Planning performance appraisal system

1. Performance Appraisal
Ms. Preeti Bhaskar
Assistant Professor, IMS Unison University,
Dehradun

2. Syllabus
Performance Appraisal
 Concept of Performance Appraisal
 Objectives and principles
 Importance and benefits of Performance
Appraisal
 Performance Appraisal System
 Planning Performance Appraisal system
 Types of Performance Appraisal system
 Problems with Performance Appraisal
 Essential characteristics of an Effective
Performance Appraisal system

3. Methods of Performance Appraisal
 Traditional and modern methods of Performance Appraisal
 360 Degree feedback system
 Key elements of MBO
 Suggestion for increasing effectiveness of MBO
 Appraisal interview and feedback
 Concept and need for conducting an appraisal interview
 Appraisal interview from managers and employee perspective
 Conducting an appraisal discussion
 Concept of potential appraisal
 Concept and need of a potential appraisal system
 Process and methods of evaluating employee potential

4. Unit- 1
Introduction to Performance
Appraisal

5. 60% employees say performance appraisals are a waste of time, 70%
say no idea how they are evaluated: Survey
• Organisations need to make staff appraisals more transparent and useful as
most employees are neither fully conversant with the process nor do they see
them as a worthy task to perform.
• Majority of the employees find performance reviews in their organisations
opaque, cumbersome and a waste of time, reveals a TimesJobs survey, 'The
Performance Review Puzzle', of more than 1,200 employees in various kinds of
organisations.
• Sixty per cent employees said the performance review was a waste of time.
• Most employees are not even fully aware of the process of evaluation. Seventy
per cent said they did not know how they were evaluated. Not surprisingly, 85
per cent were not aware of the end-to-end process of performance review.
• Ninety per cent found performance review forms complex and cumbersome.
• Outcome of appraisals never left 35 per cent satisfied while 25 per cent had
been rarely satisfied. Only 10 per cent said they were always satisfied. Thirty per
cent were sometimes satisfied.
• A huge 95 per cent said they were not trained by the human resource
department to fill in the review form.

6. Dale S. Beach, "Performance appraisal is systematic
evaluation of the individual with respect to his or her
performance on the job and his or her potential for
development".
Dale Yoder, ''Performance appraisal includes all
formal procedures used to evaluated personalities and
contributions and potentials of group members in a
working organisation. It is a continuous process to
secure information necessary for making correct and
objective decisions on employees."

8. Where would you
rather work?

9. Where would you rather work?

10. Where would you rather work?

11. 1.
Transition headline
Let’s start with the first set of slides
Review
Coach
Plan

12. Performance
Appraisal
• Concept of Performance
Appraisal
• Objectives of Performance
Appraisal
• Principles of Performance
Appraisal
• Importance of
Performance Appraisal
• Benefits of Performance
Appraisal

13. Concept of Performance
Appraisal
Performance appraisal is the step
where the management finds out
how effective it has been at hiring
and placing employees .
A “Performance appraisal” is a
process of evaluating an employee’s
performance of a job in terms of its
requirements.

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Purpose
Empowerment
Relationship
Flexibility
OptimalPerformance
Recognitionand
Rewards
Morale

15. Definition of
Performance Appraisal
According to Newstrom, “It is the process of evaluating the
performance of employees, sharing that information with them
and searching for ways to improve their performance’’.
According to Edwin Flippo, "Performance Appraisal is the
systematic, periodic and impartial rating of an employee's
excellence, in matters pertaining to his present job and his
potential for a better job.“
According to Dale Beach, "Performance Appraisal is the
systematic evaluation of the individual with regards to his or
her performance on the job and his potential for development."

16. Objectives of Performance
Appraisal
Identify employees who are
eligible for salary increase.
Generate data to take personnel
decisions such as promotion, transfer and
lay-off or termination
decision.
Determine the training and development
needs of the employees. Validate
the selection
process.
To measure whether standards laid
down has been achieved by the
employees
or not.
Estimate the future
requirement of work force.
Helps to recognize potential
of promising employees.
Performance appraisal also helps in
motivating employees by providing feed
back about their
level of performance.

17. Principles
Be honest and open – good performance management relies on a good relationship.
Keep it simple – keep the emphasis on development and performance, and keep the paper work and process simple.
Keep in touch – use mini-reviews to build towards a performance review.
Make goals interesting, challenging and engaging – this is what really motivates people to achieve.
Pull together – align individual’s goals with team and organizational goals.
Build on strengths more than correcting weaknesses – nobody is good at everything.
Get the mix right – focus on complementary skills within your team.
People like to perform! – believe it or not but people like to work, achieve, be praised, and know that their contributions
are valued.
Give praise – recognise and acknowledge good performance as soon as it happens.
Let people know how they are doing – give regular, timely feedback, either motivational, formative, or both.
Get the right tools for the job – make sure that the resources are in place to help you run the process, and to enable
people to demonstrate performance improvement.
They perform, you perform – remember, as a manager your performance depends on your team, when they perform
well, it’s easier for you to perform well.
Be an example – so, set the standard by example. To motivate others be motivated yourself, it’s infectious! Strive to be a
better manager.
Motivate, motivate, motivate – the missing element from most performance management processes? People will only
achieve superior performance if they want to.
Use PERFORM to outperform – The PERFORM model has been designed to help you create the conditions that will
motivate people to superior performance.

