1. What is performance appraisal. 2. Developing and instituting performance appraisal system( steps explained in detail). 3. Rewarding performance. 4. Linking rewards to organizational objectives.

1. PERFORMANCE APPRAISAL
&
REWARDING PERFORMANCE
PRESENTED BY:
SALONI
AGARWAL
MBA 2.2
ROLL NO. 26

2. PERFORMANCE APPRAISAL
Performance appraisal is the process of evaluating and documenting an
employee’s performance with a view to enhancing work quality, output
and efficiency.
Performance appraisals perform three important functions within
companies i.e.
They provide feedback to a person on their overall contribution for a
period.
They identify development needs and opportunities for improvement.
They help inform salary and bonus reviews.

3. DEVELOPING AND INSTITUTING PERFORMANCE
APPRAISAL SYSTEM
Establishing
performance standards
Communicating the
standards
Measuring the actual
performance
Comparing with
standards
Discussing results
Taking corrective
Actions

4. I. Establishing performance standards
The first step in the process of performance appraisal is the setting up
of the standards which will be used to as the base to compare the
actual performance of the employees. This step requires setting the
criteria to judge the performance of the employees as successful or
unsuccessful and the degrees of their contribution to the
organizational goals and objectives. The standards set should be
clear, easily understandable and in measurable terms.

5. II. Communicating the standards
Once set, it is the responsibility of the management to
communicate the standards to all the employees of the
organization. The employees should be informed and
the standards should be clearly explained to the
employees. This will help them to understand their
roles and to know what exactly is expected from them.
The standards should also be communicated to the
appraisers or the evaluators and if required.

6. III. Measuring the actual performance
Measuring the actual performance of the employees is the
work done by the employees during the specified period of
time. It is a continuous process which involves monitoring
the performance throughout the year.
This stage requires the careful selection of the appropriate
techniques of measurement, taking care that personal bias
does not affect the outcome of the process and providing
assistance rather than interfering in an employees work.

7. IV. Comparing actual performance with desired
performance
The actual performance is compared with the desired or
the standard performance. The comparison tells the
deviations in the performance of the employees from the
standards set. The result can show the actual performance
being more than the desired performance or, the actual
performance being less than the desired performance
depicting a negative deviation in the organizational
performance.

8. V. Discussing results [Feedback]
The result of the appraisal is communicated and discussed with the
employees on one-to-one basis. The focus of this discussion is on
communication and listening. The results, the problems and the possible
solutions are discussed with the aim of problem solving and reaching
consensus. The feedback should be given with a positive attitude as this can
have an effect on the employees’ future performance. Performance appraisal
feedback by managers should be in such way helpful to correct mistakes
done by the employees and help them to motivate for better performance.
Sometimes employees should be prepared before giving them feedback as it
may be received positively or negatively depending upon the nature and
attitude of employees.

9. VI. Taking corrective actions
The final step in the appraisal process is the initiation of
corrective action when it is necessary. The areas needing
improvement are identified and then, the measures to
correct or improve the performance are identified and
initiated.
The corrective action can be of two types i.e.
 One is immediate and deals predominantly with
symptoms. This action is often called as “putting out
fires.”
 The other is basic and delves into causes of deviations and
seeks to adjust the difference permanently. This type of
action involves time to analyse deviations.
Training, coaching, counselling, etc. is the common
examples of corrective actions that managers initiate to
improve the employee performance.

10. REWARDING PERFORMANCE
Move from an entitlement based reward culture to one where you
recognise and reward performance
Identify the best talent (performance & potential)
Retain, incentivise and reward your best talent to deliver
increased productivity and enhanced business performance – get
the alignment
Operate within budget and forecast
Demonstrate fairness and transparency
Fully auditable

11. LINKING REWARDS TO ORGANISATIONAL
OBJECTIVES
Basic objectives of appropriate compensation and reward system in any
organisation are:
 It aims to develop skills and personality of employees by which they can
earn better and attractive compensation.
 It aims to pay fair and justify remuneration on the basis of their efforts,
skills and competencies.
 It aims to improve the quality of services as rendered by employees.
 It aims to increase the level of efficiency and productivity of employees.
 It aims to develop and enhance cooperation among employees.
 It aims to motivate employees towards higher work performance.
 It aims to make better employer employee relations.
 It aims to reinforce desirable and applicable employee behaviour.