Performance

Human
Management
resources slide 1
& Appraisal
 Performance Management & Appraisal

Topic: Member:

1. Performance Appraisal Sameer Malik

Human resources slide 1

2. Performance Appraisal Methods Syed Hassan Mehdi Rizvi

3. Dealing with Rater Errors Appraisal Syed Raza Hussain Kazm

Problems
4. Managing the Appraisal Interview Sayyeda Saadia Waseem

5. Employee Engagement Shahzad Maroof

6. Performance Management Muhammad Shariq

1

Performance Appraisal
Simply the assessment or evaluation of an
Individual’s (employee) performance and their
potential for development in a systematic way.
Performance Appraisal Process
1. Establishing Work Standards
2. Evaluating Performance Against Standards
3. Offering Feedback for Improvement and Excellence
Work Standards

1. Establishing Work Standards

In this initial stage, clear and specific performance expectations are
set for an employee's role or job. These standards outline the job
responsibilities, targets, goals, and behavioral expectations. It
provides a framework against which the employee's performance will
be assessed.
 2. Evaluating Performance Against
Standards
This stage involves assessing the employee's actual performance in
comparison to the established work standards. This evaluation can
encompass both quantitative metrics (e.g., sales figures, productivity
numbers) and qualitative assessments (e.g., communication skills,
teamwork). It often involves using a rating system or form to quantify
the evaluation.
 3. Offering Feedback for Improvement
and Excellence:
After assessing the performance, feedback is provided to the
employee. This feedback is aimed at helping the employee identify
areas for improvement as well as acknowledging and reinforcing
areas of excellence. Effective feedback should be specific,
constructive, and actionable. It should focus on both strengths and
areas that need development.
 Why Appraise Performance?
1. Used for pay, promotions, and retention.
2. Connects performance with company objectives.
3. Helps managers address weaknesses and build on
strengths.
4. Allows employees to evaluate their career paths
through appraisals.
5. Training needs are identified.
Employee’s Goals and Performance
Standards
1. First, the manager can assess to what extent the employee is
attaining his or her numerical goals. Such goals should derive
from the company’s overall profitability, cost reduction, or
efficiency goals. (SMART Goals)

2. A second basis upon which to appraise someone is to use a

form with basic job dimensions or traits such as
“communication” or “teamwork.”

3. A third option is to appraise employees based on their mastery

of the competencies (the skills, knowledge, and/or personal
behaviors) performing the job requires.
Human resources
Who Should slide 2
Do The Appraising?
Peer Appraisals: Evaluation by colleagues at a similar
level.

Rating Committees: Collective assessment by a group,

often supervisors.

Self Ratings: Employees assess their own performance.

Appraisal By Subordinates: Subordinates provide

feedback on their manager's performance.

360-Degree Feedback: A comprehensive approach that

involves gathering feedback from multiple sources,
including supervisors, peers, subordinates, and even
self-assessment. It provides a holistic view of an
employee's performance, incorporating various
perspectives.
2 Human resources
Performance slide
Appraisal 2
Methods

Traditional Methods: Modern Methods:

Graphic Rating Scale Behavior Anchored Rating Scale

(BARS)
Alternation Ranking
Management by Objectives
Paired Comparison (MBO)

Forced Distribution Computerized and Web-Based

Performance Appraisal
Critical Incident Method

Narrative Forms Electronic performance

monitoring (EPM)
 1. Graphic Rating Scale
• The Graphic Rating Scale method uses a
list of desired behaviors for each role and
rates employees on each trait. Examples of
traits include teamwork, time
management, accountability, job skills etc.

• Pros: Easy-to-use, quantifiable, and cost-

effective.

• Cons: Subjective, difficult to weigh which

traits are worth more than others.
 2. Alternation Ranking
• Pros: Simple to use (but not as simple as
graphic rating scales). Avoids central
tendency and other problems of rating
scales.

