Report on Appraisal Form for the Employees and Faculties of United International University
Subject: Business, Human Resource Management | Topics:

Executive Summary

The role of HR in the present scenario has undergone a sea change and its focus is on evolving such functional strategies which enable successful implementation of the major corporate strategies. In a way, HR and corporate strategies function in alignment. Today, HR works towards facilitating and improving the performance of the employees by building a conducive work environment and providing maximum opportunities to the employees for participating in organizational planning and decision making process. Today, all the major activities of HR are driven towards development of high performance leaders and fostering employee motivation. So, it can be interpreted that the role of HR has evolved from merely an appraiser to a facilitator and an enabler.

Performance management systems, in various forms, have been employed for nearly two millennia. In the third century AD, the Chinese were not only using performance appraisal systems but were critiquing each other’s biases in their evaluations of their employees (Murphy and Cleveland, 4; Evans, 3). During the Industrial Revolution of the 18th century, factory managers became aware of the importance of their employees’ performance on their production outputs (Grote and Grote, 3; Murphy and Cleveland, 4). The development of the philosophy of performance evaluation systems in America has been attributed to such researchers and philosophers as Peter Drucker and Douglas McGregor, who developed ideas of management by objectives (MBOs) and employee motivation (Evans, 4; Murphy and Cleveland, 3). Spreigel reported in 1962 that by the early 1960s more than 60% of American organizations had a performance appraisal system. The system’s popularity stemmed from the Army’s implementation of a performance management system for its officers (Murphy and Cleveland, 3). Since then, researchers have continued to develop theories of how different performance evaluation methods can contribute to the success of the organization.


Origin of the Report

Our report is based on “Appraisal Form for the Employees and Faculties of United International University” concentrating on manpower planning in a garment manufacturing company for the requirement of our current studied course named “Introduction to Human Resource Management”. This report is arranged under the supervision of Dr. H. R. Joarder, Asst. Professor of BBA Program, UnitedInternationalUniversity. We have prepared our report based on data acquired from browsing the internet, studying books on Performance Appraisal, and through learning materials facilitated by our honorable course teacher.

Purpose of the Report

The main purpose of this report is to find the similarity between theoretical Performance Appraisal Form and the practical one. In the time of making this report, we found some contrast. But, we have tried to match the practical scenario with the theory what we have been taught in the current course named ‘Performance Appraisal Management”.


Objectives of the report

  • To prepare a performance appraisal form of UIU employees and faculties

  • To observe the similarities and contrast between theoretical performance appraisal process and the practical one.

 Methodology of the Report

a. Types of data:  We are using two types of data sources:

  • Primary data: We collected data from our teacher’s learning materials and through his direct direction.

  • Secondary data: We collected data from internet, organization’s website and some books about Performance Appraisal Form.

b. Method of data Analysis:

We used the gathered data about performance appraisal process to make an effective performance appraisal form for the employees and faculties of UIU.

Limitations of the Study

The limitations regarding the report have acted as the limitations of the study. Among others the main limitations are:

  • The time to prepare the report was too short.
  • Lack of practical experience about making an effective performance appraisal form.
  • Due to our mid term exam, quiz and unexpected holiday, enough group discussions could not held as it should be.


Definition of Performance Management (PM) and Performance Appraisal (PA):

Performance management is the current buzzword and is the need in the current times of cut throat competition and the organizational battle for leadership. Performance management is a much broader and a complicated function of HR, as it encompasses activities such as joint goal setting, continuous progress

Performance management is an ongoing, continuous process of communicating and clarifying job responsibilities, priorities and performance expectations in order to ensure mutual understanding between supervisor and employee. It is a philosophy which values and encourages employee development through a style of management which provides frequent feedback and fosters teamwork. It emphasizes communication and focuses on adding value to the organization by promoting improved job performance and encouraging skill development. Performance Management involves clarifying the job duties, defining performance standards, and documenting, evaluating and discussing performance with each employee.


measuring progress, giving feedback, coaching for improved performance, and rewarding achievements. According to Armstrong and Baron Performance management is a process which contributes to the effective management of individuals and teams in order to achieve high levels of organizational performance. As such, it establishes shared understanding about what is to be achieved and an approach to leading and developing people which will ensure that it is achieved.’ They stress that performance management is ‘a strategy which relates to every activity of the organization set in the context of its human resource policies, culture, style and communications systems. The nature of the strategy depends on the organizational context and can vary from organization to organization.

Performance appraisal may be understood as the Assessment of individual’s Performance in a Systematic way, the performance being measured against factors such as job knowledge, quality and quantity output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health and the like. Assessment should be confined to past performance alone. Potentials of the employee for future performance must also be assessed. 


Performance appraisal is defined by Wayne Cascio as the systematic description of employee’s job relevant, strength, weakness According to Flippo, a prominent personality in the field of Human resources, performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job.


Appraisals are a key part of the performance management cycle. Appraisals are an important part of performance management, but an appraisal in itself is not performance management. Performance management is a broader process of which an appraisal is only one stage. For example, in the performance management cycle, the review and planning elements typically form an appraisal. However, the development and performance stages are part of the broader performance management process. To manage performance requires more than just a performance appraisal.


Advantages of the performance Management:

Performance management gives managers a specific set of parameters to make decisions and act in an active rather than passive mode. This allows them to take the initiative by making quick and effective decisions that positively impact their unit’s efficiency, profitability and overall performance. Managers who utilize an effective performance management process and program will find that rather than complicate their lives, their jobs are made much easier. Decision-making is greatly simplified by performance management, as it provides a specific set of established parameters with which to make consistent and focused decisions that move the unit forward to the achievement of its goals.

1. Performance Based Conversations:

Managers get busy with day-to-day responsibilities and often neglect the necessary interactions with staff that provide the opportunity to coach and offer performance feedback.  A performance management process forces managers to discuss performance issues with employees.  It is this consistent coaching that affects changed behaviors and employee development.


2. Staff Development

A good performance management system can be a positive way to identify developmental opportunities and can be an important part of a succession planning process.  All employees are on a development journey and it is the organization’s responsibility to be preparing them for increased responsibility.

3. Encouragement to Staff:

Performance appraisals should be a celebration of all the wonderful things an employee does over the course of a year and should be an encouragement to staff. There should be no surprises if issues are addressed as they arise and not held until the annual review.

4. Rewards Staff for a Job Well Done:

If pay increases and/or bonuses are tied to the performance appraisal process, staff can see a direct correlation between performance and financial rewards. This motivates and encourages employees to perform at higher levels.

