Performance Appraisal
Presented by:
Nur Hasanah, SE, MSc
Meaning
• Performance appraisal is a process in which
organizations evaluate or assess their employees’
performances.
Advantages
Improving employees’ performances
Compensation adjustment
Placement decisions
Showing training and development needs
Career planning and development
Staffing failure
Showing inaccurate information
Job design failure
Fairly placement
External challenges
Points to be noted
1. Managers should decide on the objectives
and purpose for the performance
appraisal. Will the evaluations be for
correcting problems, for determining
rewards, or for other purposes? Will the
evaluations be individual or group based?
2. Managers can choose between formal and
informal procedures for the performance
appraisal. Should the reviews be structured
and occur at a specific point in time (formal),
or should the manager and the subordinate
discuss problems and ways to correct them as
they occur (informal)?
3. Performance appraisal formats can emphasize
more objectivity versus subjectivity. Should
managers use their own judgements when
evaluating subordinates, or should more
concrete factors such as number of units
produced and absenteeism be used to evaluate
an employee?
4. Managers must decide on the frequency
of the performance appraisals. Most
often, yearly appraisals are performed.
However, with the new job procedures in
which feedback about performance is
given monthly, daily and even hourly,
perhaps less frequent formal reviews
could be performed. On the other hand, if
the job provides no specific feedback
about performance, yearly intervals may
be too long between appraisals.
5. Managers must decide who conducts the
performance appraisal. Immediate supervisors
are the frequent choice, but, they are by no
means the only choice.
New approach of performance
appraisal
• 360-degree feedback is the process by which an
individual’s performance is assessed through
confidential feedback from supervisors, peers,
subordinates, customers, and individual himself.
Performance appraisal process
Job analysis
Performance standards
The performance appraisal
system
Assessing performance
Performance review
Past-Oriented Performance appraisal
Methods
Rating scale
Checklist
Critical incident
method
Field review
method
Observation and
test of
performance
Group evaluation
method: ranking,
grading, point
allocation method
Future-oriented performance appraisal
methods
Self
appraisals
Psychological
appraisals
MBO
Assessment
centers
Perceptual errors in evaluation
Halo effect
Stereotyping
Attributions
Recency effects
Leniency/strictness
errors
Central tendency
errors
Common problems with unsuccessful performance
appraisal systems
1.
2.
3.
4.
5.
A poorly defined appraisal system
A poorly communicated appraisal system
An inappropriate appraisal system
A poorly supported appraisal system
An unmonitored appraisal system
Criteria for a successful performance
appraisal system
1.
2.
3.
4.
5.
6.
7.
Construction reflects clear objectives
Endorsement by management and employees
Flexibility to adapt
Predictable timing of appraisal
Performance dialogue
Appropriate appraisal form
Periodic system checks
Management guidelines
1. Performance appraisals should be based
on a thorough job analysis that is current
regarding both job descriptions and job
specifications.
2. Performance standards should be
developed from the job analysis as input
into the performance appraisal.
3. Performance appraisals should evaluate a
number of specific behaviors as opposed
to evaluating “overall job performance”
using one or a few global measures.
4. The performance review discussion
should be a two-way communication
between the evaluator and the employee.
5. The performance appraisal should be
used not only as a means of evaluating
performance but also as a means of
motivating and developing the employee.
6. The purpose of the performance
appraisal and the objectives of the
organization must be considered
carefully before deciding on a
performance appraisal method.
7. In general, a successful performance appraisal
system should be built around clear objectives,
have the support of both management and
employees, be flexible enough to adapt to
organizational changes, and foster open
discussions between supervisors and
employees.
8. The validity of the performance appraisal
system should be examined at regular intervals.