• Cons: Can cause disagreements among

employees and may be unfair if all
employees are, in fact, excellent.
 3. Paired Comparison
• The paired comparison method helps
make the ranking method more precise.
For every trait (quantity of work, quality
of work, and so on), you pair and compare
every subordinate with every other
subordinate. In the paired comparison
method, you make a chart of all possible
pairs of employees for each trait.
 4. Forced Distribution
• It involves categorizing employees into
predetermined performance levels (low,
average, top) to ensure a small percentage
are considered top performers and low
performers, while the majority fall into the
middle category. This approach is used to
encourage differentiation among
employees' performance ratings.
 5. Critical Incident Method
• Keeping a record of uncommonly good or
undesirable examples of an employee’s
work-related behavior and reviewing it
with the employee at predetermined times.
 6. Narrative Forms
• A narrative appraisal is basically a written
analysis in the form of easy analyzing an
employee's performance. This appraisal is
more individualized and qualitative in
nature.
 Developing a BARS:

7. Behavior Anchored
Rating Scale (BARS)
• An appraisal method that aims at
combining the benefits of narrative critical
incidents and quantified ratings by
anchoring a quantified scale with specific
narrative examples of good and poor
performance.
Developing a BARS:
1. Write critical incidents:
Identify specific examples of behavior, both good and bad, relevant to the job.
2. Develop performance dimensions:
Group these incidents into different aspects of job performance, like communication or
problem-solving.
3. Reallocate incidents:
Assign each incident to the performance dimension it best represents.
4. Scale the incidents:
Give each incident a rating (e.g., on a scale of 1 to 5) to indicate performance level.
5. Develop a final instrument:
Create the BARS document with dimensions, incidents, and rating scales. This is used for
evaluations.
 8. Management by Objectives (MBO)
• Management by objectives (MBO) is a strategic
management model that aims to improve the
performance of an organization by clearly defining Potential Problems with MBO
objectives that are agreed to by both management and
employees.

• Setting of organization’s goals Setting unclear Time-consuming

Conflict with
subordinates over
• Setting of departmental goals objective appraisal process
objectives
• Discussion of departmental goals
• Defining expected results (setting individual goals)
• Conducting periodic performance reviews
• Providing performance feedback
 9. Computerized and Web-Based
Performance Appraisal
• These generally enable Managers to keep notes on
subordinates during the year and then electronically
rate employees on a series of performance traits. The
programs then generate written text to support each
part of the appraisal.
 10. Electronic Performance
Monitoring (EPM)
• EPM systems use computer network technology to
allow managers to monitor their employees’
computers. They allow managers to monitor the
employees’ rate, accuracy, and time spent working
online.
3
Dealing With Rater Error Appraisal
Problems
• In a perfect world, all employers would use performance
appraisal systems with clear goals, fair appraisals, swift
feedback, and useful coaching. Alas, that is rarely the
case. Graphic-type rating forms in particular are
susceptible to several “rater error” problems; in other
words, systematic errors in judgment that occur when
people evaluate each other.
 Potential Rating Problems
1. Unclear Standards
2. Halo Effect
3. Central Tendency
4. Leniency or Strictness
5. Recency Effect
6. Bias
 1. Unclear Standards
This occurs when the criteria for evaluation are not well-
defined, leading to inconsistency in ratings. It's crucial to
provide clear and specific performance standards to raters.
 2. Halo Effect
Halo Effect is when a rater’s overall positive or negative
impression of an individual employee leads to rating
him or her the same across all rating dimensions. This is
when a manager really likes or dislikes an employee and
allows their personal feelings about this employee to
influence their performance ratings of them.
 3. Central Tendency
Central tendency error is the raters’ tendency to avoid
making “extreme” judgments of employee performance
resulting in the rating of all employees in the middle
part of a scale. This can happen either when a manager
is not comfortable with conflict and avoids low marks
to avoid dealing with behavioral issues.
 4. Leniency or Strictness
Leniency error is when a rater’s tendency is to rate all
employees at the positive end of the scale (positive
leniency) or at the low end of the scale (negative
leniency). Sometimes, our emotions determine how
we rate an employee, and this emotional response
may not be objective.
 5. Recency Effect
Recency error is the rater’s tendency to allow more recent
incidents (either effective or ineffective) of employee
behavior to carry too much weight in the performance
evaluation over an entire rating period. Either an employee
just finishing a major project successfully or may have had
a negative incident right before the performance appraisal
process that is at the forefront of the manager’s thoughts
about that employee.
6. Bias
Bias can stem from various sources, including race, gender,
age, or personal relationships. It distorts the evaluation
process and can lead to unfair treatment of employees.
 The Need for Fairness
• Base the performance review on duties and standards from a job analysis.
• Try to base the performance review on observable job behaviors or objective performance data.
• Make it clear ahead of time what your performance expectations are.
• Use a standardized performance review procedure for all employees.
• Make sure whoever conducts the reviews has frequent opportunities to observe the employee’s job performance.
• Either use multiple raters or have the rater’s supervisor evaluate the appraisal results.
• Include an appeals mechanism.
• Document the appraisal review process and results.
• Discuss the appraisal results with the employee.
• Let the employees know ahead of time how you’re going to conduct the reviews.
• Let the employee provide input regarding your assessment of him or her.
• Indicate what the employee needs to do to improve.
• Train the supervisors who will be doing the appraisals. Make sure they understand the procedure to use, how
problems (like leniency and strictness) arise, and how to deal with them.
 How To Avoid These Rate Error Problems?
Provide Clear Guidelines: Ensure that all raters have a thorough understanding of the performance criteria and what
constitutes exceptional, satisfactory, and poor performance.

