trainees according to
their performance and specific behavioral patterns.This is considered one of the most effective
modern methods of performance appraisal because it relies on both quantitative and
qualitative forms of measurement.

4. Psychological appraisal=This approach to performance appraisal attempts to evaluate how

an employee might perform in the future rather than assessing how they have performed in
the past.A qualified psychologist conducts in-depth i 5. 5.Assessment center-In the
assessment center method, an organization tests its employees on both job capabilities and
social interaction skills. Written tests help evaluate ability, while situational exercises and
role-playing scenarios assist with determining an employee’s likelihood of success in carrying
out responsibilities that are part of their day-to-day role.nterviews, psychological tests, and
private conversations to assess an employee.

PERFORMANCE FEEDBACK

Performance feedback is a communications process. It should be ongoing meaning as

adjustments are made based on the information exchanged between manager and team
member.

TYPES OF FEEDBACK

1. Formal feedback- This type of feedback is the most obvious and can take the form of
something like an annual performance review. Formal feedback is typically arranged and can
be pre-planned.

2. Informal feedback -This will be the most common type of feedback that occurs in the
workplace. It can happen at any time, between anyone, and can be as effective and useful as
unproductive and hurtful.

Types Of Feedback Based On Source

 1. Peer-to-peer feedback
Coworkers are constantly giving each other feedback without knowing it. This is because it
commonly comes in the form of informal feedback.Peers share knowledge on how the job is
done with new starters, they will always help others fill gaps in their knowledge.

2. Self-feedback
A self-feedback is a form of autonomous feedback that employees can give themselves.
Naturally, individuals will identify their weak areas and may seek out a way to improve. They
may share this with colleagues or management in hopes of support.

Types of feedback at the workplace

1. Praise (Appreciation)- Praise can be an excellent motivator and a workplace will benefit from
positive feedback .Employees like to feel appreciated and they are likely to be loyal workers
for companies that engage with them in this way.

2. Criticism -This is the more negative form of feedback that should be approached carefully to
avoid making employees feel bad. Criticism should only ever be shared constructively and not
as a method to put someone down.

3. Evaluation - This kind of feedback is generally used to update an employee on their current
performance. This is useful as it keeps employees informed with expectations, job security,
and how they are performing.

4. Coaching -This is a more hands-on kind of feedback that may be relevant when an employee
is training. Coaching feedback can mimic formal feedback sessions but it will involve reviews
more often.

5. Encouragement- The right kind of feedback can be very inspiring for employees. By having
smaller feedback sessions that focus on encouragement you can create a safer, friendlier work
environment. These sessions are similar to evaluation sessions but there is a greater emphasis
on the job that's being done rather than targets.

PRINCIPLES OF FEEDBACK(components)

1. Timing Is Key: Feedback is always most effective when given as soon as possible after the
behaviour has occurred. The immediacy helps to reinforce a correct behaviour and make it
more likely to happen again. At the very least, it is highly desirable to give corrective feedback
before the situation occurs again.
2. Seeking Self-Feedback: By asking the person for self-assessment involves them in the
feedback. It promotes an open atmosphere and dialogue where feedback is the norm. The
person is almost always aware of his or her own strengths and weaknesses, so it is far more
effective to allow the person to voice opinions before providing your own assessment. By
seeking self assessment, the person will more readily assume responsibility for his or her own
abilities and performance.

3. Be Specific: When you focus on a specific correct or incorrect behaviour, you remove the
feedback from the sphere of personality differences and the other person will be more willing
and able to change.

4. Focus On What Matters: Identify one or two critical areas and help the person address
them one at a time. It is too hard to examine and try to change many aspects of behaviour at
one time. Restrict feedback to one or two important points so that you do not overwhelm the
other person with too many things to consider.

5. Provide More Praise: Positive reinforcement is one of the strongest factors in bringing
about change. Unfortunately a lot of people always focus on what goes wrong! When you give
corrective feedback, remember to point out corrective behaviours first. This is as important as
pointing out mistakes and areas that need improvement. And always end the conversation on a
positive.

