1. Performance Appraisal
Presented by:
Nur Hasanah, SE, MSc

2. Meaning
Performance appraisal is a process in which organizations evaluate or assess their employees’ performances.

3. 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

4. Points to be noted
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?

5. 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)?

6. 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?

7. Managers must decide on the frequency of the performance appraisals
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.

8. Managers must decide who conducts the performance appraisal
Managers must decide who conducts the performance appraisal. Immediate supervisors are the frequent choice, but, they are by no means the only choice.

9. 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.

10. Performance appraisal process
Job analysis
Performance standards
The performance appraisal system
Assessing performance
Performance review

11. 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

12. Future-oriented performance appraisal methods
Self appraisals
Psychological appraisals
MBO
Assessment centers

13. Perceptual errors in evaluation
Halo effect
Stereotyping
Attributions
Recency effects
Leniency/strictness errors
Central tendency errors

14. Common problems with unsuccessful performance appraisal systems
A poorly defined appraisal system
A poorly communicated appraisal system
An inappropriate appraisal system
A poorly supported appraisal system
An unmonitored appraisal system

15. Criteria for a successful performance appraisal system
Construction reflects clear objectives
Endorsement by management and employees
Flexibility to adapt
Predictable timing of appraisal
Performance dialogue
Appropriate appraisal form
Periodic system checks

16. Management guidelines
Performance appraisals should be based on a thorough job analysis that is current regarding both job descriptions and job specifications.
Performance standards should be developed from the job analysis as input into the performance appraisal.
Performance appraisals should evaluate a number of specific behaviors as opposed to evaluating “overall job performance” using one or a few global measures.

17. The performance review discussion should be a two-way communication between the evaluator and the employee.
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.
The purpose of the performance appraisal and the objectives of the organization must be considered carefully before deciding on a performance appraisal method.

18. 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.
The validity of the performance appraisal system should be examined at regular intervals.