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Session 4. Performance appraisal

Session guide: Performance appraisal
Reading note: Performance appraisal




Plenary participatory lecture



At the end of this session, participants should be able to understand and appreciate:

1. The concept of performance appraisal.
2. The objectives, uses and characteristics of an appraisal system.
3. Important considerations in designing an appraisal system.
4. The appraisal process, approaches and techniques.
5. Attributes considered when evaluating performance.
6. Designing appraisal formats.
7. Performance evaluation of researchers.


Exhibit 1

What should a performance appraisal system be?

Exhibit 2

The performance appraisal process.

Exhibit 3

Standards and indicators of performance appraisal.

Exhibit 4

How the performance appraisal system can help?

Exhibit 5

Approaches in performance appraisal.

Exhibit 6

Techniques of performance appraisal.

Exhibit 7

During performance appraisal distinguish between...

Exhibit 8

Components of the appraisal format.

Exhibit 9

Attributes considered in evaluating performance.

Exhibit 10

Performance appraisal systems.

Exhibit 11

Appraisal interview.

Exhibit 12

Measuring the performance of researchers.


Reading note: Performance appraisal




Overhead projector and chalkboard.

Session guide: Performance appraisal

Start the session by asking participants for their understanding of performance appraisal in their organizations. Is it a traditional approach, characterized by

(i) mere evaluation, excluding the planning and development function,

(ii) being linked with financial rewards and sanctions, and

(iii) being impersonal, bureaucratic, top down, secretive and centralized, which excludes participation of the employee being assessed?

If the approach is traditional evaluation, then it can hardly be motivating to an employee. Instead, it must focus more on filling a form giving quantitative rather than qualitative information. What influence would such a system have on an employee's future performance? Observe that a performance appraisal system is a management tool which can help motivate and effectively utilize human resources. It includes performance planning, appraisal and counselling.

Show EXHIBIT 1 and discuss desirable features of a performance appraisal system. Emphasize the linkage between (i) past performance and future planning, and (ii) individual and organizational goals.

Using EXHIBIT 2, discuss the process of appraisal and the various stages involved. To begin with, realistic standards and measures have to be established to differentiate between different levels of performance. Then employees have to be informed as to what is expected of them and how their performance will be measured against the set standards and targets. Next comes planning for realization of performance expectation through use of resources and monitoring. Monitoring is to help remove difficulties rather than to interfere. Performance is documented in various ways during the appraisal stage and thereafter feedback is given. Emphasize that feedback should involve planning for the future as well. On the basis of appraisal and feedback, evaluation decisions have to be made, which include rewards or punishments. The final stage is development of performance.

The performance appraisal system has to be based on clearly specified and measurable standards and indicators. Show EXHIBIT 3 and discuss important standards and indicators. Goals have to be consistent and mutually decided by the employee and management. If necessary, the appraisal system could be directed towards a particular client. The appraisal system has to be reliable and consistent, and should include both objective and subjective ratings. The appraisal format should be practical and simple. The process should be participatory and open. It should be linked with rewards. Feedback is an important part of appraisal, and has to be timely, impersonal and noticeable. Observe that an appraisal system can be effective only if it is accepted by employees and if management is fully committed.

Performance appraisal has different objectives for management and for the employees. Employees are interested in having an assessment of their work from the viewpoint of personal development, work satisfaction and involvement in the organization. Management assesses the performance of employees to maintain organizational control and disburse rewards and punishments to further organizational goals. Thus, a spirit of mutuality is essential in an effective performance appraisal system. Show EXHIBIT 4 and discuss how a performance system can be useful. For employees, it can impart a better understanding of their job, skills and limitations, and provides an opportunity for self-reflection. It can help identify development needs. It can increase mutuality and strengthen communication between employees and management.

Show EXHIBIT 5 and discuss different approaches to performance appraisal. The intuitive approach uses perceptions. The self-appraisal approach relies on self-evaluation. The group approach uses evaluation by a group of persons. The trait approach uses the conventional method of evaluation against certain traits. Last is achievement-based appraisal, which compares achievements against goals set mutually during the planning process.