5. Under-Performers Identified:

As hard as we try, it is inevitable that some employees just won’t cut the mustard as they say.  An effective performance appraisal process can help identify and document underperformers, allowing for a smooth transition if the relationship needs to be terminated.

6. Documented History of Employee Performance

It is very important that all organizations keep a performance record on all employees.  This is a document that should be kept in the employee’s HR file.

7. Employee Growth:

Motivated employees value structure, development and a plan for growth.  An effective performance management system can help an employee reach their full potential and this is positive for both the employee and manager. A good manager takes pride in watching an employee grow and develop professionally.

8. Providing Focused Feedback:

Performance management allows managers to make decisions and focus their feedback on issues directly related to the achievement of the individual employee’s goals and objectives. Any other issues distracting the employee that don’t contribute to the unit or department’s performance can be quickly and effectively handled and eliminated.

9. Benchmarks for Performance:

One of the keystones of performance management is the ability to benchmark the individual work of each employee. These provide managers with the tools to monitor and evaluate performance as well as the basis for any decisions and actions that must be made. The specific performance of an employee influences all decisions a manager makes concerning that individual. An employee performing at a high level will be given more leeway in the decisions made about him or her since results are being produced. A poorly performing individual will have more stringent decisions made about him or her.

10. Focus on the Target Market:

Most corporate goals and objectives are designed to move a company forward, while maximizing the utilization of human and physical resources to enhance productivity, efficiency and profitability. In this pursuit, companies are increasingly gearing specific products and services to profitable niche markets where they can gain a competitive advantage. The use of performance management techniques allows managers to redefine or refine the target market so that it is aligned with the objectives established by senior management. As a decision-making parameter, managers can guide and direct employees through plans to better focus their efforts on these intended niche markets. As markets are increasingly more competitive, rapid changes and shifts in marketing strategies are often required. The use of performance management criteria allows managers to shift their people’s focus and ensure all decisions they make are consistent with this impetus.

11. Guidance:

The company’s mission statement, goals and objectives provide guidance to the manager and the basis for their performance management program. Additionally, these provide managers with specific parameters with which to guide and direct their own actions and those of their employees, while also giving them the guidance they need when making decisions. There will be times when senior management may need to clarify issues and concerns, but the progression of goals and objectives should flow smoothly from senior management to the individual employee.

12. Pinpointing Performance Problems:

The use of specific metrics in a performance management program allows managers to make decisions regarding performance breakdowns. Initially, it allows the manager to pinpoint problems and take the proper corrective actions to immediately rectify them before they become a major issue.

13. Cultivate a system-wide, long-term view of the organization:
Richard A. Swanson, in Performance Improvement Theory and Practice (Advances in Developing Human Resources, 1, 1999), explains an effective performance improvement process must follow a systems-based approach while looking at outcomes and drivers. Otherwise, the effort produces a flawed picture. For example, lying off people will likely produce short-term profits. However, the organization may eventually experience reduced productivity, resulting in long-term profit loss.

14. Succession and Career planning:

The Performance Management process provides valuable information that can be used during succession and career planning. Employee aspirations can be clarified and where possible incorporated into overall planning of the employee’s goals and outputs as well as his development plan. Clarification of the managers goals and direction regarding the employee and his role within the department. Compilation of formal training and development plans per employee to ensure the development of the employee based on the results of the performance evaluation phase of the process.

15. Performance Standards and indicators:

Performance Management focuses on specific valuable outputs that the individual must deliver which is linked to specific goals and standards that must be achieved during the evaluation period. By clearly defining the outputs, performance standards and performance indicators the subordinate can understand exactly what is expected from him. The impact of the subordinate’s outputs on the department and organization can be explained much easier during the planning phase.

Disadvantages of Performance Management System:

The organizations that do not have strong performance management systems can have a negative effect both on employees as well as their managers.  However, a well designed and consistently managed performance management process can be rewarding for both the employee as well as the manager. The following is some of the disadvantages or problems of implementing a Performance Management process within a company.

1. Time Consuming:

It is recommended that a manager spend about an hour per employee writing performance appraisals and depending on the number of people being evaluated, it can take hours to write the department’s PA but also hours meeting with staff to review the PA.  I’ve know managers who had 100 plus people to write PAs on and spending weeks doing it.

2. Discouragement:

If the process is not a pleasant experience, it has the potential to discourage staff.  The process needs to be one of encouragement, positive reinforcement and a celebration of a year’s worth of accomplishments. It is critical that managers document not only issues that need to be corrected, but also the positive things an employee does throughout the course of a year, and both should be discussed during a PA.

3. Inconsistent Message:

If a manager does not keep notes and accurate records of employee behavior, they may not be successful in sending a consistent message to the employee. We all struggle with memory with as busy as we all are so it is critical to document issues (both positive and negative) when it is fresh in our minds so we have it to review with the employee at performance appraisal time.

4. Evaluator Bias:

A disadvantage of performance evaluations is that the managers evaluating employees may show bias to certain employees, which may happen intentionally or unintentionally. According to Jonathan A. Segal of Business week, one risk of using performance evaluations is that some managers unconsciously favor employees that possess similar characteristics as the manager. Bias causes managers to focus more on the personality and style of the employee instead of the actual achievements. This can result in good employees feeling slighted, which may cause tension in the workplace. Bias also affects the favorable employee because he may miss much-needed guidance to improve his performance.

5. One-Sided:

Another disadvantage of performance evaluations is that the meeting can result in a one-sided conversation. Although a manager may give an employee a chance to offer feedback, some managers already make up their mind about an employee and are not opened to two-sided dialogue. If the performance review is one-sided, employees may feel as if their opinions do no matter. This may cause an employee to shut down and refuse to communicate with management in the future. Managers should listen to feedback presented by employees, and correct evaluations if employees make valid points.

6.  Lack of Management commitment:  

Even though you may spend lots of time and effort in designing and implementing a performance management process for your organization it may have a negative impact on performance due to the level of management commitment. The most important factor to successfully implement this process is the commitment and support of Top Management as well as Line Management. Employees must “feel” that management is committed to the process and it is to their own benefit to improve their performance, as there are some rewards in the pipeline should they improve their performance.

7. Negative Attitudes:

 Negative attitudes of managers:

1. Conflicting goals with regard to performance evaluation.

2. Lack of knowledge regarding the setting of objective performance standards.

3. Incompetence to distinguish between responsibilities that the subordinate has control over and responsibilities the subordinate does not have control over.