Offer Rater Training: Provide training to help raters recognize and mitigate these biases, and offer tools and techniques
to make more accurate assessments.

Encourage Calibration: Conduct regular calibration sessions where raters discuss and compare their assessments. This
helps align ratings and ensure fairness.

Use Multiple Raters: Incorporate multiple perspectives to balance out individual biases and provide a more
comprehensive view of an employee's performance.

Utilize Technology: Consider using performance management software to standardize the appraisal process and reduce
the potential for human error.

Seek Employee Feedback: Allow employees to provide input on the appraisal process, which can help identify and
rectify potential sources of bias or error.
4
Managing the Appraisal Interview
Appraisal Interview: An interview in which the supervisor and
subordinate review the appraisal and make plans to remedy
deficiencies and reinforce strengths
4 Types of Appraisal Situations:

Satisfactory - Promotable: Plan for promotion.

Satisfactory - Not Promotable: Maintain with incentives.
Unsatisfactory but Correctable: Create an action plan.
Unsatisfactory & not correctable: Consider dismissal.
 How to Conduct the Appraisal Interview?
• Start with Small Talk: Begin with casual conversation to ease
into the interview.
• Clarify Purpose: Explain the purpose of the interview to
address any apprehensions.
• Highlight Strengths and Successes: Emphasize strengths and
specific achievements.
• Avoid Surprises: Don't introduce areas of under-performance
for the first time during the interview. Keep feedback
constructive and nonjudgmental.
• Provide Realistic Performance Rating: After discussing each
performance measure, give a realistic rating.
• Discuss Improvement Ideas: Talk about potential areas for
improvement and set new goals.
• Offer Support: Inquire about any support the employee may
need, such as resources, training, or coaching.
• End on a Positive Note: Close with a positive statement,
expressing appreciation and confidence in the employee's
abilities and future performance.
 Guidelines to Conducting the
Appraisal Interview:
Guidelines for Interview: • Prepare for appraisal interviews carefully by creating a
computer folder with the employee’s name. Save notable
achievements and feedback throughout the year. When
performance review time comes, you’ll have all of the
information you need in one spot.
• Be factual and specific. A performance review is all about
facts, not opinions. Create a list of feedback with supporting
points based on the employee’s work in the last year
removing the personal element.
• Remember that performance reviews are two-way
conversations. Keep the dialogue going with open-ended
questions and thoughtful responses
• Use the employee’s motivations to build a development plan.
Go beyond the surface and dig deep into what the employee
wants to accomplish during the next 5 to 10 years. This in-
depth knowledge will help you develop a specific
development plan.
 How to Handle a Defensive Subordinate?
Denial is a defense mechanism. By denying the fault, the person
avoids having to question his or her own competence.

• Recognize that defensive behavior is normal.

