55

MODULE IV
PERFORMANCE
APPRAISAL
AND CAREER PLANNING

Mob : 9746564756 [Link]

 56

PERFORMANCE APPRAISAL (OR MERIT RATING)

Performance appraisal is a process of assessing, summarizing and
developing the work performance of an employee.
It is the process of evaluating personnel job performance and his
potential for development.
Definition
“Performance appraisal is a systematic and periodic rating of employee’s
excellence in matters pertaining to his present job and his potential for
a better job”
- [Link] –
Importance of Performance Appraisal
 It can be used to improve performance of employees through
proper feedback, working and counselling employees.
 It helps the employees to get promotion or increase in salary
 It helps the management to identify the need for giving training
and development of employees.
 It helps to judge the effectiveness of recruitment, selection,
placement, orientation etc.
 It helps to develop confidence among employees
 Performance appraisal tries to identify the strength and weakness
of employees on the present job.
 It helps supervisors to evaluate the performance of their
subordinates systematically
 It helps the employees to identify in what are they need to acquire
more knowledge, skill and experience.
Objectives of Performance Appraisal
 To ascertain the performance of employees against established
standard.
 To identify strength or weakness of employees
 To identify the need for training and the type of training to be given

Mob : 9746564756 [Link]

 57

 To evaluate the success of training Programmes

 To motivate the employee to perform well
 To facilitate communication within the organisation
 To reward the employees with better remuneration and incentives
 To establish relationship between employer and employees
 To provide coaching, counselling and career planning to employees
 To prevent grievances and in disciplinary activities of the personal.
Process of Performance Appraisal
1. Determining objectives
It may be evaluate the actual performance of the individual on the
job.
2. Establishing performance standard or criteria
Performance appraisal is to be done on the basis of standard setup
for appraising the performance of employees. Job performance
standards are to be fixed which is related with the work
requirements that are expected from an employee on a particular
job.
3. Communicating the standards
After determining the criteria or standard of performance, it must
be communicated to employees.
4. Measuring performance
The actual performance of employees must be measured. Standard
and well accepted performance measurement techniques should
be used for measuring the performance.
5. Comparing the actual performance with standard
After measuring the actual performance it should be compared
with performance standard.

Mob : 9746564756 [Link]

 58

6. Discussion
After that, it is necessary to communicate the results of the
appraisal to the employees. Not only the deviations but also the
reasons for deviation are analysed and discussed with the
employees.
7. Corrective Action
By way of conducting discussion with the employees, the steps
needed for improving performance can be identified and on that
basis corrective action can be taken.
Methods of Performance Appraisal
I. Traditional Methods
1. Ranking Method
2. Paired Comparison method
3. Grading method
4. Graphic scale method
5. Check list
6. Forced distribution method
7. Critical incident method
8. Failed review method
9. Confidential report
10. Essay appraisal method
11. Group appraisal
II. Modern Methods
1. Assessment Centre
2. Human Resource Accounting
3. Behaviourally Anchored Rating Scales (BARS)
4. MBO
5. Psychological Appraisal
6. Productive Measures

Mob : 9746564756 [Link]

 59

Traditional Methods
1. Ranking Method
Employees are ranked from best to worst on the basis of some
characteristics.
2. Paired Comparison
Each person is compared with other persons in pairs at one time.
Only one trait is considered each time of comparison.
3. Grading Method
Certain categories of abilities are defined in advance like excellent,
very good, average, poor, very poor etc. The actual performance is
compared with these categories of abilities and the person is
allocated a grade in terms of A, B, C, D, E.
4. Graphic Rating Scale
Here linear rating scale is used. A printed appraisal form is used
for each employee. Printed form contains list of list of performance
criteria and personality traits. Points are assigned each criteria.
Rating scales with numerical values can be used for evaluation of
performance. Two Types;
a) Discrete Rating scales – appropriate boxes are used to
measure traits. Eg; Communication:
Poor Average Good Very good Excellent
b) Continues Rating scales – traits are measured in numbers
ranging from 0 to 5
Eg; Very poor Poor Average Good Excellent
0 1 2 3 4 5
Quantity of work

Intelligence

Job Knowledge

Attitude

Mob : 9746564756 [Link]

 60

5. Checklist
It is a statement of traits and performance of employees on the job.
It is prepared in two column namely ‘Yes’ and ‘No’ (ie Positive or
negative)
Eg;
Is the employee really interested in the job Yes No
Is the employee regular on the job Yes No
6. Forced distribution method
This method assumes that the performance of employees follows a
normal distribution.

10% 20% 40% 20% 10%

The performance of majority of employees will be around the

average or medium level.
7. Critical incident method
Under this method the supervisor continuously record the critical
incidents of the employees performance or behaviour relating to all
characteristics (both + ve & - ve) in specially designed record.
8. Filed Review Method
An officer of human resource department reviews employees
rewards and holds interview with the ratee and his supervisor.
9. Confidential Report
It is mainly used in govt. organisation. The supervisor prepares an
annual confidential report of the employee based on certain
criterial like attendance, leaves taken, technical ability,
confidence, leadership quality, achievement, failure etc.