4. Fear of communicating performance evaluation results to the subordinate.

5. It de-motivates employees.

6. Performance evaluation is used for reprimanding poor performance.

Negative attitudes of subordinates:

1. Lack of understanding why performance is evaluated.

2. Lack of objectivity and fairness.

3. Subjective measuring used for performance evaluation.

4. Personality evaluation and not evaluation of outputs.

5. Managers attitude that the subordinate is in full control of his performance.

6. Nothing is done after the performance evaluation.

7. Performance evaluation is just a tool to discipline the subordinate and has no advantages for the subordinate


8. Risk of Internal Competition:

Under this system, employees compete with each other for job status, position and pay. This could amount to backstabbing, failure among team members to communicate efficiently and strong employee rivalry. It could lead to dysfunction of the department and/or team, resulting in failure to achieve performance standards.

9. Favoritism:

Managers and supervisors tend to trust and depend on one employee more than the others. This employee could be the foreman or the team leader. This employee is entrusted with responsibility of explaining new job roles and duties to other employees. It leads to dissension and distrust among the group members. It causes team fraction and adversely effects employee morale and satisfaction. The attitude is “Why should I even try when the boss will only trust Employee A?”

10. Convoluted and Bureaucratic:

The company ends up hiring and training new personnel. Performance management creates new organizational layers. The employee population increases. Now, instead of one team to do a project, two teams are doing it. This actually affects the financial structure of the organization.

Definition of Reward Systems:


Every company needs a strategic reward system for employees that address these four areas: compensation, benefits, recognition and appreciation. The problem with reward systems in many businesses today is twofold: They’re missing one or more of these elements (usually recognition and/or appreciation), and the elements that are addressed aren’t properly aligned with the company’s other corporate strategies. A winning system should recognize and reward two types of employee activity-performance and behavior. Performance is the easiest to address because of the direct link between the initial goals you set for your employees and the final outcomes that result. For example, you could implement an incentive plan or recognize your top salespeople for attaining periodic goals.

Performance-Based Incentives

You can enhance you employees’ motivation is by defining their tasks and attaching compensation-based incentives to a certain levels of performance. Among varied types of performance-based incentive plans, yearly bonus compensation is fairly common. Many organizations operate such a program for their employees, particularly mid-tier management employees, where employees receive a percentage of their annual salaries as a bonus. For more on-hands employees, such as those working on the factory floor or ground sales teams, you can adopt commissions, spot bonuses, output bonuses or suggestion incentive programs.

Employee Recognition

You also can use no monetary rewards to motivate employees. For example, employee recognition fulfills the psychological needs and desires of employees. Schemes such as “sale person of the month” or “employee of the year” certificates help boost morale as you recognized the employee for his outstanding efforts. Appreciative feedback from supervisors and managers also serve as employee recognition and helps to boost morale. Holding seminars, exhibitions and workshops and encouraging employees to participate and then awarding the employee for participation in these events also derives motivation and recognition for employees involved.

Ownership Options

Many times, because executives and upper-tier management are responsible for the organization’s foremost affairs, incentive plans at this level involve a higher sense of goal congruency between these employees and the organization. Therefore, you can adopt profit-sharing and stock options, using the element of ownership to motivate and enhance the employee’s performance. Employees who believe they are part owners of the company may become more efficient and productive because they believe the company’s successes are their own.


The major goal of an organization’s reward system is to keep its employees motivated so that they continually perform better at their tasks. The theories of motivation by various experts such as Herzberg and Maslow state one thing synonymously: The physiological and psychological needs and desires of employees must be met and maintained to keep them motivated. Therefore, try to keep your employees’ needs and desires in mind when designing your organization’s reward systems. Core characteristics of a robust reward system include both intrinsic and extrinsic motivators.


Bonus programs have been used in American business for some time. They usually reward individual accomplishment and are frequently used in sales organizations to encourage salespersons to generate additional business or higher profits. They can also be used, however, to recognize group accomplishments. Indeed, increasing numbers of businesses have switched from individual bonus programs to one which rewards contributions to corporate performance at group, departmental, or company-wide levels.

According to some experts, small businesses interested in long-term benefits should probably consider another type of reward. Bonuses are generally short-term motivators. By rewarding an employee’s performance for the previous year, they encourage a short-term perspective rather than future-oriented accomplishments. In addition, these programs need to be carefully structured to ensure they are rewarding accomplishments above and beyond an individual or group’s basic functions. Otherwise, they run the risk of being perceived of as entitlements or regular merit pay, rather than a reward for outstanding work. Proponents, however, contend that bonuses are a perfectly legitimate means of rewarding outstanding performance, and they argue that such compensation can actually be a powerful tool to encourage future top-level efforts.

Profit Sharing:

Profit sharing refers to the strategy of creating a pool of monies to be disbursed to employees by taking a stated percentage of a company’s profits. The amount given to an employee is usually equal to a percentage of the employee’s salary and is disbursed after a business closes its books for the year. The benefits can be provided either in actual cash or via contributions to employee’s 401(k) plans. A benefit for a company offering this type of reward is that it can keep fixed costs low.

Stock Options:

Previously the territory of upper management and large companies, stock options have become an increasingly popular method in recent years of rewarding middle management and other employees in both mature companies and start-ups. Employee stock-option programs give employees the right to buy a specified number of a company’s shares at a fixed price for a specified period of time (usually around ten years). They are generally authorized by a company’s board of directors and approved by its shareholders. The number of options a company can award to employees is usually equal to a certain percentage of the company’s shares outstanding.

Group-Based Reward System:

As more small businesses use team structures to reach their goals, many entrepreneurs look for ways to reward cooperation between departments and individuals. Bonuses, profit sharing, and stock options can all be used to reward team and group accomplishments. An entrepreneur can choose to reward individual or group contributions or a combination of the two. Group-based reward systems are based on a measurement of team performance, with individual rewards received on the basis of this performance. While these systems encourage individual efforts toward common business goals, they also tend to reward under-performing employees along with average and above-average employees. A reward program which recognizes individual achievements in addition to team performance can provide extra incentive for employees.

Variable Pay:

Variable pay or pay-for-performance is a compensation program in which a portion of a person’s pay is considered “at risk.” Variable pay can be tied to the performance of the company, the results of a business unit, an individual’s accomplishments, or any combination of these. It can take many forms, including bonus programs, stock options, and one-time awards for significant accomplishments. Some companies choose to pay their employees less than competitors but attempt to motivate and reward employees using a variable pay program instead. Good incentive pay packages provide an optimal challenge, one that stretches employees but remains in reach. If too much is required to reach the goal, the program will be ignored.