There are several techniques for performance appraisal. Show EXHIBIT 6 and discuss each of these techniques. In the essay appraisal method, evaluation is based on an essay type report from a rater who is familiar with the work of the employee being appraised. The graphic rating scale uses either quality of work or personal traits. In the field review method, effort is made to synchronize different ratings. The rater chooses the best-fit and worst-fit statements from a group of statements in the force choice rating method. The critical incident appraisal method uses critical incidents in evaluating performance. Management by objectives involves evaluation against mutually set, realistic goals. In the work standard approach, appraisal is for achievements against targets based on mutually agreed output standards.

The ranking method involves several techniques. In the alteration ranking method, individuals are ranked in a descending order of performance. Paired comparison involves comparison of every individual in the group with other individuals. In the man-to-man rating system, standards are set against actual individuals and then other individuals are matched with them. The checklist method involves a pre-scaled checklist of behaviour. Behaviourally anchored rating scales use a set of behaviourial statements relating to qualities important for performance. The assessment centre is a technique used to predict future performance of the employee and involves performing higher-level duties.

Performance appraisal should help in clearly distinguishing between more specific crucial issues and broad concerns often expressed as perceptions (EXHIBIT 7).

Show EXHIBIT 8 and discuss various components of an appraisal format. Inform participants that later on they will be required to design an appraisal format. In designing this format, one must seek information on the attributes to be considered in evaluating performance. These may include personal qualities as well as demonstrated performance.

Show EXHIBIT 9 and discuss various personal qualities and demonstrated performance attributes which should be considered in designing an appraisal format. Note that there are problems relating to assessment, identification of appraisal criteria, and policy for performance evaluation.

Show EXHIBIT 10 and discuss various problems in a performance appraisal system. These problems may relate to measurement, judgement, policy or organization.

Show EXHIBIT 11 and discuss the importance of the performance appraisal interview, during which focus is on future planning while giving feedback on past performance. A performance appraisal interview should be properly planned and conducted skilfully. It should be used to efficiently communicate feedback on performance during the previous year.

Conclude the session by asking the participants for their criteria for evaluating scientists. Write their responses on the chalkboard and compare them with EXHIBIT 12.



· Correlated with the organization's philosophies and mission

· Cover assessment of performance as well as potential for development

· Look after the needs of both the individual and the organization

· Help create a clean environment

· Rewards linked to achievements

· Generate information for personnel development and career planning

· Suggesting appropriate person-task matching

Performance appraisal should evaluate, audit, motivate, identify training needs, develop the individual and plan for future performance



Source: Craig, E., Schneiier, R., Beatty, W., and Baird, L. S. 1986. Training and Development Journal. May



· Mutual goal
· Reliable and consistent
· Accurate and equitable
· Practical and simple format
· Regular and routine
· Participatory and open
· Rewards
· Timely feedback
· Impersonal feedback
· Noticeable feedback
· Relevance and responsiveness
· Commitment



· Promote better understanding of an employee's role and clarity about his or her functions

· give a better understanding of personal strengths and weaknesses in relation to expected roles and functions

· Identify development needs of an employee

· Establish common ground between the employee and the supervisor

· Increase communication

· Provide an employee with the opportunity for self-reflection and individual goal setting

· Help an employee internalize the culture, norms and values of the organization. This helps develop an identity with and commitment to the organization and prepares an employee for higher-level positions in the hierarchy

· Assist in a variety of personnel decisions



· Intuitive

· Self-appraisal

· Group

· Trait

· Achievement of results



· Easy appraisal method

· Graphic rating scales

· Field review method

· Forced choice rating method

· Critical incident appraisal method

· Management by objectives

· Work standard approach

· Ranking methods

- Alteration methods
- Alteration ranking
- Paired comparison
- Person-to-person rating
- Checklist
- Behaviourally anchored rating scales
- Assessment centres



Accomplishments and Activity

Working efficiently and Working effectively

Work and Important work

Working hard and Working smart

Source: Nickel, L. J. 1989. Research Management for Development: An Open Letter to a New Agricultural Research Director. San Jose, Costa Rica: ICCA.



