Performance Appraisal

Definition

evaluating an employee’s current and/or past performance relative to their established performance standards

3 core steps

1. Defining criteria/standards of job and peformance

2. Comparing actual performance to criteria

3. Feedback session

Why Appraise Performance?

Promotion

Correction

Career Planning

Performance Management

Data

Promotions

Most employers base compensation and promotion choices on employee appraisals.

Correction

helps supervisors and subordinates develop a plan to correct weaknesses and reinforce what the employee does right

Career Planning

such as succession planning/promotions

It provides an opportunity to review career plans in light of individual strengths and weaknesses

Performance Management

plays an integral role in performance management, which is the continuous process of identifying, measuring, and developing individual and team performance to align with organizational goals

Source of emplyee data

In less-developed HR systems, appraisal reports serve as the primary source of current employee data

Who Should Do the Appraising

• he immediate supervisor

• Peers (Peer appraisals)

• Rating committees

• Self-ratings

• Subordinates (Appraisal by subordinates)

• 360-Degree Feedback (combining multiple perspectives)

Problems

Unclear standards

Unclear Standards: Ambiguous traits.

Solution: Use clear descriptions for each performance level/trait.

Central Tendency

Rating all employees as average.

Leniency or Strictness

Consistently grading everyone either too high or too

Bias

Ratings being inappropriately affected by the appraiser's or appraisee's personal characteristics.

Recency Effects

Letting recent actions blind the rater to the employee's overall performance throughout the year.

Solutions

• Know the potential rating problems

• Use the right appraisal tool

• Keep a diary/log of events throughout the year

• Get mutual agreement on a performance plan

• Be fair and talk in terms of objective work data

Methods (11)

Graphic Rating Scale Method

Forced Distribution Method

Alternation Ranking Method/Paired Comparison Method

Critical Incident Method

Narrative Forms

Behaviorally Anchored Rating Scales

Management by Objectives (MBO)

Computerized/Web-Based & Electronic Performance Monitoring (EPM)

Graphic Rating Scale Method

It lists various job traits (such as "communication," "teamwork," or "organizational know-how") alongside a range of performance values or scales (typically spanning from options like unsatisfactory to outstanding, or below expectations to role model)

Graphic Rating Scale Totaled

The supervisor rates each subordinate by circling or checking the score that best describes the subordinate’s performance for each trait

It’s totaled.

Forced Distribution Method

Similar to grading on a curve;

managers place predetermined percentages of workers into various performance categories (e.g., using a bell curve distribution).

Forced distribution curve averages

categorize employees into fixed performance percentages (e.g., top 10% get excellent, 70% get average, 20% get low ratings), regardless of overall team quality.

Alternation Ranking Method

The evaluator lists employees from best to worst by alternately picking the highest and lowest remaining worker until all are ranked.

Paired Comparison Method

Every employee is directly compared against every other employee in pairs (e.g., Employee A vs. Employee B). The worker who wins the most head-to-head matchups ranks highest.

Critical Incident Method

The supervisor keeps a log of positive and negative examples (critical incidents) of a subordinate’s work-related behavior

Eg; lateness, errors etc

Focuses on actual observable behavior rather than vague traits

Narrative Forms

The evaluator writes an open-ended descriptive essay outlining an employee's strengths, weaknesses, past performance, and potential, often backed by specific examples.

Behaviorally Anchored Rating Scales

hybrid method that combines elements of the graphic rating scale and critical incident methods.

uses a numerical scale anchored by specific, observable descriptions of actual workplace behavior ranging from poor to excellent performance.

Management by Objectives (MBO)

results-driven framework where managers and employees jointly set specific, measurable, time-bound goals. Performance is subsequently evaluated based on the degree of goal attainment

Computerized/Web-Based/Electronic Performance Monitoring (EPM)

Utilizing software platforms, HRIS dashboards, and digital monitoring tools to track metrics in real-time

(e.g., project milestones completed, keystrokes, customer satisfaction scores, code commits).

Types of Appraisal Interviews

1. Satisfactory-Promotable

2. Satisfactory-Not Promotable

3. Unsatisfactory but Correctable

4. Unsatisfactory and Uncorrectable