Aims and Roles of Performance Management Systems:

The Aims of Performance Measurement:


According to Lockett (1992), performance management aims at developing individuals with the required commitment and competencies for working towards the shared meaningful objectives within an organizational framework. Performance management frameworks are designed with the objective of improving both individual and organizational performance by identifying performance requirements, providing regular feedback and assisting the employees in their career development. Performance management aims at building a high performance culture for both the individuals and the teams so that they jointly take the responsibility of improving the business processes on a continuous basis and at the same time raise the competence bar by upgrading their own skills within a leadership framework. Its focus is on enabling goal clarity for making people do the right things in the right time. It may be said that the main objective of a performance management system is to achieve the capacity of the employees to the full potential in favor of both the employee and the organization, by defining the expectations in terms of roles, responsibilities and accountabilities, required competencies and the expected behaviors. The main goal of performance management is to ensure that the organization as a

– To help clarify organization goals, directions and expectation.

– To help organizations learn how to accomplish goals more effectively.

– To communicate the priorities of the organization.

– To support strategic/business line planning by linking broad statements of direction to specific operational outputs and outcomes.

– To support budgetary planning and resource allocation processes.

– To monitor the operation of programs and to make continuous improvements.

– To assess whether the organization is achieving its goals.

– To strengthen internal administrative and external political accountability.


The role of Performance Management System:


The major objectives of performance management are:

-To enable the employees towards achievement of superior standards of work performance.

-To help the employees in identifying the knowledge and skills required for performing the job efficiently as this would drive their focus towards performing the right task in the right way.

-Boosting the performance of the employees by encouraging employee empowerment, motivation and implementation of an effective reward mechanism.

-Promoting a two way system of communication between the supervisors and the employees for clarifying expectations about the roles and accountabilities, communicating the functional and organizational goals, providing a regular and a transparent feedback for improving employee performance and continuous coaching.

-Identifying the barriers to effective performance and resolving those barriers through constant monitoring, coaching and development interventions.

-Creating a basis for several administrative decisions strategic planning, succession planning, promotions and performance based payment.

-Promoting personal growth and advancement in the career of the employees by helping them in acquiring the desired knowledge and skills.

The Role of the Manager in Performance Management:


An organization’s success is not just dependent upon having the right strategy and resources. It is also reliant upon the ability of its management to harness, direct and support teams and individuals to engage in delivering the organization’s mission and objectives. Managers play a critical role in delivering performance. Managers need to be able to consistently deliver performance and results and get the best possible performance from the teams and individuals they manage. Effective performance management enables employees and teams to understand the goals of the organization and to identify how individual and team outputs contribute to the achievement of organizational objectives in line with organizational values. The integration of people, planning and performance with organizational objectives develops individual, team and organizational capability leading to higher performance. An effective performance management process helps to establish and support the link between strategic business objectives and people’s day-to-day actions and tasks. An effective goal setting system, combined with a process for tracking progression can contribute significantly to individual, team and organizational performance.

An effective performance management process enables managers to evaluate and measure individual and team performance and to optimize performance and productivity. Managing Performance is the procedure of evaluation of progression, of an establishment, towards a desired goal. The purpose of performance management is to ensure accomplishment of business objectives and to increase the strength of the employees.


Some of the key concerns of a performance management system in an organization are:


-Concerned with the output (the results achieved), outcomes, processes required for reaching the results and also the inputs (knowledge, skills and attitudes).

-Concerned with measurement of results and review of progress in the achievement of set targets.

-Concerned with defining business plans in advance for shaping a successful future.

-Striving for continuous improvement and continuous development by creating a learning culture and an open system.

-Concerned with establishing a culture of trust and mutual understanding that fosters free flow of communication at all levels in matters such as clarification of expectations and sharing of information on the core values of an organization which binds the team together.

-Concerned with the provision of procedural fairness and transparency in the process of decision making.

The performance management approach has become an indispensable tool in the hands of the corporate as it ensures that the people uphold the corporate values and tread in the path of accomplishment of the ultimate corporate vision and mission. It is a forward looking process as it involves both the supervisor and also the employee in a process of joint planning and goal setting in the beginning of the year.

Characteristics of an Ideal Performance Management System:


Companies use performance management systems to evaluate employees’ efficiency at work and ability to perform certain tasks, either by automated or human processes. These systems come in many varieties, and every company will tailor its performance management system to fit its specific needs. However, there are certain aspects common to all effective performance management systems. A combination of forms, processes and procedures is used by organizations to evaluate their employees’ job performance. The ideal performance management system consists of several elements: job descriptions, performance expectations, appraisals, disciplinary policies and commendations. Although supervisors and employees alike often dread annual performance evaluations and appraisals, many performance management systems function well and provide adequate support for a productive workforce.


If your evaluation criteria and methods are not standardized, you cannot say that you use them to hold your employees to a “standard.” The aspects of performance that you measure must be uniform, and you must strive to maintain a constant level of strictness. Varying your level of strictness or your methods will only lead to your employees lacking faith in their managers and in the system itself.

Validity and Conciseness

Performance management systems should only measure what is valid to the tasks at hand. Less is often more when it comes to selecting evaluation criteria. If you are evaluating customer-service representatives in a call center, do not evaluate them on their ability to operate heavy machinery.


Performance appraisals — the annual evaluation of employee performance — must be timely. Although supervisors and employees alike may dread the appraisal season, they may also look forward to know how well their performance ranks when compared to the employer’s expectations. A timely performance appraisal works to address problems and deficiencies before they become too serious. Likewise, employee performances worthy of commendation should be immediately recognized to reinforce the positive behavior and action.

Proper Training for Evaluators

No performance management system can succeed when those carrying out evaluations are inadequately trained. Make sure that your evaluators fully understand the responsibilities of those whom they are evaluating. Have them work in that capacity for a short time if necessary. When possible, have those who have proven their ability to work well in that capacity performs the evaluations.

No Bias of Reward

Do not reward evaluators for finding negative or positive results, as this will skew their evaluations in either direction or lead to distrust between your employees.

Job Descriptions

An accurate job description is a fundamental characteristic of an ideal performance management system. Without a clear understanding of job duties, it’s impossible to know what the employee is supposed to be doing. The job description isn’t a laundry list of tasks for each title or position; however, it contains the essential functions of each job and the qualifications necessary to perform those tasks.