· Identification of key performance areas

· Identification of qualities for job performance

· Self-appraisal

· Analysis

· Discussion

· Identification of training needs

· Action plan and goal settings for the future

· Final assessment



Personal qualities

Demonstrated performance

Appearance and bearing
Drive and determination
Verbal expression
Written expression

Professional knowledge
Administrative ability
Responsibility for staff development








Deciding what to evaluate

Appraising performance

Using the results of the appraisal

Recognizing how managers work and the organization culture


· Ambiguity in roles and responsibilities of each job

· Job performance is difficult to quantify

· No clear statement of overall objectives of units or the organization

· Appraisal contains only numerical indices

· Disagreement on ratings

· Official review changes ratings

· Appeals, grievances, accusations of bias, discrimination

· Top management fails to reward managers who are excellent in staff assessment and development

· Marginal performers receive promotions or salary increases

· Appraisal forms not completed

· Managers com plain about time needed

· System seen as belonging to the designers, not the users

· Personnel/HR specialists take enforcer not adviser role

· system revised frequently


· Job analysis and credible job description

· Outcomes of each job identified

· Overall goals set for units and the organization

· Train managers to make documented judgements

· Observable, behaviourally based criteria

· Performance documented over time

· rater training and practice

· Effective communication of performance expectations

· Top management actually uses performance appraisal itself

· Polices for performance appraisal consistently applied

· performance-contingent reward system operates

· Implement performance appraisal using the Performance Management (PM) model

Source: Craig, E. S., Beatty, R. E., and Baird, L. S. 1986. How to contract a successful performance appraisal system. Training and Development Journal, April: 38-42



· Planning an interview

- tell and sell
- tell and listen
- problem solving

· Conducting an interview as planned

· Applying good questioning techniques

· Listen intelligently and without prejudice while someone less senior does most of the talking

· Communicating effectively verbally and non-verbally

Source: J. Davies, AFP, FAO, Rome.



· Overall performance
· Quality of output
· Productivity
· Quantity of written work
· Originality of written work
· Recent reports
· Membership in professional societies
· Recognition for organizational contribution
· Status-seeking tendencies
· Current organizational status
· Creativity rating from high-level supervisors
· Overall quality rating by immediate supervisors

Reading note: Performance appraisal

Performance appraisal system: The concept
Objectives of performance appraisal
Uses of an appraisal system
Characteristics of an appraisal system
Performance appraisal system: The process
Approaches and techniques in performance appraisal
Appraisal techniques
Components of the appraisal format
Attributes considered in evaluating performance
Management problems in evaluating performance

Effective human resources management (HRM) is essential for optimally utilizing creativity and attaining individual as well as organizational goals. Leadership has to ensure proper integration of various activities and harmonious functioning directed towards organizational goals. High motivation is essential for ensuring commitment of human resources to the given objectives. The key to motivation lies in integrating organizational and individual goals. Therefore, a manager has to concentrate on basic HRM tasks such as planning, development, compensation and evaluation. Evaluation includes performance planning, appraisal and counselling. These are critical in effective HRM.

Performance appraisal system: The concept

Performance appraisal is a management tool which is helpful in motivating and effectively utilizing human resources. Assessment of human potential is difficult, no matter how well designed and appropriate the performance planning and appraisal system is.

The performance appraisal system should:

· be correlated with the organizational mission, philosophies and value system;
· cover assessment of performance as well as potential for development;
· take care of organizational as well as individual needs; and
· help in creating a clean environment by

- linking rewards with achievements,
- generating information for the growth of the employee as well as of the organization, and
- suggesting appropriate person-task matching and career plans.

Feedback is an important component of performance appraisal. While positive feedback is easily accepted, negative feedback often meets with resistance unless it is objective, based on a credible source and given in a skilful manner.

Objectives of performance appraisal

Employees would like to know from a performance appraisal system:

· concrete and tangible particulars about their work; and
· assessment of their performance.

This would include how they:

· did;
· could do better in future;
· could obtain a larger share of rewards; and
· could achieve their life goals through their position.

Therefore an employee would desire that the appraisal system should aim at:

· their personal development;
· their work satisfaction; and
· their involvement in the organization.