18. Importance of Performance
Appraisal
Enhances motivation & productivity
Assists in validation studies
Detects problems
Helps evaluate change efforts
Provides basis for making decisions
Differentiates employees in job-related areas
Helps ensure legal compliance

19. Benefits of Performance Appraisal
Provide a record of performance over a period
of time.
Provide an opportunity for a manager to meet &
discuss performance
Provide the employee with feedback about
their performance
Provide an opportunity for an employee to
discuss issues and to clarify expectations
Can be motivational with the support of a good
reward and compensation

20. Disadvantages
If not done appropriately, can be a negative
experience.
very time consuming, especially for a manager
subject to rater errors & biases.
If not done right can be a complete waste of time.
Can be stressful for all involved

21. Disadvantages

22. Performance Appraisal
at Pepsi-Cola International
Pepsi-Cola International (PCI), with operations in over 150 countries, has
devised a common performance appraisal system that focuses on motivating
managers to achieve and maintain high standards of performance.
Administrative consistency is achieved through the use of a performance
appraisal system of five feedback mechanisms - instant feedback, coaching,
accountability based performance appraisals, development feedback, and
a human resource plan. The common system provides guidelines for
performance appraisal, yet allows for modification to suit cultural differences.
For example, the first step of instant feedback is based on the principle that
any idea about any aspect of the business or about an individual’s
performance is raised appropriately and discussed in a sensitive manner. The
instant feedback message can be delivered in any culture; the important
thing is not how it is done but that it is done. The purpose of instant feedback
is always to improve business performance, not to criticise cultural styles. Using
this system, PCI tries to balance the cultural and administrative imperatives of
successful managing the performance of a diverse workforce.
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23. Potential Appraisal
The potential appraisal refers to the appraisal i.e. identification
of the hidden talents and skills of a person. The person might
or might not be aware of them. Potential appraisal is a future
– oriented appraisal whose main objective is to identify and
evaluate the potential of the employees to assume higher
positions and responsibilities in the organizational hierarchy.
Many organisations consider and use potential appraisal as a
part of the performance appraisal processes

24. The purposes of a potential
review are:
• To inform employees of their future prospects;
• To enable the organisation to draft a management
succession programme;
• To update training and recruitment activities;
• To advise employees about the work to be done to enhance
.Their career opportunities.
Potential appraisal helps to identify what can
happen in future so that it can be guided and
directed towards the achievement of individual and
organizational growth and goals. Therefore,
potential should be included as a part of the
Performance appraisal in organisations.

26. How to get best performance appraisal
from your boss?
1) Decode what's your job profile
A great place to start is a detailed list of job duties or, if it is available, an official job
description, from your manager or human resources department. It's better to start off with
clarity as to what you are expected to deliver. It will channelise your actions in that
direction and get you maximum output.
2) Engage yourself in the process
Be an active participant in establishing your goals from the start. Focus on key objectives
and define a plan that makes sense for you and your employer. Be engaged all along, it's
a good and helpful practice.
3) Set reasonable goals
When establishing goals, make sure they are meaningful. There should be value in doing
a particular activity. Each goal must be relevant to the work you do each day and should
be mutually agreed upon by you and your manager. Also, going over-board with goals
will only impress your boss for that moment, remember. So sign up for goals which are
reasonable, and gives you a sense that you can achieve them.
4) View goals as a project plan
Make your goals your mission for the year. Keep goals current, track progress and
contributions, and update goals as appropriate to reflect any changes in your role or
responsibilities. Remember that although goals are set to achieve certain work-based
objectives, they can also yield personal rewards in the form of professional and
developmental growth and greater earnings potential.
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27. 5) Take note of your work daily
No one pays closer attention to your work than you do. The annual performance review, and the promotion
or salary increase that often goes with it, can be enhanced significantly if you highlight your
accomplishments clearly and make a case for yourself. So, as you work, document your
accomplishments along the way and let your boss know when you have reached established milestones.
Good time don't stay always so, if you reach a stumbling block along the way, seek advice on how to best
resolve the issue
6) Show an interest in additional training
If you don't have access to the tools or training necessary to achieve a particular objective, be sure to ask.
Your employer will see that you want to improve the quality of your work and are interested in professional
growth. Additional training will make you more valuable to the organization and set you up for the next
step in your career.
7)Talk to your boss on performance
Have an open dialogue with your boss throughout the year so you have a better sense of where you stand
and how your progress is being perceived. Don't leave all of this discussion for the annual review. Try to
conduct brief, informal discussions throughout the performance review period. Taking time to check shows
your boss that you are interested in performing well and are working hard toward achieving goals.
8) Share positive feedback
Feedback from colleagues is also valuable when you are preparing for a review. If someone sends you a
thank you via e-mail or on paper, keep it on file. If someone says something complimentary, ask him or her
to put it in writing.
9) Utilise performance review feedback
When you get constructive feedback during a performance review, listen to it carefully and objectively. If
part of the feedback is difficult to hear, try not to appear defensive. Instead, take time to consider what
was said and try to make improvements in your work habits to avoid similar comments in the future.
Companies value employees who can accept professional guidance.
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