An ideal performance management system provides training for supervisors who conduct employee evaluations. The training consists of techniques for giving complimentary as well as constructive feedback to employees, learning how to determine when disciplinary review is warranted and how to write up employees for disciplinary action. In addition, supervisors learn how to evaluate employees objectively. Training for employees explains how their performance will be measured and evaluated, as well as what actions are subject to disciplinary review and the policies for receiving disciplinary counseling and notices.

Open communication

 Most employees want to know how well they are performing the job. A good management system provides the needed feedback on a continuing basis. The PM interviews should permit both parties to learn about the gaps and prepare themselves for future. To this end, managers should clearly explain their performance expectations to their subordinates in advance of the appraisals period. Once this is known, it becomes easy for employees to learn about the yardsticks and, if possible, try to improve their performance in future.

Setting SMART Goals for Employees:

A good performance management system set a smart and efficient goal for the employee. That type of performance management system can help to build a employees performance as well as confidence


Employees generally want to know how their performance is connected to pay. This question often comes up during the interview stage, so it’s an important factor for employees, especially workers who have become accustomed to extra rewards for their efforts. An ideal performance management system has a tie-in with compensation, whether it’s a certain percentage raise or wage hike based on the employee’s level, effort or actual performance and productivity. Money isn’t everything, but management consultant and HR expert Dick Grote recognizes the ideal performance management system as being able to “mobilize the energy of every employee in the enterprise toward the achievement of strategic goals.”

Performance Management Process:


Performance management process sets the platform for rewarding excellence by aligning individual employee accomplishments with the organization’s mission and objectives and making the employee and the organization understand the importance of a specific job in realizing outcomes. By establishing clear performance expectations which includes results, actions and behaviors, it helps the employees in understanding what exactly is expected out of their jobs and setting of standards help in eliminating those jobs which are of no use any longer. Through regular feedback and coaching, it provides an advantage of diagnosing the problems at an early stage and taking corrective actions.

Performance management is the systematic process by which an agency involves its employees, as individuals and members of a group, in improving organizational effectiveness in the accomplishment of agency mission and goals.

Performance management can be regarded as a continuous process managing the performances of people for getting desired results. Performance management is beneficial to all the major stakeholders of an organization by clearly describing what is supposed to be done for attaining certain desired goals. Performance management is the heart of any HR processes in an organization as it influences the rest other HR functions or processes. Focus on performance management may be fruitless without the existence of proper organizational design and management systems.

Performance Planning:

Performance planning is the first crucial component of any performance management process which forms the basis of performance appraisals. Performance planning is jointly done by the appraisee and also the reviewee in the beginning of a performance session. During this period, the employees decide upon the targets and the key performance areas which can be performed over a year within the performance budget, which is finalized after a mutual agreement between the reporting officer and the employee.

In an effective organization, work is planned out in advance. Planning means, setting performance expectations and goals for groups and individuals to channel their efforts toward achieving organizational objectives. Getting employees involved in the planning process will help them understand the goals of the organization, what needs to be done, why it needs to be done, and how well it should be done.


Performance Execution:

Once the performance-planning phase has been completed, it’s time to get the job done—to execute the plan. Performance execution is the second phase of an effective performance management process. For the individual, the critical responsibility in Phase II is getting the job done—achieving the objectives. For the appraiser, there are two major responsibilities: creating the conditions that motivate, and confronting and correcting any problems. In an effective performance management system, performance execution also includes a midterm review to ensure that performance is on track.

Employee Responsibilities in Performance Execution:


  • Commitment to goal achievement
  • Ongoing requests for feedback and coaching
  • Communication with supervisor
  • Collecting and sharing performance data
  • Preparing for performance reviews

Manager Responsibilities in Performance Execution:


  • Observation and documentation
  • Updates
  • Feedback
  • Resources
  • Reinforcement

Performance Assessment:

The performance assessment summarizes the employee’s contributions over the entire appraisal period (usually one year). It may occur as often as is necessary to acknowledge the employee for accomplishments and to plan together for improved performance.

Much of the hard work of appraising performance should be carried out before the assessment meeting. Prior to the meeting managers can encourage employee involvement

By asking the employee to:

-Prepare a self-evaluation and/or

-List accomplishments and identify areas for improvement and/or

-Provide names of key clients who can give feedback on the employee’s performance

-Propose work-related and professional objectives for the next review period

Managers should review the employee’s:

-Objectives for the appraisal period – level of accomplishment and progress

-Professional development over the review period

-Input provided by key clients and colleagues

-Previous performance appraisals

The assessment discussion is simply a continuation of the momentum established throughout the year. The key is to set a tone that is open and productive, and to ensure that by the end of the discussion both manager and employee have reached an understanding on any issues that require further discussion, timelines for completion, objectives that need to be met for the next year, and review points. For suggestions, including questions to stimulate discussion

Performance Review:

Review of performance once or twice in a year provides an objective or a sense of focus on the key performance or development issues. Performance review meetings form the basis for enabling both the managers and the individuals to positively explore ways for improving the performance in the near future and to identify solutions for resolving the issues which come in the way of attainment of predetermined performance standards.

Some of the crucial objectives of performance reviews are as follows:

-Performance planning

-Employee motivation and empowerment

-Learning and Development

-Acts as a two way channel for communication for discussing the roles, expectations, relationships and work problems.

Performance review meetings should focus on two major areas: Firstly on performance improvement measures and secondly, the meeting should be forward looking in nature rather than backward looking. The main problems which normally arise during the period of performance reviews are:

-Identification of performance measures and the criterions for evaluating performance.

-Problems in collection of genuine performance related evidences.

-Manager’s bias.

-Conflicts between the reviewers and the people being reviewed.

-Defensive behavior from the people under review as a response to some criticisms.

Performance Renewal and Re-contracting:

The final step in the performance process is renewal and re-contracting. Essentially this is identical to the performance planning components. In this stage employee get reward based on their merit, or if the employee’s performance is not satisfactory then the manager can end relation with that employee. In an effective organization, rewards are used well. Rewarding means recognizing employees, individually and as members of groups, for their performance and acknowledging their contributions to the agency’s mission.

Key Components of Performance Management:

The employee and the business will benefit from regular and continuous feedback and coaching and feedback. This helps develop capabilities, confidence, knowledge and self awareness. Achieve this with regular quality conversations.

The coaching role is performed by direct supervisors, counselor or mentor. Coaching is a pre-requisite for a good performance management approach.

Implementing the following steps should ensure success.