6. Recognise The Expected: People deserve to be praised for behaving to the expected level.
However, too many people take the expected level for granted. Remember that praising anyone
who meets established standards is as important as praising the exceptional performer.

7. Encourage Change: Work together to identify the desired change and how it can be
achieved. Decide together when the changes will be accomplished.

STEPS IN CONSTRUCTIVE FEEDBACK

Establish Trust
Balance the Positive and the Negative
Observe, Don't Interpret
Be Specific
Talk Face-to-Face
Don't Make it Personal
Provide Feedback Consistently
Be Timely

360 DEGREE FEEDBACK

360 degree feedback program aims at solving multi-dimensional problems in an organization,

ranging from employee engagement and attrition to development and succession planning.
ADVANTAGES

1 Creates Self-Awareness About Strengths & Weaknesses 360 degree feedback helps bridge
the gap between what employees think of themselves and others’ opinions of them.

2 Identifies Training Gaps While skill gaps are a roadblock for organizational success and
development, they equally hamper individual growth.

3 Improves Productivity & Work Relationships Feedback from peers not only boosts an
employee’s morale but also helps them and their managers work better.
4 Gives Insight into Employees’ Work the main benefit of a 360 degree appraisal for
employers is to really understand an employee’s role in the company, beyond what they see in
the outcomes of tasks.
5 Increases Transparency Within the Organization it provides increased transparency,
which enables all individuals in the organization to further develop trust between members.

DISADVANTAGES

Sidelines Positive Feedback

some managers can be tempted to use 360 degree feedback to concentrate on finding negative
aspects of an employee’s performance rather than celebrating and developing positive aspects.
Garners Dishonest Reviews
If there is a lack of trust in the people administering the 360 degree appraisal, no one will offer
honest feedback.
Increases Distrust in Leaders
if a leader does not communicate what he/she learned or what he/she will do to address the
feedback, then those participating feel that it was just a useless exercise and won’t amount to
any tangible change.
Time-Consuming Process
360 review – it takes up significant time, both from fellow team members and HR
professionals. Other staff members need to take the time to answer questions and to hopefully
do so thoughtfully.
Provides Biased Opinions
When 360 degree feedback is done via the interview style, the third party can misinterpret the
feedback

PURPOSE OF 360 DEGREE FEEDBACK

1. Employee Development
360 degree feedback encourages employees to share the purpose of their development with
their manager.
2. Performance Appraisals
multiple feedback can definitely lend more credibility to the appraisal and promotion process.
 3.Succession Planning
the 360 degree feedback tool comes in handy when preparing certain employees for new roles,
especially critical leadership roles.

PROCESS OF 360 DEGREE FEEDBACK

Communicating 360:

it is crucial that you communicate the process to all stakeholders, including the purpose of the
360 degree, the process, and how feedback will be gathered and utilized.
Selecting raters:
Selecting raters is one of the most important steps of the 360 feedback process. Participants
will need to choose enough feedback providers to ensure that the data is comprehensive and
relevant.
Distributing surveys:
Using an online 360 feedback system will allow you to distribute the questionnaires quickly.

Completing questionnaires:

Having participants fill out and complete the review is the longest stage in the process. The
length of this step can depend on the number of raters involved, the employee’s job role, and
the organization
Producing reports:
Once all of the feedback providers have completed their questionnaires a report is produced.
Facilitating feedback:
It is recommended that confidential feedback meetings be arranged for each participant
undergoing the 360 review.
Completing development plan:
Creating the development plan for each participant in the review is the essence of the process.
The feedback obtained from the 360 evaluation becomes the basis for an actionable
development plan
Re-evaluating:
It is important to establish 360 degree feedback in your organization as a process and not a one-
off event. To do so, you should clearly communicate at the start of the process that subsequent
reviews will happen each year. Re-evaluating participants enables you to see if any changes
have occurred and also provides the chance for new feedback.