Performance management appraisal
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I. Contents of getting performance management appraisal
Perhaps you are currently labouring with a paper based performance appraisal process and have
been asked to look for an online appraisal system to make life easier, but when you look at the
market place it is impossible to tell whether you are comparing like with like. So is there a
difference between performance appraisal and performance management and if so, what is it?
How can you ask the right questions when comparing systems and ensure that you are making
the right choice?
You may have heard various guru’s selling their books and declaring that “Performance
appraisal’s don’t work” or the “Performance appraisal is dead”. When we step aside from the PR
angle that such contentious statements are designed to encourage, they actually have a point.
You may think that surprising that we, performance management system would agree with such
radical statement, but here’s why.
A performance management system should encourage year round focus on performance.
A performance appraisal and by definition a performance appraisal system is about a once (or
possibly twice) a year discussion between the manager and employee. Recent research from the
CIPD shows that about 65% of staff surveyed had received an annual appraisal in the past 3
years and only 33% of them had found it motivational. Complaints included “tick box” exercise
and “my manager was clearly going through the motions”. But that is of course the issue –
anything that is once a year and completed because of an HR driven deadline rather than part of
ongoing and engaging performance discussion is going to miss the mark. But it isn’t the
appraisal that is at fault here – it is the way we implement it.
Performance management on the other hand is a year round process – in fact perhaps it is better
seen as ‘Managing Performance’. It includes objective setting, regular 121’s and feedback,
discussion about development and future aspirations and perhaps twice a year the conversation is
about appraising performance. It has been shown that organisations that have a culture of year
round performance management in this way have higher engagement figures, better alignment,
increased productivity and profitability.
But back to our original point – what is the difference between a performance appraisal (or
review) system and a performance management system? The answer is a lot – but you may need
to dig beneath the marketing to make sure a performance appraisal system isn’t mis-representing
itself as a performance management system. Many HR database or payroll vendors will say that
they offer performance appraisal – this is usually an appraisal form and a repository for it.
Essentially this is just a slightly different way of storing your paper based appraisal form and is
not going to encourage year round management of performance.
A performance management system needs to offer more than just objective setting and appraisal
forms. It should include the opportunity for personal development planning and talent
management discussions. It should be accessible to managers and employees all year rounds and
provide automated prompts and reminders. It should allow you to break objectives down into
milestones, encouraging interim review and ideally allow you to record interim meetings or
121’s and actions. These are the year round management activities that actually increase
motivation and enhance performance. Find something that ticks all these boxes and you have
yourself a tool that can accelerate business performance and help you retain talent – that’s worth
having, and that is not a performance appraisal system, it is quite different – a performance
III. Performance appraisal methods
1. Essay Method
In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage – It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.
2. Behaviorally Anchored Rating Scales
statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages – helps overcome rating
errors. Disadvantages – Suffers from distortions
inherent in most rating techniques.
3. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages – Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages – Rater’s biases
4. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages – economy, ease of administration, limited
training required, standardization. Disadvantages – Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
Advantages of Ranking Method
Employees are ranked according to their
It is easier to rank the best and the worst
Limitations of Ranking Method
The “whole man” is compared with another
“whole man” in this method. In practice, it is very difficult
to compare individuals possessing various individual
This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
When a large number of employees are working,
ranking of individuals become a difficult issue.
There is no systematic procedure for ranking
individuals in the organization. The ranking system does
not eliminate the possibility of snap judgements.
6. Critical Incidents Method
The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages – Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages – Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.
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