Determine Business Goals:

Each employee or team if appropriate should set their own goals and objectives in line with the strategic business vision. This enables company leaders to reference goals and targets to departments and divisions.

Individual goals should be measured using clear success or failure indicators or Key Performance Indicators (KPIs). This allows each individuals performance to be measured in relation to his or her contribution to the company.

Define Position Responsibility:

This gives an employee ownership of their role and empowers them to improve performance based on clear guidelines. As a manager it allows you to plan for performance continuity, and anticipate future talent requirements, roles and number of staff required.

When defining roles consider:
-Performance expectations
-Qualifications, experience or credentials

Performance & Development Plan (PDP):

The purpose of a PDP is to manage and track the performance and development of an individual employee. The PDP plots the annual performance cycle, covering the results and personal growth the employee is expected to achieve within a set time frame.

Set SMART objectives. Specific, Measurable, Realistic and Time-bound.

Determine what tools you’re employee will need including, training, coaching or mentoring and link desired outcomes with specific work-place tasks.

Performance appraisal process:

Establishing Performance Standards:

A performance standard is a management-approved expression of the performance threshold(s), requirement(s), or expectation(s) that must be met to be appraised at a particular level of performance. A Fully Successful (or equivalent) standard must be established for each critical element and included in the employee performance plan. If other levels of performance are used by the appraisal program, writing standards for those levels and including tem in the performance plan is not required by is encouraged so that employees will know what they have to do to meet standards higher than Fully Successful.

Communicating the Standards:

Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be informed and the standards should be clearly explained to the. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.

Measuring performance:


HR dept should prepare all materials, notes agreed tasks and records of performance, achievements, incidents, reports etc – anything pertaining to performance and achievement.

Inform the appraisee:

• To ensure the appraisee is informed of a suitable time and place and clarify purpose and type ofappraisal.
• Give the appraisee the chance to assemble data and relevant performance and achievement records and materials.

Review and measure

HR dept and managers / supervisors review the activities, tasks, objectives and achievements one by one, keeping to distinct separate items one by one.


Agree an action plan

• An overall plan should be agreed with the appraisee, which should take account of the job responsibilities and review strengths and weaknesses.
• The plan can be staged if necessary with short, medium and long term aspects, but importantly it must be agreed and realistic.

Comparing with desired criteria

• The actual performance is compared with the desired or performance criteria.
• The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance.

 Discussing results

The result of the appraisal should be communicated and discussed with the employees.

• The feedback should be given with a positive attitude as this can have an effect on the employees’ future performance.
• The purpose of the meeting should be to solve the problems faced and motivate the employees to perform better.
• The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus.

How to Define Employee Performance Standards

Step 1

Evaluate your management staff amp; understanding of performance standards. The federal government&amp personnel management office definition is one that is widely accepted in the human resources community. If your supervisors and managers do not fully understand the meaning of performance standards, have your training specialist develop curriculum that addresses performance standards and how to measure performance. It&ampimperative that your supervisors and managers know what constitutes performance standards–without this basic knowledge, your performance management system will be ineffective.

Step 2

Assign your human resources leader as project manager for defining your company performance standards. The standards will vary according to industry or business, and job function and expectations. The preparation for developing performance standards include reviewing job descriptions and specifications, and establishing levels such as "exceeds expectations," "meets expectations" and "does not meet expectations." Although it&amps primarily a semantical matter, you want to establish levels that delineate excellent to satisfactory to poor performance.

Step 3

Select a job title or group; obtain or create job descriptions and specifications for that position. Each job description should describe essential functions and requirements for the job. You may require input from supervisors, managers and employees on specific job duties.

Step 4

Look at each job function to determine what the employee must do to exceed, meet or fail to meet expectations. For example, in a sales position you want to the employee to sell 65 dresses each month to meet expectations. If the store employee sells considerably more or less than 65 dresses, her performance would be rated & quot; exceeds& quot; or & quot; does not meet& quot; expectations, respectively. In the hospitality and food service industries, performance standards are sometimes referred to as service standards.

Step 5

Transfer these performance standards to your performance appraisal forms, and include an explanation of them in your employee handbook. Train your management team how to incorporate the performance standards into an employee evaluation. Introduce these during new hire orientation and discuss them with current employees during an all-staff meeting.

Determinants of Employee Performance

Kyra Sheehan has been a writer for various publications since 2008. Her work has been featured in “The Desert Leaf” and “Kentucky Doc Magazine,” covering health and wellness, environmental conservatism and DIY crafts. Sheehan holds an M.B.A. with an emphasis in finance.

Businesses implement performance management protocols to track how well employees perform their duties in the workplace. Evaluating employee performance entails assessing their accomplishments, behaviors and professionalism over a specific period.


  • Managers use performance evaluations to score employees’ work. According to “Psychology Today,” work assessments determine whether the employee qualifies for a raise, bonus, promotion or disciplinary action. Under the “accomplishments” category, supervisors gauge the employees’ productivity, efficiency, effectiveness and quality of their work.
  • The way an employee behaves affects how his supervisor views his overall performance. Behavioral determinants include the types of relationships the employee maintains with coworkers, clients and business associates; whether or not the employee adheres to the code of conduct and code of ethics, and how much the employee displays motivation and commitment to his work.
  • An employee who displays a professional attitude in the workplace is a valuable asset to employers. Good organizational and time management skills are examples of professionalism. Physical appearance and an employee’s ability to communicate effectively also affect professionalism. Employees who exhibit professionalism receive strong scores on performance evaluations.

Behavioral Determinants


Managing the performance of staff is arguably one of the most complex and challenging aspects of leadership. It is often a balancing act – balancing direction with empowerment, delegation with control, engagement with expedience, relationships with organizational imperatives. One thing is certain; very few of us have mastered the art of managing performance.

What is Performance Dimensions?

The Performance Dimensions Framework is designed to build capacity for effective management of organizational, team and individual performance. The Framework is used to assist managers and teams to analyses:

  • The extent to which the team(s) and individuals are clear and agreed about expectations in terms of outcomes, outputs, behavior, processes, client and stakeholder expectations and time-frames.
  • The extent to which the team(s) and individuals review and evaluate performance, feedback is sought, exchanged and acted upon.
  • Motivational factors that impact upon performance – both intrinsic and extrinsic aspects.
  • The match between expectations of quality, quantity and appropriateness and the systems, structures and resources available and in use.
  • The team atmosphere and culture and the extent to which staff, managers and colleagues support each other to perform.
  • The capacity and confidence (including skills, knowledge and expertise) of the team(s) and individuals to perform to the standards expected.