• Never attack a person’s defense only talk about fact like
“Reports shown that sales is down”.
• Postponed actions and don’t give threats. Give employee a
sufficient time to overcome their lacking.
• Recognize your limitation. A supervisor should not try to be a
psychologist. Offering understanding is one thing; trying to
deal with psychological problems is another.
 How to Criticize a Subordinate?
• Do it in a manner so that person maintain his/her dignity and
sense of worth.
• Criticize in private, and do it constructively
• Giving feedback on a daily basis, so that the review has no
surprises.
• Never say the person is "always" wrong
• Criticism should be objective and free of any personal biases.
 How to Handle a Formal Written
Warning?
• Identify standards by which employee is judged.
• Make clear that employee was aware of the standard.
• Specify deficiencies relative to the standard.
• Indicates employee’s prior opportunity for correction.
5

Employee Engagement
Employee engagement refers to the level of emotional
commitment and involvement that an employee has towards
their organization. Engaged employees are enthusiastic about
their work, feel a sense of purpose, and are motivated to
contribute to the success of the company.
 Importance of Employee Engagement
• It increase Employee Productivity
• It improve Employee Retention
• Reduce Absenteeism.
• Generates High Profits.
 Use the Appraisal Interview to Build Engagement
• Big Picture: Employees who understand how they and their departments contribute to the company’s success
are more engaged. Show the employee how their efforts contribute to the “big picture”.
• Value: Another study found that engagement rose when employee perceived that their role in the organization
is worthwhile and valuable. Use the interview to emphasize the meaningfulness to the company of what the
employee is doing.
• Safety: Employees who experience “psychological safety” (without fear of damage to self-image, status, or
career) were more engaged.
• Efficacy: Efficacy drives engagement, so use the interview to make sure your employee has what he or she
needs to do a good job.
• Decision Making: Involvement in decision making and letting employees voice their opinions improve
employee engagement. Use the interview to show your employees that you listen to their ideas and value their
contributions.
• Development: Engagement rises when employee have an opportunity to improve their careers. During the
interview discuss the persons evaluation in the context of where they see their career heading.
6
Performance Management
Performance management refers to the process of planning,
monitoring, and assessing an individual or a group's
performance in order to achieve organizational goals and
objectives. It involves a systematic approach to aligning the
efforts of employees with the goals of the organization.
 1. Planning
The first stage of the performance improvement cycle is
planning, involving meetings with management to set
organizational goals aligned with the business strategy.
Additionally, it requires considering individual and team
objectives, encompassing development goals, specific tasks,
targets, actions, and behaviors.
 2. Monitoring
In the monitoring phase, the goals set in the planning phase
are actively tracked. It involves the continuous measuring of
performance and providing feedback on progress towards the
goals. By monitoring continuously the managers or
supervisors can correct in case of below performance rather
than finding this out at the end of the year when it is too late.
 3. Developing
The professional development of the employee plays a key
role in improving performance. As a result of active
monitoring, areas of improvement can be identified. This can
be under performance that should be corrected or areas of
superior performance in which the employee wants to excel
even further. This can be achieve in the form of training and
development but also through challenging assignments and
other opportunities for personal and professional growth.
 4. Rating & Rewarding
Rating performance is an inevitability to determine the added
value of employees to the organization. This is usually done
during the employee’s biannual performance appraisal. Incase
of Suboptimal performance the employee might not be the
right function so the party should be goodbye. In case of
superior performance the employee should be recognized for
their performance by giving them praise, a rise, time-off,
recognition items, a promotion or all of the above.
SUMMARY:
Human resources slide 10
1. Performance appraisal assesses an employee's performance against set standards for promotion, salary decisions,
and career planning. Supervisory ratings remain central in this process.

2. Appraisals utilize various methods like graphic scales, ranking, critical incidents, and technology-driven tools for
evaluating performance effectively.

3. To enhance the appraisal process, address issues like unclear standards, biases, and rating errors like halo effect or
leniency.

4. A well-prepared appraisal interview involves notifying the employee, reviewing their job description and past
performance, selecting an appropriate location, and allocating sufficient time.

5. The appraisal interview is an opportunity to boost employee engagement by demonstrating their impact on team
and company success, emphasizing the significance of their work, and providing support rather than threats.

6. Performance management is a continuous process focusing on identifying, measuring, and developing individual
and team performance in alignment with organizational goals. It emphasizes ongoing interaction and feedback for
sustained improvement, recognizing that performance is influenced by more than just motivation.
Human resources slide 10
References:
Human resources slide 10
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