1. PERFORMANCE APPRAISAL SYSTEM
DR. J.ARUL SURESH
LOYOLA COLLEGE, CHENNAI

2. INTRODUCTION
An organization's goals can be achieved only when people put in their best efforts.
How to ascertain whether an employee has shown his best performance on a given job? The answer is Performance Appraisal.
Employee assessment is one of the fundamental jobs of HRM.

3. MEANING
Performance Appraisal may be understood as the assessment of an individual’s performance in a systematic way, the performance being measured against such factors as
Job knowledge
Quality and Quantity of output
Initiative
Leadership abilities
Supervision
Dependability
Co-operation
Judgement
Health
Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed.

4. DEFINITIONS
“Performance Appraisal is a method of evaluating the bahaviour of employees in the workspot, normally including both the quantitative and qualitative aspects of job performance”
- Michael R.Carrel (1982)
“Performance Appraisal is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development”
- Dale S. Beach (1980)

5. PURPOSE OF PERFORMANCE APPRAISAL
To create and maintain a satisfactory level of performance (Probationary employees..)
To effect promotions based on competence and performance
To assess the training and development needs of employees.
To contribute to the employee growth and development through training, self and management development programmes.
To help the superiors to have a proper understanding about their subordinates.
To guide to job changes with the help of continuous ranking.

6. To facilitate fair and equitable compensation based on performance.
To facilitate for testing and validating selection tests, interview, techniques through comparing their scores with performance appraisal ranks. (Determine HR Programmes such as selection, training, and transfers have been effective or not)
To provide information for making decisions regarding lay off, retrenchment etc.
To ensure organisational effectiveness through correcting employee for standard and improved performance , and suggesting the change in employee behaviour

7. IMPORTANT FEATURES OF PERFORMANCE APPRAISAL
Performance appraisal is the systematic description of an employee’s job relevant strengths and weakness
The basic purpose is to find out how well the employee is performing the job and establish a plan of improvement.
Appraisal process is always systematic in the sense that it tries to evaluate performances in the same manner using the same approach.
Appraisals are arranged periodically according to definite plan.
Performance appraisal is not job evaluation. It refers to how well someone is doing as assigned job. (Job evaluation determines how much a job is worth to the organisation and therefore what range of pay should be assigned to the job)
Performance is a continuous process in every large scale organisation.

8. PERFORMANCE APPRAISAL METHODS
RANKING METHOD
The oldest and simplest method of performance appraisal is to compare one man with all other men and place him in a simple rank order.
In this way ordering is done from best to worst of all individuals comprising the group.
The rater first finds the employee with the highest performance and employee with the lowest performance in that particular job category and the rates the former as the best and the latter as the poorest.
Then the rater selects the next highest and next lowest and so on until he rates all the employees in that group.
Ranking can be relatively easy and inexpensive but its reliability and validity may be open to doubt.
It may be affected by rater bias or varying performance standards.
Ranking also means that somebody would always in the backbench. It is possible that the low ranked individual in one group may turnout to be a superstar in another group.

9. RATING SCALE METHOD
Rating scales compare individual performance to an absolute standard.
In this method judgments about performance are recorded on a scale.
This method is also known as linear rating scale.
The appraisers are supplied with printed forms , one for each employee.
These forms contains a number of objectives, behaviours, traits based qualities and characters to be rated like quality and volume of work , job knowledge, dependability, initiative , attitude etc. in the case of workers, and analytical ability, creative ability, leadership, emotional stability in the case of managerial personnel.
This rating scale is simple which permits many employees to be quickly evaluated.
The major drawback to these scales is their subjectivity and low reliability.

10. RATING SCALE Employee name : Dept : Job title :
unsatisfactory / Fair / Satisfactory/ Good
quality of work volume of work under
normal working condition.
Quality of neatness and accuracy of work
Knowledge of job, a clear understanding
Of the factors connected with the job
Cooperation , willingness ability to work
With others to produce desired goals

11. PAIRED COMPARISION METHOD
Ranking is more reliable and easier under this method.
Employee is compared with all other employees in the group, for example when there are five employees to be compared then “A” s performance is compared with that “B” s and decision is arrived at as to whose is the better or worse.
Next “B” is also compared with all others. Since “A” is already compared with “B” , this time B is to compared with only C , D and E.
By this method , when there are five employees , fifteen decisions are made (comparisons).
The number of decisions to be made can be determined with the help of formula “n(n-2)”

12. FREE ESSAY METHOD
This technique is very common for appraising individuals for professional positions.
In this technique the rater , who may be the former employer, teacher, or associate of the candidate, is requested to give in writing and informed and honest account of the candidate’s strengths, weakness, potentials, and so on.
The biggest drawback of this technique is the account’s variability in length an content.
Hence it is difficult to compare two essay appraisals

13. FORCED CHOICE METHOD
In this the rater is given a series of statements about an employee.
Its primary purpose is the correct tendency of a rates to give consistently high or low ratings to all the employees.
The rater is forced to select statements which are readymade.
The advantage of this method is the absence of personal bias in rating.
The disadvantage is that the statements may not be properly framed –they may not be precisely descriptive of the ratee’s traits.
These statements are arranged in blocks of two or more, and the rater indicates which statement is most or least descriptive of the employee.
Typical statements are
1. Learns fast………….. Works hard
2. work is reliable………performance is a good example
3.Absents often………others usually tardy