Performance Dimensions is a unique and robust diagnostic tool developed by People & Strategy. The tool has been tested with over 20,000 managers and countless staff in many different public and private sector environments. Participants are introduced to the diagnostic tools of the Performance Dimensions framework to assist them in understanding and planning to create or maintain a high performing work environment.

Approaches to Performance Measurement

Performance measurement has become so widespread that it is impossible to know all that is taking place within governments across the world. Also, the labels and the focus of performance measurement systems shift, usually when a new government takes office. Positive, action-oriented words are usually chosen as names for such systems — ‘Measuring Up’ in Alberta, the ‘Oregon Benchmarks’, the ‘Minnesota Milestones’ and ‘Best Value’ in the United Kingdom. Despite such inspirational language, some of the early leading performance measurement systems have recently been reduced in scope or dropped entirely. Keeping track of the rise and fall of performance measurement systems is made somewhat easier by the Internet (government websites, on-line reports and electronic journals) but the problem has become information overload and knowing what credibility should be assigned to the ‘official’ descriptions, given that governments are interested in promoting the best possible reputation for their efforts.

There is no single, ‘one best’ approach to performance measurement. A government needs to develop an approach that fits with its constitutional/institutional arrangements, its political and administrative traditions, its size and organizational capabilities, its current environment and issues and, not least important, what it can afford. The tendency has been for governments to apply a single approach uniformly to all departments, non-departmental bodies and programs. This ‘across-the-board’ approach may have the apparent virtues of consistency, comparability and fairness, but it is not without problems. The fundamental problem is that organizations and programs differ in the extent to which they are amenable to measurement, especially in terms of linking outcomes in society to programs. Routine, operational programs with narrower goals and better understood production processes allow for easier and more coherent measurement than ‘softer’ programs serving broader, more controversial goals, the achievement of which is not well understood and/or depends upon the exercise of a wide measure of professional discretion and judgment. In view of these differences, there is the legitimate concern that the use of performance measurement, especially an insistence on quantification of outcomes and benefits, will create an institutionalized bias in favor of so-called ‘hard’ programs whose production processes are relatively well understood. The need for balance between quantification and relying on the numbers versus qualitative evidence and telling the ‘performance story’ is examined later in this paper.

During the past decade, the federal and provincial governments in Canada have developed two broad approaches to the development of measures and indicators of performance. In Alberta, Nova Scotia, Ontario and Quebec, governments have reported on the performance of the entire government in terms of the presumed impacts of their activities on society. This ‘social-indicator’ type of approach supports external, political accountability by providing information which relates to the concerns of citizens. However, the selection of indicators to feature in ‘report cards’ to citizens is inherently arbitrary (why waiting lists for surgeries rather than impacts of preventative measures in health care?), and the problems of attributing changing economic and social conditions to government actions or inactions is next to impossible. Other provinces and the Government of Canada began their performance measurement efforts by requiring individual departments to prepare business plans and performance reports. The ‘business-line’ approach is more of a managerial tool than something which would normally be used by politicians and the public.

These two broad approaches — the system-wide and the business-line — could be pursued simultaneously and complement one another. This has been the evolution of the performance reporting system in the Government of Canada. It began by publishing performance reports on a departmental basis and now more than 80 such documents for departmental and non-departmental bodies are tabled in Parliament on a annual basis. Beginning in 2001, the President of the Treasury Board also released on an annual basis a report to Canadians covering nineteen social indicators, reflecting the four themes of economic opportunities, health, the environment and the strength and safety of Canadian communities.

This evolution can be contrasted with Manitoba’s experience. Under the Progressive Conservative government of Premier Gary Film on (1988–1999), the province adopted a program called ‘Manitoba Measures’ based upon the departmental business plans model. Conferences, training sessions and investments in performance measurement took place as departments began to create the capacity demanded by the ‘centre’ of government. Then, after the New Democratic Party (NDP) took office in September, 1999, the ‘Manitoba Measures’ program was abruptly dropped. A full post-mortem of its demise has yet to be written, but it seems the new government believed that the program was ineffective because it did not address the real concerns of politicians and was not integrated with program planning and budgeting. Presumably encouraged by the new government, the Manitoba Bureau of Statistics began development of a ‘Manitoba Well Being Index’ which would track economic, social and environmental conditions to produce an aggregate measure of ‘total well being’. Just as the ‘business line’ approach seemed to be consistent with the ‘market’ philosophy of the Progressive Conservatives, the ‘social well being’ approach matched the NDP’s commitment to a broader role for government.

Even when governments limit their performance measurement efforts to individual departments and programs, the problems of defining and measuring successful performance is only slightly less challenging. Governments have developed a number of different frameworks to identify successful programs. Probably the most common framework involves the so-called ‘three big Es’: economy, efficiency and effectiveness. In simple terms each of the three Es can be described as follows:

EconomyHave resources been acquired at least cost?
EfficiencyAre the inputs (people, money, supplies) being combined to produce the maximum volume of outputs (goods and services)?
EffectivenessAre the goals of the organization program being met, without undue unintended consequences?

These elements have been at the centre of all the ‘rational’ management approaches applied to the public sector over the past four or five decades. However, the framework does not cover some dimensions of performance. It does not cover the fourth Big E, equity, which deals with the distributional impacts of performance. Omitting equity may have an impact on another important E in government, namely electability. In recent years, many governments have added a ‘customer satisfaction’ component to the effectiveness component of the three E model. Also, the framework does not directly address the issue of the capability and desirability of delivering a designated set of results.

In its earlier program evaluation scheme, the Government of Canada indicated that a program was deemed to be well performing when it was:

RelevantContinues to be consistent with government-wide and department priorities
SuccessfulContinues to be consistent with government-wide and department priorities
Cost-effectiveInvolves the most appropriate and efficient means to achieve goals.

This framework deals with the desirability of continuing a program, but not the issue of whether the organization has the capability and capacity to deliver the desired results.

Organizational report cards represent another type of performance measurement and reporting.


The attributes of an effective organization were:

  • management direction
  • relevance
  • appropriateness
  • achievement of purpose
  • acceptance
  • secondary impacts
  • costs and productivity
  • responsiveness
  • financial results
  • working environment
  • monitoring and reporting

Several jurisdictions have since applied this framework, including for crown corporations in the federal government and hospitals in some provinces. The framework incorporates features of previous approaches and does address more directly the issue of future organizational capacity to deliver results. Operational meanings behind indicators have to be assigned to each of the attributes. There may be conflict in practice among the attributes — e.g., cost efficiency may reduce responsiveness. Finally, the issue of aggregating data on each dimension to arrive at some overall judgment about effectiveness is a challenge.