Mob : 9746564756 [Link]

 61

10. Essay appraisal method

Under this method, the supervisor or rater makes a detailed
description of employee performance in his own words. These
includes his ability to use skills, strength and weakness,
achievements etc.
11. Group Appraisal
The performance of the employee is evaluated by a group of
persons. The group consists of the supervisor, experts or head of
the department etc.
Modern Methods
1. Assessment Centre
An assessment centre is a central location where a group of
employees comes together and works on an assignment for two or
three days.
The evaluators evaluate all employees by using simulation like
role-playing, business games etc.
2. Human Resource Accounting method
Under this method, the performance is judged in terms of costs
and contribution of employees. Cost of human resource includes
expenditure incurred on human resource planning, recruitment,
selection, orientation and placement.
Employee contribution is the money value of employee service,
which can be measured by labour productivity.
3. Behaviorally Anchored Rating Scales (BARS)
This method is a combination of graphic rating scales and critical
incidents method. BARS are the scales which represent the range
of descriptive statements of behaviour varying from the least to the
most effective. It is the comparison of actual behaviour with
expected behaviour.
4. MBO

Mob : 9746564756 [Link]

 62

It is a system of improving performance, both individual managers

and enterprise as a whole, by setting objectives of the enterprise,
departments and managers level.
Steps
1. Establishing objectives
2. Establishing targets for each subordinates
3. Review of performance
4. Feedback
5. Psychological Appraisal
To assess the employee potential for the future performance rather
than the past one. It is done in the form of in depth interviews,
group discussion, psychological tests.
It focuses on assessing psychological aspects like intelligence,
attitude, motivation, leadership qualities etc.
6. Productivity Measures
An employee is appraised on the basis of ratio of input converted
into output.
Essential Requirements of an effective Performance Appraisal
1. Confidence and Mutual trust
A good atmosphere should exist in the organisation to create
confidence and mutual trust among employees.
2. Definite objectives
The objectives of performance appraisal must be definite and clear.
It should be relevant fair.
3. Well defined performance standard
Procedures and technique adopted in appraisal should be
standardised.
4. Training – proper training should be provided to appraisers
5. Job related behaviour

Mob : 9746564756 [Link]

 63

The job appraiser should focus on job related behaviour and

performance of employees.
6. Documentation
Proper documentation of appraisal should be done. The raters
should be able to justify this training.
7. Feedback and participation
The employees should get feedback concerned with their
performance appraisal.
8. Size of organisation
The size, number of employees, organisational setup etc. must be
considered while designing the appraisal system.
9. Post appraisal review
After appraisal, the rater should conduct an interview with
employees.
10. Review and appeal – A review committee should be formed to
review the situation.
Problems in Performance Appraisal
1. Faulty assumption
The faulty assumptions related with performance appraisal of
subordinates by superiors will lead to failure of appraisal system.
2. Psychological barriers
Psychological barriers like;
 Managers feeling of insecurity
 Appraisal is an extra burden
 Managers feel that the subordinate failure is due to their
inefficiency.
 Managers disliking of communicating poor performance to
subordinates
3. Technical difficulties

Mob : 9746564756 [Link]

 64

 Criterion problem – selection of criteria is difficult to choose

and it is difficult to measure.
 Halo effect – the rater is influenced by one or more
outstanding good or bad performance
 Central tendency – this occur when the rater mark all or
almost all his personal as average and fails to discriminate
between superior and inferior persons.
 Horn effect – the rater’s bias in the other direction, where one
negative quality of the employee is being rated harshly.
 Leniency – depending on rate’s own mental make up at the
time of appraisal, raters may be rated very strictly or very
leniently.
 Errors of variable standards – it is quite possible that
organisation follow different standards of performance
 Regency effect – In this case the rater gives grater weightage
to recent occurrence than earlier performance
4. Other difficulties
 Poorly trained managers – this problem can be eliminated if
the managers are adequately trained on using modern
techniques of evaluation
 Poor rating forms
 Lack of rater preparedness
 Ineffective organisational policies and practices

Mob : 9746564756 [Link]

 65

CAREER PLANNING
 Career planning refers to the planning done by a person in terms
of making a career choice, advancing in that career and making a
shift from the present career.
 It is a systematic process by which one selects career goals and the
path to these goals
 It is a lifelong process, requiring continuous effort to meet
changing employment conditions
Features of Career planning
 Continuous process
 It is a process of developing human resources
 It is essential aspects of managing people to optimum results
 It is progressive in nature
 It is an individual’s responsibility
 It is dynamic in nature as it changes with periods, environment
and one’s age in the lifetime.
Methods of career planning
1. Discussion with experts
Employees can consult with his supervisor or other knowledgeable
people in the organisation for making better career planning.
2. Career planning materials – Organisation provide their employees
with specific materials for career planning
3. Performance appraisal system
4. Workshops
5. Personal development plans
Benefits or Uses of career planning
 Career planning helps employees to know various career
opportunities available in an organisation

Mob : 9746564756 [Link]

 66

 The organisation can use the human resource most effectively and
attain greater productivity
 It helps the organisation to retain their best talented employees
 It helps individual growth and development
 It improves employee morale and motivation
 It builds employee loyalty and improves employee performance
 It helps to achieve job satisfaction
CAREER DEVELOPMENT
Career development is a formal, organised and planned effort by an
organisation to achieve a balance between individual career needs and
organisational workforce requirements
It involves the process of helping the employees to acquire new skills
and qualifications to meet their present and future job requirements.
Steps in Career Development
1. Self-assessment – gathering information about oneself
2. Career planning
3. Job search resources

Mob : 9746564756 [Link]