From the point of view of the organization, performance appraisal serves the purpose of:

· providing information about human resources and their development;
· measuring the efficiency with which human resources are being used and improved;
· providing compensation packages to employees; and
· maintaining organizational control.

Performance appraisal should also aim at the mutual goals of the employees and the organization. This is essential because employees can develop only when the organization's interests are fulfilled. The organization's main resources are its employees, and their interest cannot be neglected. Mutual goals simultaneously provide for growth and development of the organization as well as of the human resources. They increase harmony and enhance effectiveness of human resources in the organization.

Uses of an appraisal system

A properly designed performance appraisal system can (Rao, 1985):

· help each employee understand more about their role and become clear about their functions;

· be instrumental in helping employees to better understand their strengths and weaknesses with respect to their role and functions in the organization;

· help in identifying the developmental needs of employees, given their role and function;

· increase mutuality between employees and their supervisors so that every employee feels happy to work with their supervisor and thereby contributes their maximum to the organization;

· act as a mechanism for increasing communication between employees and their supervisors. In this way, each employee gets to know the expectations of their superior, and each superior also gets to know the difficulties of their subordinates and can try to solve them. Together, they can thus better accomplish their tasks;

· provide an opportunity to each employee for self-reflection and individual goal-setting, so that individually planned and monitored development takes place;

· help employees internalize the culture, norms and values of the organization, thus developing an identity and commitment throughout the organization;

· help prepare employees for higher responsibilities in the future by continuously reinforcing the development of the behaviour and qualities required for higher-level positions in the organization;

· be instrumental in creating a positive and healthy climate in the organization that drives employees to give their best while enjoying doing so; and

· assist in a variety of personnel decisions by periodically generating data regarding each employee.

Characteristics of an appraisal system

Performance appraisal cannot be implemented successfully unless it is accepted by all concerned. There should be a common and clear understanding of the distinction between evaluation and appraisal. As Patten (1982) argues, evaluation aims at 'objective' measurement, while appraisal includes both objective and subjective assessment of how well an employee has performed during the period under review. Thus performance appraisal aims at 'feedback, development and assessment.' The process of performance appraisal should concentrate on the job of an employee, the environment of the organization, and the employee him- or herself. These three factors are inter-related and inter-dependent. Therefore, in order to be effective, the appraisal system should be individualized, subjective, qualitative and oriented towards problem-solving. It should be based on clearly specified and measurable standards and indicators of performance. Since what is being appraised is performance and not personality, personality traits which are not relevant to job performance should be excluded from the appraisal framework.

Some of the important considerations in designing a performance appraisal system are:

· Goal The job description and the performance goals should be structured, mutually decided and accepted by both management and employees.

· Reliable and consistent Appraisal should include both objective and subjective ratings to produce reliable and consistent measurement of performance.

· Practical and simple format The appraisal format should be practical, simple and aim at fulfilling its basic functions. Long and complicated formats are time consuming, difficult to understand, and do not elicit much useful information.

· Regular and routine While an appraisal system is expected to be formal in a structured manner, informal contacts and interactions can also be used for providing feedback to employees.

· Participatory and open An effective appraisal system should necessarily involve the employee's participation, usually through an appraisal interview with the supervisor, for feedback and future planning. During this interview, past performance should be discussed frankly and future goals established. A strategy for accomplishing these goals as well as for improving future performance should be evolved jointly by the supervisor and the employee being appraised. Such participation imparts a feeling of involvement and creates a sense of belonging.

· Rewards Rewards - both positive and negative - should be part of the performance appraisal system. Otherwise, the process lacks impact.

· Feedback should be timely Unless feedback is timely, it loses its utility and may have only limited influence on performance.

· Impersonal feedback Feedback must be impersonal if it is to have the desired effect. Personal feedback is usually rejected with contempt, and eventually de-motivates the employee.

· Feedback must be noticeable The staff member being appraised must be made aware of the information used in the appraisal process. An open appraisal process creates credibility.

· Relevance and responsiveness Planning and appraisal of performance and consequent rewards or punishments should be oriented towards the objectives of the programme in which the employee has been assigned a role. For example, if the objectives of a programme are directed towards a particular client group, then the appraisal system has to be designed with that orientation.

