1. Performance Appraisal
Dr. Badaruddin Ibrahim
© Dr. B 2013

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. How to overcome biases in PA?
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10. 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

11. 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