FREE online courses on Performance and Potential Appraisal - The Performance Appraisal Process

 

Performance appraisal is planned, developed and implemented through a series of steps.

 

Establish performance standards

 

Appraisal systems require performance standards, which serve as benchmarks against which performance is measured. To be useful, standards should relate to the desired results of each job. What about those appraisals which are carried out without any clear-cut criteria. Observe the following case:

 

Peter, who had just finished his first year as an office assistant was summoned to his manager's office for his annual performance review. Slightly uneasy, but confident that he has done a good job, Peter arrived at his manager's office at the appointed hour. After the initial exchange of pleasantries, Peter was given a copy of an appraisal form, which was completed as follows:

Yearly Performance Review

                   Name of the Employee:        Mr.Peter

                   Date:  31.12.1999

                   Use the following scale to rate the employee

                   (1 poor 2 below average 3 average 4 good 5 excellent)

a. Absenteeism         1 2 3 4 5

b. Quality of work     1 2 3 4 5

c. Quantity of work   1 2 3 4 5

d. Attitude toward the job   1 2 3 4 5

e. Personality-related factors 1 2 3 4 5

f. Interpersonal relations      1 2 3 4 5

(Bold letters indicate the actual rating by the manager as on 31.12.1999)

Supervisor___________       Employee_________

 

Peter got the shock of his life. Why did he not receive any negative feedback about his performance until now? How did the manager rate his personality and interpersonal behavior so badly? Looking at his unhappy reactions, the manager proceeded to explain how he has failed to win the confidence of his teammates. He also advised Peter to talk to him directly instead of writing to the Director of the company directly. Speechless and dejected, Peter left the office, wondering as to what he must to do to improve his performance and obtain better grades.

 

To avoid embarrassments of this kind, performance standards must be clear to both the appraiser and the appraisee. The performance standards or goals must be developed after a thorough analysis of the job. Goals must be written down. Just talking about them is not enough. They must be measurable within certain time and cost considerations. For example, the regional sales officer may be asked: “The sales of color television sets in Ghaziabad must increase by 1000 per month in the next 6 months and the budget toward promotional expenses would Rs 5,000  per month.”

Table: Criteria for Identifying and Writing Good Performance Goals

 

• What is the task to be accomplished?
• What will it look like when it is accomplished?
• When must it be completed?
• What are the cost considerations?

 

Communicate the standards

 

Performance appraisal involves at least two parties; the appraiser who does the appraisal and the appraisee whose performance is being evaluated. Both are expected to do certain things. The appraiser should prepare job descriptions clearly; help appraisee set his goals and targets; analyze results objectively; offer coaching and guidance to appraisee whenever required and reward good results. The appraisee should be very clear about what he is doing and why he is doing. For this purpose, the performance standards must be communicated to appraisees and their reactions be noted down initially. If necessary, these standards must be revised or modified. As pointed out by De Cenzo and Robbins, “too many jobs have vague performance standards and the problem is compounded when these standards are set in isolation and do not involve the employee”.

 

Measure actual performance

 

After the performance standards are set and accepted, the next step is to measure actual performance. This requires the use of dependable performance measures, the ratings used to evaluate performance. Performance measures, to be helpful must be easy to use, be reliable and report on the critical behaviors that determine performance. Four common sources of information which are generally used by managers regarding how to measure actual performance: personal observation, statistical reports, oral reports and written reports.

 

Performance measures may be objective or subjective. Objective performance measures are indications of job performance that can be verified by others and are usually quantitative. Objective criteria include quality of production, degree of training needed and accidents in a given period, absenteeism, length of service, etc. Subjective performance measures are ratings that are based on the personal standards of opinions of those doing the evaluation and are not verifiable by others. Subjective criteria include ratings by superiors, knowledge about overall goals, contribution to socio-cultural values of the environment. It should be noted here that objective criteria can be laid down while evaluating lower level jobs which are specific and defined clearly. This is not the case with middle level positions that are complex and vague.

Table: Measurement of Performance of a Telephone Operator

 

A telephone company supervisor, while measuring the performance of a telephone operator may observe the following:

 

• Use of company procedures such as staying calm, following company rules and regulations, etc.
• Pleasant phone manners such as speaking politely in a courteous tone.
• Call-placement accuracy: placing operated assisted calls accurately.

 

The rater's monitoring of an operator's calls is direct observation. The actual on-line performance is evaluated directly. For example, if a written test is held for telephone operators about company rules and regulations for handling emergency calls, international calls, etc., then the process of evaluation becomes indirect as it is based on a written report about the performance of operators in the test.

 

Compare actual performance with standards and discuss the appraisal

 

Actual performance may be better than expected and sometimes it may go off the track. Whatever be the consequences, there is a way to communicate and discuss the final outcome. The assessment of another person's contribution and ability is not an easy task. It has serious emotional overtones as it affects the self-esteem of the appraisee. Any appraisal based on subjective criteria is likely to be questioned by the appraisee and leave him quite dejected and unhappy when the appraisal turns out to be negative.

 

Taking corrective action, if necessary

 

Corrective action is of two types. The one which puts out the fires immediately and other one which strikes at the root of the problem permanently. Immediate action sets things right and get things back on track whereas the basic corrective action gets to the source of deviations and seeks to adjust the difference permanently. Basic corrective steps seek to find out how and why performance deviate.