· Commitment Responsibility for the appraisal system should be located at a senior level in the organization so as to ensure commitment and involvement throughout the management hierarchy.

Performance appraisal system: The process

Performance appraisal involves an evaluation of actual against desired performance. It also helps in reviewing various factors which influence performance. Managers should plan performance development strategies in a structured manner for each employee. In doing so, they should keep the goals of the organization in mind and aim at optimal utilization of all available resources, including financial. Performance appraisal is a multistage process in which communication plays an important role.

Craig, Beatty and Baird (1986) suggested an eight-stage performance appraisal process:

(i) Establishing standards and measures

The first step is to identify and establish measures which would differentiate between successful and unsuccessful performances. These measures should be under the control of the employees being appraised. The methods for assessing performance should be decided next. Basically, management wants to:

· know the behaviour and personal characteristics of each employee; and
· assess their performance and achievement in the job.

There are various methods available for assessing results, behaviour and personal characteristics of an employee. These methods can be used according to the particular circumstances and requirements.

(ii) Communicating job expectations

The second step in the appraisal process is communicating to employees the measures and standards which will be used in the appraisal process. Such communication should clarify expectations and create a feeling of involvement.

(iii) Planning

In this stage, the manager plans for the realization of performance expectations, arranging for the resources to be available which are required for attaining the goals set. This is an enabling role.

(iv) Monitoring performance

Performance appraisal is a continuous process, involving ongoing feedback. Even though performance is appraised annually, it has to be managed 'each day, all year long.' Monitoring is a key part of the performance appraisal process. It should involve providing assistance as necessary and removing obstacles rather than interfering. The best way to effectively monitor is to walk around, thus creating continuous contacts, providing first-hand information, and identifying problems, which can then be solved promptly.

(v) Appraising

This stage involves documenting performance through observing, recalling, evaluating, written communication, judgment and analysis of data. This is like putting together an appraisal record.

(vi) Feedback

After the formal appraisal stage, a feedback session is desirable. This session should involve verbal communication, listening, problem solving, negotiating, compromising, conflict resolution and reaching consensus.

(vii) Decision making

On the basis of appraisal and feedback results, various decisions can be made about giving rewards (e.g., promotion, incentives, etc.) and punishments (e.g., demotion). The outcome of an appraisal system should also be used for career development.

(viii) Development of performance

The last stage of performance appraisal is 'development of performance,' or professional development, by providing opportunities for upgrading skills and professional interactions. This can be done by supporting participation in professional conferences or by providing opportunities for further study. Such opportunities can also act as incentives or rewards to employees.


It is obvious that communication is at the core of an appraisal system. Communication can be either upward or downward. Downward communication is from upper management levels to lower levels, and passes on a judgement of how the employees are doing and how they might do even better. As the information flows downward, it becomes more individualized and detailed. Upward communication is from lower to higher levels. Through this process, employees communicate their needs, aspirations and goals. As information flows upward, it has to become brief and precise because of the channels through which it has to pass.

Approaches and techniques in performance appraisal

Performance appraisal is a multistage process involving several activities, which can be administered using a variety of approaches. Some of these approaches are considered below, based on Einstein and LeMere-Labonte, 1989; and Monga, 1983:

· Intuitive approach In this approach, a supervisor or manager judges the employee based on their perception of the employee's behaviour.

· Self-appraisal approach Employees evaluate their own performance using a common format.

· Group approach The employee is evaluated by a group of persons.

· Trait approach This is the conventional approach. The manager or supervisor evaluates the employee on the basis of observable dimensions of personality, such as integrity, honesty, dependability, punctuality, etc.

· Appraisal based on achieved results In this type of approach, appraisal is based on concrete, measurable, work achievements judged against fixed targets or goals set mutually by the subject and the assessor.

· Behaviourial method This method focuses on observed behaviour and observable critical incidents.

Appraisal techniques

There are several techniques of performance appraisal, each with some strong points as well as limitations. Oberg (1972) has summarized some of the commonly used performance appraisal techniques.

