Performance Appraisal Dr. Badaruddin Ibrahim © Dr. B 2013

Overview Most important and most difficult task of the supervisor’s job. Formal and informal appraisal Formal appraisal – systematic procedure (established organization) Informal appraisal – no formal procedure (small business) Formal appraisal system contain an informal element e.g. supervisor general comments or feedback on employee’s performance © Dr. B 2013

Environmental factors Performance How well an employee is fulfilling the requirements of the job and normally based on 3 factors Effort – how hard a person works Ability – person’s capability Direction – how well person understands what is expected on the job Environmental factors Effort Ability Direction Performance © Dr. B 2013

Job Descriptions/Specifications Job description - characteristics of the job and types of work that are performed in the job Job Specification – qualifications necessary to perform a job Job Analysis – process of determining the pertinent information regarding a specific job Supervisor provide necessary and accurate information to human resource department to perform Job Analysis © Dr. B 2013

Performance Appraisal (PA) A process involves communicating to an employee on how well he/she is performing the job and establishing a plan for improvement. 3 principal purpose: To improve employee performance in the present job To prepare employees for future opportunities that may arise in the organization To provide a record of employee performance that can be used as a basis for future management decision © Dr. B 2013

PA Methods Graphic rating scale – supervisor is asked to evaluate an employee on such factors as initiative, dependability, cooperativeness, and quality of work Essay appraisal – supervisor is asked to write a series of statements about an employee’s past performance, potential for promotion, and strengths and weaknesses Checklist – supervisor does not actually evaluate but merely records performance Forced-choice rating – requires supervisor to choose which of 2 statements is either most or least applicable to the employee being reviewed Critical-incident appraisals – keeps a written records on unusual incidents that show both positive and negative actions by an employee Work-standard approach – objective measures of employee’s work performance Ranking method – rank the employee, e.g. most valuable to least valuable Management by objectives (MBO) – supervisor employee mutual agreement on job objectives and how they will be accomplished © Dr. B 2013

Frequency of PA Normally once a year Employees deserve to know how well they are doing Supervisor should be aware of the necessity for more frequent informal appraisals for new employees or employees who are being retrained © Dr. B 2013

Biases in PA Leniency – grouping of ratings at the positive end instead of spreading them through out the performance scale Halo effect – supervisors allow a single prominent characteristic of an employee to influence their judgment on each of the items in the performance appraisal. Personal preferences and prejudice – e.g. appearance, social status, race, sex, etc. © Dr. B 2013

How to overcome biases in PA? © Dr. B 2013

Handling the poor performer Improve the employee’s performance to acceptable level Transfer the employee to a job that fits his/her ability Demote the employee to a job that he/she can handle Terminate the employee © Dr. B 2013

Review Questions Define performance appraisal (PA) Identify at least 3 methods used in PA Explain one method on how to handle poor performer © Dr. B 2013