The PDF gives insights on an important HR concept i.e., Performance Appraisal

1. PERFORMANCE
APPRAISAL
DR SHIKHA RANA
ASSISTANT PROFESSOR -SELECTION GRADE
IMS UNISON UNIVERSITY

2. Introduction to Performance
Appraisal
 *95% of HR leaders were unhappy with the traditional annual performance review
process, and 60% of employees felt that performance reviews did not help improve their
performance in any way: A Survey
*A 2018 Global Culture Study revealed that continuous performance feedback is one the
four most underutilized parameter in employee engagement and culture improvement.
*Research shows that people become high performers by identifying specific areas where
they need to improve and then practicing those skills with performance feedback.
*Consistent evaluation, coaching conversations and upskilling through technology are
some of the ways through which organisations can retain their employees.
*“82% of employees really appreciate receiving feedback, regardless if it’s positive or
negative.” And, other studies show that while 75% of employees feel feedback is
important, 65% of employees say they want more.
* Research Findings

4. Contents
Definition of Performance Appraisal (PA)
Brief overview of the evolution of Performance
Appraisal
Objectives of PA
What should be Rated in PA?
Process of PA
Techniques of PA
Performance Appraisal Feedback
Errors in conducting PA
Industry practices

5. Definition and Meaning of PA
“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”.
-Edwin Flippo
“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 S Beach
Hence, performance appraisal is a technique utilized in a systematic
and factual way to evaluate the actual performance of employees
against the standards set by the organization followed by feedback
from the senior for examining the relative worth or competency of the
employee while performing the task (Dessler, 2011)

6. DEVELOPMENT OF PERFORMANCE
APPRAISAL
INFORMAL BEGINNING: BY ROBERT OWEN
IN EARLY 1800s
FORMAL BEGINNING: EARLY 1900
ADOPTED BY US ARMY DURING FIRST
WORLD WAR
MAN TO
MAN
RATING
GRAPHIC
RATING
SCALE
6

7. PERFORMANCE APPRAISAL DURING
1940s
FOCUS WAS MORE ON REDUCING RATING
ERRORS AND BIASES
FORCED CHOICE
DISTRIBUTION METHODS
CRITICAL INCIDENTS
METHODS
7

8. PERFORMANCE APPRAISAL 1950-1990
EMPLOYEE INVOLVEMENT,
SELF ASSESSMENT,
FEEDBACK, CREATING
BENCHMARKS AND RESULT
ORIENTATION
8

9. PERFORMANCE APPRAISAL AFTER
1990s- TILL NOW:
DECENTRALIZATION OF PERFORMANCE
APPRAISAL
PERFORMANCE-BASED REWARDS
EMPLOYEE INVOLVEMENT
FEEDBACK ORIENTED
PLATFORM FOR OPEN DISCUSSION
OVERALL PERFORMANCE MANAGEMENT
360 DEGREE
PERFORMANCE
APPRAISAL
POTENTIAL APPRAISAL
9
AI Driven Performance
Appraisal

10. Objectives of Performance
Appraisal
Identifying the gap between the actual and the desired performance.
Compensation Decisions
Training and Development of employees
Promotions & Transfers
Feedback
Self-development
Downsizing Decisions
Controlling mechanism

11. What should be Rated?
Quality
Quantity
Timeliness
Cost Effectiveness
Need For Supervision
Interpersonal Impact
Community Service

12. PROCESS OF PERFORMANCE APPRAISAL

13. Methods OF Performance Appraisal
Traditional Methods Modern Methods
Rating Scales MBO
Checklist 360 Degree Appraisal
Forced Choice Methods Assessment Centres
Forced Distribution Method Psychological Appraisal
Critical Incidents Methods HR Score Card
BARS
Field Review
Essay Method
Ranking Method

14. Performance Appraisal Feedback
Norman R. F. Maier addressed three types of appraisal interview
styles:
1) Tell & Sell
2) Tell & Listen
3) Problem Solving.

15. Errors in PA
Stereo Types
Halo Effect
Central Tendency Error
Leniency Error
Severity Error

16. Errors in PA

17. PA Practice in Banking Sector
State Bank of India which is one of the largest public sector commercial
bank in India in terms of assets, deposits, profits, branches, customers
and employees has rolled up a new system of performance appraisal and
that is “Career Development System” where the KRAs (Key Result Areas)
would be identified and employees having same profiles would be rated
against each other on the basis of five grades such as AAA, AA,A B and C.
Career Development system is originally meant to reward the top
performers but loosely linked with identifying low performers
Yes bank has adopted Yes-Talent Optimization Program which ensures
transparent, timely, unbiased and multi-level performance evaluation of
all the executives further the annual appraisal is extremely merit- based.

18. PA Practice in IT sector
Infosys has abandoned the old bell-shaped curve appraisal by introducing icount
where the individual performance would be focused and managers would be
empowered by being flexible in their operations. Further, icount will give
continuous feedback on short term performance to the employees throughout
the year and the basic idea behind iCount is that every employee must contribute
to the organization by an effective performance.
Accenture another big name in IT has also vanished the bell curve appraisal by
introducing a real time, progressive appraisal which focuses on setting priorities
jointly and rewarding the employees at the same time. The existing appraisal is
inclined towards “Performance Achievement” and opt for holistic approach
towards employee’s career growth. Additionally the leaders in Accenture also
coach the employees on their performance-related issues

19. IBM another leader in IT has dropped annual appraisal system by
launching “CheckPoint” performance appraisal technique which
will evaluate the quarterly performance of employees. In
checkpoint appraisal the performance would be monitored and
evaluated against five dimensions such as business results, client’s
success, skills, individual responsibilities to others and
innovations. The Performance Appraisal Techniques Across
Various Sectors in India new appraisal systems aims at improving
the productivity of employees by being target-oriented.

20. PA Practice in Pharma Sector
Piramal healthcare have a very comprehensive performance management
system known as eVolve where scores are calculated on the basis of Key
Result Areas and Critical Values like communication skills, initiatives, team
work, customer responsiveness etc in which self appraisal and appraisal by
superior is done adding the score of KRAs and Critical Values. Ninety
percent weightage is given to KRAs while ten percent weightage is given to
“Critical Attributes”.
GlaxoSmithKline pharmaceuticals follows 360 Degree
performance appraisal and goals are clearly defined and well
linked with the organizational strategies further supported by the
six GlaxoSmithKline Expectations which makes the performance
appraisal more result -oriented. Additionally the current appraisal
system strengthen the reward -based performance.

21. Conclusion
Robert J. Greene, CEO of Reward Systems
Inc., stated that performance appraisal is
the single largest factor which is solely
responsible for organizational
effectiveness. (Tyler, 2005).