(i) Essay appraisal method

The assessor writes a brief essay providing an assessment of the strengths, weaknesses and potential of the subject. In order to do so objectively, it is necessary that the assessor knows the subject well and should have interacted with them. Since the length and contents of the essay vary between assessors, essay ratings are difficult to compare.

(ii) Graphic rating scale

A graphic scale 'assesses a person on the quality of his or her work (average; above average; outstanding; or unsatisfactory).' Assessment could also be trait centred and cover observable traits, such as reliability, adaptability, communication skills, etc. Although graphic scales seem simplistic in construction, they have application in a wide variety of job responsibilities and are more consistent and reliable in comparison with essay appraisal. The utility of this technique can be enhanced by using it in conjunction with the essay appraisal technique.

(iii) Field review method

Since individual assessors differ in their standards, they inadvertently introduce bias in their ratings. To overcome this assessor-related bias, essay and graphic rating techniques can be combined in a systematic review process. In the field review method, 'a member of the HRM staff meets a small group of assessors from the supervisory units to discuss each rating, systematically identifying areas of inter-assessor disagreement.' It can then be a mechanism to help each assessor to perceive the standards uniformly and thus match the other assessors. Although field review assessment is considered valid and reliable, it is very time consuming.

(iv) Forced-choice rating method

Unlike the field review method, the forced-choice rating method does not involve discussion with supervisors. Although this technique has several variations, the most common method is to force the assessor to choose the best and worst fit statements from a group of statements. These statements are weighted or scored in advance to assess the employee. The scores or weights assigned to the individual statements are not revealed to the assessor so that she or he cannot favour any individual. In this way, the assessor bias is largely eliminated and comparable standards of performance evolved for an objective. However, this technique is of little value wherever performance appraisal interviews are conducted.

(v) Critical incident appraisal method

In this method, a supervisor describes critical incidents, giving details of both positive and negative behaviour of the employee. These are then discussed with the employee. The discussion focuses on actual behaviour rather than on traits. While this technique is well suited for performance review interviews, it has the drawback that the supervisor has to note down the critical incidents as and when they occur. That may be impractical, and may delay feedback to employees. It makes little sense to wait six months or a year to discuss a misdeed, a mistake or good display of initiative.

(vi) Management by objectives

The employees are asked to set or help set their own performance goals. This avoids the feeling among employees that they are being judged by unfairly high standards. This method is currently widely used, but not always in its true spirit. Even though the employees are consulted, in many cases management ends up by imposing its standards and objectives. In some cases employees may not like 'self-direction or authority.' To avoid such problems, the work standard approach is used.

(vii) Work standard approach

In this technique, management establishes the goals openly and sets targets against realistic output standards. These standards are incorporated into the organizational performance appraisal system. Thus each employee has a clear understanding of their duties and knows well what is expected of them. Performance appraisal and interview comments are related to these duties. This makes the appraisal process objective and more accurate. However, it is difficult to compare individual ratings because standards for work may differ from job to job and from employee to employee. This limitation can be overcome by some form of ranking using pooled judgment.

(viii) Ranking methods

Some of the important forms of ranking for performance appraisal are given below, based on Oberg, 1972; and Monga, 1983:

(a) Alteration ranking method The individual with the best performance is chosen as the ideal employee. Other employees are then ranked against this employee in descending order of comparative performance on a scale of best to worst performance. The alteration ranking method usually involves rating by more than one assessor. The ranks assigned by each assessor are then averaged and a relative ranking of each member in the group is determined. While this is a simple method, it is impractical for large groups. In addition, there may be wide variations in ability between ranks for different positions.

(b) Paired comparison The paired comparison method systematizes ranking and enables better comparison among individuals to be rated. Every individual in the group is compared with all others in the group. The evaluations received by each person in the group are counted and turned into percentage scores. The scores provide a fair idea as to how each individual in the group is judged by the assessor.

(c) Person-to-person rating In the person-to-person rating scales, the names of the actual individuals known to all the assessors are used as a series of standards. These standards may be defined as lowest, low, middle, high and highest performers. Individual employees in the group are then compared with the individuals used as the standards, and rated for a standard where they match the best. The advantage of this rating scale is that the standards are concrete and are in terms of real individuals. The disadvantage is that the standards set by different assessors may not be consistent. Each assessor constructs their own person-to-person scale which makes comparison of different ratings difficult.

