Performance Appraisal Overview

Overview

This lecture explains the importance, process, and challenges of employee performance appraisal and management in organizations, focusing on definitions, methods, objectives, and common appraisal flaws.

Introduction to Performance and Appraisal

• Performance measures an employee’s output/results within a specific job, role, or timeframe.
• Performance review evaluates and assesses employee output using systematic and scientific methods.
• Performance management is an ongoing communication process between employee and supervisor to set, monitor, and improve work expectations.

Setting Expectations and Job Description

• Clear job descriptions (or terms of reference) outline employee duties and guide performance.
• Proper orientation ensures employees know expectations and how their work contributes to organizational goals.
• Teamwork is essential; employees must understand both individual and team roles.

Factors and Process in Performance Management

• Performance management includes: action specification, expectation setting, performance evaluation, feedback, and result management.
• Employees must know how their performance is measured and consequences of not meeting targets.
• Removing barriers (e.g., lack of resources or training) helps employees meet goals.

Importance of Measuring Performance

• Measurement provides data for feedback, recognition, improvement, and management decisions.
• Comparing before-and-after data demonstrates employee improvement or areas for development.
• Clear goals and performance metrics justify rewards and promotions.

Approaches and Flaws in Appraisal

• Traditional appraisals focus on past results or employee development.
• Common flaws: limiting reviews to past accountability, tying appraisals solely to salary, and bias in credit or recognition among supervisors and subordinates.

Objectives and Benefits of Performance Appraisal

• Identifies candidates for promotion, transfer, or demotion.
• Reveals employee strengths and weaknesses for training or delegation.
• Supports career planning, supervision, team assessment, and organizational decisions.

Performance Criteria and Measurement Indicators

• Performance criteria: the standards and metrics used to evaluate employees, based on job descriptions.
• Key indicators: quantity, quality, timeliness, cost-effectiveness, absenteeism, creativity, policy adherence, personal habits, and appearance.
• Criteria must be reliable, consistent, and free from bias or external contamination.

Sources and Methods of Appraisal

• Evaluators can be supervisors, self, subordinates, customers, team members, professionals, or 360-degree multi-rater.
• Appraisal methods include ranking, paired comparison, forced distribution, critical incident, checklist, graphic rating scales, BARS, management by objectives (MBO), and 360-degree feedback.

Tips for Effective Appraisal Systems

• Design clear, user-friendly appraisal forms aligned with company values.
• Ensure communication, training, and orientation for both appraisers and employees.
• Use results for constructive feedback and regularly review the appraisal system.

Appraisal Feedback and Action Planning

• Appraisal discussions should address progress, challenges, sources of ineffective performance, solutions for improvement, career alignment, and specific action steps for future objectives.

Key Terms & Definitions

• Performance appraisal — Evaluation of an employee's job performance and output.
• Performance management — Ongoing process ensuring employee understanding and achievement of work goals.
• Job description/Terms of Reference — Document detailing duties and responsibilities of a role.
• Performance criteria — Standards or metrics for judging performance.
• Halo effect — Bias where one positive trait influences overall appraisal.
• Recency effect — Tendency to focus on recent behavior rather than overall performance.

Action Items / Next Steps

• Choose and analyze one performance appraisal problem (e.g., halo or recency effect) for group work.
• Post your chosen problem in Google Classroom; maximum two groups per topic.
• Prepare a word document summary and be ready for verbal presentation—PowerPoint optional.
• Remember the rubric: problem definition (40%), solution (40%), discussion/delivery (20%).