WITH THE NAME OF ALLAH THE MOST MIGHTY AND MERCIFUL. 1

Chapter No 12 Performance Appraisal 2

Performance Appraisal is a system of review and evaluation of an individual or team job performance. It is the process of defining “expectations” for employee’s performance” Measuring, evaluating against these “expectation” and providing “feedback”. 3

Uses of Performance Appraisal 1) Performance Improvement: Performance feed back allows the employee, the manager and personal specialist to intervene with appropriate actions to improve performance. 2) Compensation Adjustment: Performance evaluations help decision makers determine who should pay more. Many firms use merit base for compensation system those employees who perform excellent they will be paid more reward. 4

Conti 3) Placement Decision: Promotions, transfer, and demotion are usually based on past or anticipated performance. Often promotion are reward for past performance. 4) Training and Development: A performance appraisal should point out an employee’s specific need for training and development. By Identifying deficiencies that adversely affect performance, HRM are able to develop T&D programs that permit individuals to build on their strengths and minimize their deficiencies. 5

Conti 5) Career Planning and development: Performance feedback guide career decisions. The feedback that provide by manager, employee can plan for their career. 6) Internal employee relation: performance appraisal data are also frequently used for decisions in areas of internal employee relations including motivation, promotion, demotion, termination, layoff, and transfer. 6

What to Evaluate what aspect of a person’s performance should an organization evaluate. The most common set of appraisal criteria are traits, behaviors, and task outcome. a)Traits: Many employees in organization are evaluated on the basis of certain traits such as attitude, appearance, initiative (creative). b)Behaviors: How an individual behave to assign task. When an individual task outcome is difficult to determine, it is common to evaluate the person’s task related behavior. 7

Conti c) Task outcomes: the result of the assign task will be evaluated that how he perform the task. 8

Appraisal Process Establish performance standards with employees Mutually set measurable goals Measure actual performance Compare actual performance with standards Discuss the appraisal with the employee If necessary, initiate corrective action 9

Performance Appraisal Method Different Methods are use for Employee Performance Appraisal, some of them are as following: 1)Rating Scale: Rating Scale is the oldest and most widely used performance appraisal method. In this method employees are assign rates according to define factors. The factor chosen for evaluation are typically of two types: job related and personal characteristics. 2)Checklist: The checklist method requires the rater to select words or statements that describe the employee’s performance and characteristics. Here with or without rater knowledge the HR department may assign weights to different items on the checklist depending on each items importance. The result is called weighted checklist. 3)Forced Choice Method: the forced choice method requires the rater to choose the most descriptive statement in each pair of statements about the employee being rated. 10

Conti 4) Behaviourally anchored rating scales: Method is used to identify and evaluate relevant job-related behaviour of employees. It is similar to Critical Incident Method. 5) Work Standards: in this method evaluator compare each employee performance to a predetermined standard. 11

Conti 6) Management By Objective (MBO): A performance appraisal method that includes mutual objective setting and evaluation based on the attainment of the specific objective. In this method the individual assign some specific objectives and on the basis of the achievement of objective the individual is evaluated. 12

Problems in performance Appraisal 1)The Halo Effect: this error occur when the rater perceive one good or bad factor and on the basis of that factor he assign rates. 2) The error of Central Tendency: When evaluator evaluates everyone as average, the result is call central tendency. It happens when: (a)Supervisors cannot subjectively evaluate employee’s performance due to lack of ability and knowledge about the work. (b)Fear that he will have to explain / justify evaluating individuals “Very high or poor ” 13

Conti 3) Leniency and strictness errors Leniency: Occurs when raters tends to grade high Supervisor feel … high evaluation no complaints Leniency seldom creates good feelings among employees Good performers will complain about such supervisors, as he does not get credit for his hard work Strictness: Occurs when raters is too harsh in evaluation. Sometime the strictness bias result because the rater wants others to think he or she is a “tough judge” of people’s performance. 14

Conti 4) Cross cultural biases: Evaluator expects behaviour of employees according to his culture When employees from different cultures are evaluated. The evaluator assign low rates because of cultural differences. Supervisors may apply their cultural expectations, to someone who has different set of beliefs or behaviours these are generally resisted by employees. 15

Conti 5) Recent Behavior Bias: it is natural to remember recent behavior more clearly than action perform in the past. If the most recent behavior is good the rater assign high rate and if the recent behavior is bad some time the rater assign low rate. 16

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