(d) Checklist method The assessor is furnished with a checklist of pre-scaled descriptions of behaviour, which are then used to evaluate the personnel being rated (Monga, 1983). The scale values of the behaviour items are unknown to the assessor, who has to check as many items as she or he believes describe the worker being assessed. A final rating is obtained by averaging the scale values of the items that have been marked.

(e) Behaviourally anchored rating scales (BARS) This is a relatively new technique. It consists of sets of behaviourial statements describing good or bad performance with respect to important qualities. These qualities may refer to inter-personal relationships, planning and organizing abilities, adaptability and reliability. These statements are developed from critical incidents collected both from the assessor and the subject.

(f) Assessment centres This technique is used to predict future performance of employees were they to be promoted. The individual whose potential is to be assessed has to work on individual as well as group assignments similar to those they would be required to handle were they promoted. The judgment of observers is pooled, and paired comparison or alteration ranking is sometimes used to arrive at a final assessment. The final assessment helps in making an order-of-merit ranking for each employee. It also involves subjective judgment by observers.

A performance appraisal system could be designed based on intuition, self-analysis, personality traits, behaviourial methods and result-based techniques. Different approaches and techniques could be blended, depending on the goals of performance appraisal in the organization and the type of review. For example, management by objectives, goal-setting and work standard methods are effective for objective coaching, counselling and motivational purposes. Critical incident appraisal is best suited when supervisor's personal assessment and criticism are essential. A carefully developed and validated forced-choice rating can provide valuable analysis of the individual when considering possible promotion to supervisory positions. Combined graphic and essay form is simple, effective in identifying training and development needs, and facilitates other management decisions.

Components of the appraisal format

Key performance areas, self-appraisal, performance analysis, performance ratings and counselling are the important components of a performance appraisal system oriented to development of human resources in an organization. The appraisal format should be designed in consonance with the objectives of the performance appraisal system, and generate information on a number of important aspects, including (Rao, 1985):

· Identification of key performance areas The first step in an appraisal process is identifying key performance areas and setting targets for the next appraisal period. This may be done either through periodic discussions or at the beginning of the year, as in research institutions.

· Self-appraisal by the subject At the end of the appraisal period, employees appraise their own performance against the key performance areas, targets and pre-identified behaviour. Information on these issues is provided in an appraisal format. The employees also write their self-evaluation reports and hand them to their supervisors.

· Analysis The supervisor reflects on the performance of the employee, and identifies the factors which facilitated or hindered the employee's performance. The manager then calls the employee for a discussion to better understand his or her performance and provide counselling on further improvements. During this discussion, appraisal records (such as notes, observations, comments, etc.) are exchanged. The manager then gives a final rating and recommendations regarding the developmental needs of the individual. These are shown to the subject and his or her comments are recorded on the appraisal form. The appraisal form is then transmitted to the personnel department for the necessary administrative action. The personnel or human resource development department uses these forms for identifying and allocating training, rewards and other activities.

· Identification of training needs The use of a development-oriented performance appraisal system is based on a good understanding of the concept of human resources development. The need for developing employee capabilities, the nature of capabilities to be developed, and the conditions under which these capabilities can be developed have to be appreciated. During the discussion between the supervisor and the employee, the development needs of the subject are identified and goals set for the next period.

· Identification of qualities The supervisor may also identify the qualities required for current as well as future tasks, and assess the employee's potential and capabilities to perform jobs at higher responsibility levels in the organization.

Attributes considered in evaluating performance

There are many personality traits which could be considered when evaluating performance, and methods to facilitate such consideration include scaling methods that differentiate employees on a series of given traits. The important personality traits fall into two categories: personal qualities and demonstrated qualities (Table 1).

Table 1 Personal and demonstrated personality traits

Personal Qualities

Demonstrated Performance Qualities

Adaptability: Adjustment with new or changing situations or people.

Appearance and bearing: Having good bearing and appearance.

