Performance Appraisal
Human resources Management
Penemthsa Shiri Ananya
Batch-2 Group A
Contents:
1. Introduction
2. Purpose of Performance Appraisal
3. Performance Appraisal Process
4. Methods of Performance Appraisal
5. Challenges in HRM & Knowledge Management
6. Benefits of Performance Appraisal
7. Conclusion
Introduction to Performance Appraisal
Definition:
Performance appraisal is the process of evaluating individual job
performance as a basis for making objective personnel decisions.
Objectives:
•To motivate employees to adopt and maintain behavior that leads to
expected outcomes.
•To ensure employee alignment with organizational goals.
•To provide a basis for HR decisions such as promotions, training, and
compensation.
•To improve overall job performance and organizational productivity.
Purpose of Performance Appraisal
•Helps management decide on salary increases based on employee
performance.
•Encourages continuous improvement in job performance.
•Identifies when adequate facilities or resources are needed for
effective performance.
•Minimizes communication gaps between employer and employee.
•Serves as a fair basis for promotions.
•Helps determine training and development needs.
•Assists in making decisions about discharging underperforming
employees.
•Aids in transferring employees to suitable roles.
•Helps resolve employee grievances.
•Enhances job satisfaction and boosts employee morale.
Performance Appraisal Process
1. Establish Performance Standards:
• Align with organizational goals and job roles
• Use SMART criteria: Specific, Measurable, Achievable, Relevant, Time-bound.
• Define both expected results and observable behaviors
2. Communicate Performance Standards:
• Ensure clarity and mutual understanding.
• Explain expectations post-training or onboarding
3. Measure Performance:
• Use both quantitative metrics (cost, quality, timeliness) and qualitative feedback
(communication, leadership)
• Focus on what matters, not just what’s easy to measure
4. Compare Actual Performance to Standards:
• Use accurate, specific, consistent, and factual documentation.
• Highlight both achievements and areas for improvement
5. Discuss Appraisal with Employee:
• Provide constructive feedback and manage expectations Encourage self-evaluation and
open dialogue Maintain a calm, supportive tone
6. Implement Personnel Action
• Take timely reward or corrective actions (e.g., raise, training, PIP, termination)
• Identify and address root causes of underperformance early
Methods of Performance Appraisal
🔹 Traditional Methods:
•Ranking Method
Employees ranked from best to worst based on
merit; lacks detailed justification.
•Rating Scales
Numerical ratings based on criteria like output,
attendance, attitude; easy to apply.
•Critical Incidents Method
Records significant behaviors (positive or
negative) impacting performance.
Methods of Performance Appraisal
🔹 Modern Methods:
•Management by Objectives (MBO)
• Joint goal-setting using SMART goals
• Focus on measurable results
• Ideal for senior management
• Failure reasons: poor goal clarity, weak implementation
•360-Degree Feedback
• Feedback from peers, managers, subordinates & clients
• Enhances self-awareness & encourages development
• Risks: bias, fear of retribution, ineffective planning
•Behaviorally Anchored Rating Scale (BARS)
• Combines numeric ratings with specific behavioral
examples
• Reduces bias, improves clarity
• Time-consuming to create; hard for promotion decisions
Benefits of Performance Appraisal
1. Enhances Employee Performance
• Identifies weaknesses
• Provides constructive feedback
• Supports career development
2. Basis for Promotions & Transfers
• Rewards merit over seniority
• Identifies talent for growth
3. Salary Hikes & Compensation
• Links performance to pay
• Justifies bonuses and benefits
4. Aligns with Strategic Vision
• Connects individual goals to organizational objectives
5. Motivational Tool
• Recognition boosts morale and productivity
Conclusion
•Performance appraisal is a vital HR tool that aligns employee efforts with organizational goals.
•When executed well, it enhances productivity, morale, and career development.
•It provides a fair basis for compensation, promotions, and training decisions.
•A well-structured appraisal system fosters transparency, motivation, and a culture of continuous
improvement.
•Ultimately, it empowers both employees and management to grow together strategically.
References
1. https://www.slideshare.net/slideshow/performance-appraisal-57140068/57140068
2. https://slideplayer.com/slide/6070744/
3. https://www.educba.com/benefits-of-performance-appraisal/
Thank You !