Decisiveness: Ability to arrive at conclusions promptly and to decide on a definite course of action.

Dependability: Ability to consistently accomplish allocated jobs without supervision.

Drive and determination: Ability to execute job vigorously and resolutely, and induce others to do so.

Ingenuity: Resourcefulness and ability to creatively devise means to solve unforeseen problems.

Initiative: Ability to take necessary and appropriate action independently.

Integrity: Ability to maintain an honest approach in all dealings.

Loyalty: Ability to faithfully, willingly and loyally support superiors, equals and subordinates.

Maturity: Understanding and balance commensurate with age and service.

Stamina: Ability to withstand and perform successfully under protracted physical strain.

Tenacity: Ability to preserve in face of odds and difficulties.

Verbal expression: Ability to express oneself clearly and concisely.

Written expression; Ability to express oneself clearly and concisely in writing.

Professional knowledge: Ability to apply professional knowledge to assigned duties so as to achieve a high standard of performance.

Administrative ability: Having administrative ability to use resources economically and judiciously.

Responsibility for staff development: Ability to fulfil responsibilities in the development and training of staff.

Foresight: Ability to display foresight and plan beyond immediate needs.

Delegation: Ability to delegate responsibilities and exercise required degree of guidance and supervision.

Motivation: Ability to motivate subordinates effectively to produce desired results.

Morale: Ability to maintain morale and look after the management of staff.

Control: Ability to exercise control over subordinates and gain their confidence.

Source: Adapted from an appraisal form of an organization illustrated in Monga, 1983.

Management problems in evaluating performance

Identification of appraisal criteria
Assessment problems
Policy problems

Some of the important problems faced by managers in evaluating performance are identification of appraisal criteria, problems in assessment, and policy-related problems.

Identification of appraisal criteria

It is usually quite difficult to decide the criteria for evaluating performance, particularly the performance of those engaged in research activities. Initiative, appearance, tact or organizational skills of researchers are very difficult to assess. While deciding the performance criteria, it is important to simultaneously decide how well people should perform. The aim of the appraisal system is to make informed, accurate and fact-based judgments, although some of these judgments may not be quantifiable.

Conventionally, the number of contributions accepted for publication in refereed professional journals has been a useful measure for evaluating the performance of scientists. This is perhaps an appropriate measure for those who are engaged in basic research. However, publication numbers do not adequately measure performance of those engaged in adaptive and applied research, which are aimed at meeting practical and critical needs of users. The performance of such researchers has to be measured differently, taking due consideration of their success with the user system. On the whole, qualitative assessment may be more appropriate for researchers because of difficulties in quantitative assessment, as research is relatively non-repetitive, requires creativity, usually takes a longish time, has unpredictable outcomes, and could result in multi-dimensional outputs. Therefore, outputs of research and researchers should not be measured by one criterion. Instead, performance of a researcher has to be measured in toto, as an integral part of the research programme.

Assessment problems

It is difficult to observe behaviour and interpret it in terms of its causes, effects and desirability. Rating behaviour on an appraisal form is quite difficult. The human element plays a significant role in the appraisal process and introduces subjectivity and bias. This can be minimized by:

· documenting performance from time to time;
· basing criteria for evaluation on observable behaviour;
· training the supervisors; and
· effectively communicating the expectations which management has of staff.

Policy problems

The results of the appraisal system should be followed up through a set of well designed and enforced policies, and translated into rewards and punishments. Performance of researchers is sometimes difficult to assess. A research manager has to balance between researchers' creativity and organizational goals. Researchers do not like others passing judgment on qualitative or quantitative aspects of their work, yet the need for an effective performance planning and appraisal system in a research organization is well accepted.


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Oberg, W. 1972. Make performance appraisal relevant. Harvard Business Review, January-February 1972: 61-67.

Patten, T. H., Jr. 1982. A Manager's Guide to Performance Appraisal. London: Free Press.

Rao, T. V. 1985. Performance Appraisal Theory and Practice. New Delhi: Vikas Publishing House.

Craig, S. E., Beatty, R. W., & Baird, L. S. 1986. Creating a performance management system. Training and Development Journal, April: 38-42; May: 74-79.

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