  • Validity
  • Comprehensiveness
  • Comprehensibility
  • Relevance
  • Reasonableness
  • Functionality

William T. Gormley and David L. Weimer, Organizational Report Cards. Cambridge, Mass.: HarvardUniversity Press, 1999. pp. 36-7

The final framework to be discussed here comes out of the management audit work of the Office of the Auditor General of Canada (OAG). The OAG distinguishes among six different components of performance:

  1. Mission statements
  2. Results statements
  3. Performance indicators/measures
  4. Performance expectations/targets/commitments
  5. Strategies/activities
  6. Performance accomplishments/achievements

As befits the role of a legislative auditor, this framework emphasizes the desirability of integrating performance planning, budgeting, monitoring and reporting. The framework also stresses external accountability for results. These two topics are addressed later in this paper.

Trait Approach




1an approach to studying personality that focuses on the extent to which individuals differ impersonality dispositions 
2an approach to studying personality that focuses on how individuals differ in personality dispositions 
3a leadership perspective that attempts to determine the personal characteristics that great leaders share 
4a perspective in which personality is seen as a combination of characteristics that people display over time and across situations 
5An approach to studying personality that focuses on the extent to which individuals differ in personality dispositions. 
6A leadership perspective that attempts to determine the personal characteristics that great leaders share. 
7attempts to show that leaders possessed certain characteristics that nonreaders did not 
8a perspective on personality that views it as the combination of stable characteristics that people display over time and across situations 
The Behavioral Approach

Human behavior is learned, thus all behavior can be unlearned and new behaviors learned in its place. Behaviorism is concerned primarily with the observable and measurable aspects of human behavior. Therefore when behaviors become unacceptable, they can be unlearned. Behaviorism views development as a continuous process in which children play a relatively passive role. It is also a general approach that is used in a variety of settings including both clinical and educational.

Behaviorists assume that the only things that are real (or at least worth studying) are the things we can see and observe. We cannot see the mind, the id, or the unconscious, but we can see how people act, react and behave. From behavior we may be able to make inferences about the minds and the brain, but they are not the primary focus of the investigation. What people do, not what they think or feel, is the object of the study? Likewise the behaviorist does not look to the mind or the brain to understand the causes of abnormal behavior. He assumes that the behavior represents certain learned habits, and he attempts to determine how they are learned.

The material that is studied is always behavior. Because behaviorists are not interested in the mind, or its more rarified equivalents such as psyche and soul, inferences about the conditions that maintain and reinforce human behavior can be made from the study of animal behavior. Animal research has provided a very important foundation for the behavioral approach. The behavioral researcher is interested in understanding the mechanisms underlying the behavior of both normal individuals and those with problems that might be referred as “mental illness”. When the behavioral model is applied to mental illness, it tends to be used for a wide variety of presenting problems. It is perhaps most effective in treating behavioral disorders and disorders of impulse control, such as excessive drinking, obesity, or sexual problems. Behavioral approaches may be quite useful in treatment of anxiety and have occasionally been helpful in the management of more severe mental disorders such as.

1. The link between behaviors and results are not obvious: Some times the Relationship between behaviors and the desired out comes is not clear. For example: A Salesperson may not be able to close a deal because of downturn in the country.

2. Outcomes occur in the distant future: Sometimes the desired result will not be seen for months or even years. For example: NASA.

3. Poor results are due to causes beyond the performer’s control: Sometimes the results of an employee’s performance are beyond the employee’s control. For example: consider a situation involving two assembly line workers; one of them working the day shift and the other the night shift.

Results-oriented approach

The Framework Partnership Agreement aims at establishing a long-term co-operation mechanism between the Parties, in order to ensure that humanitarian aid is delivered to its beneficiaries in the most appropriate, rapid, efficient and effective manner.

One of the main objectives of the FPA is to optimize the implementation and the results of the humanitarian aid actions financed by the Commission and executed by the Humanitarian Organization.

The Actions shall be implemented in accordance with the principles of economy, efficiency and effectiveness. Specific, measurable, achievable, relevant and timed objectives shall be set out for all Actions. Performance indicators shall monitor the achievement of those objectives. This would involve the further development of analytical tools on impact (outcome) of humanitarian interventions.

The consequences of the results oriented approach are:

  • Shifting of focus from the financing of inputs to the financing of realistic results.
  • Results based reporting.
  • Increased attention to Monitoring & Evaluation.

The Result approach is most appropriate under the following circumstances:

1. Workers are skilled in the needed behaviors

2. Behaviors and results are obviously related.

3. Results show consistent improvement over time.

4. There are many ways to do the job right.


Measuring result and behavior

One of the most critical aspects of HRM is evaluating HRM methods and measuring their results. Even the most carefully planned and executed HRM programs are meaningless without some way to judge their effectiveness and confirm their credibility. The evaluation of HRM methods and programs should include both internal and external assessments. Internal evaluations focus on the costs versus the benefits of HRM methods, whereas external evaluations focus on the overall benefits of HRM methods in achieving company goals. Larger human resource departments often use detailed, advanced data gathering and statistical analysis techniques to test the success of their initiatives. The results can then be used to adjust HRM programs or even to make organizational changes.

The authors of Human Resources Management posit four factors, the “four Cs,” that should be used to determine whether or not an HRM department or individual program is succeeding: commitment, competence, cost-effectiveness, and congruence. In testing commitment, the HRM manager asks to what extent do policies enhance the commitment of people to the organization? Commitment is necessary to cultivate loyalty, improve performance, and optimize cooperation among individuals and groups.

Competence refers to the extent to which HRM policies attract, keep, and develop employees: Do HRM policies result in the right skills needed by the organization being available at the proper time and in the necessary quantity? Likewise, cost-effectiveness, the third factor, measures the fiscal proficiency of given policies in terms of wages, benefits, absenteeism, turnover, and labor/management disputes. Finally, analysis of congruence helps to determine how HRM policies create and maintain cooperation between different groups within and outside the organization, including different departments, employees and their families, and managers and subordinates.

In addition to advanced data gathering and analysis techniques, several simple observations can be made that provide insight into the general effectiveness of a company’s human resources. For example, the ratio of managerial costs to worker costs indicates the efficiency of an organization’s labor force. In general, lower managerial costs indicate a more empowered and effective workforce. Revenues and costs per employee, when compared to related industry norms, can provide insight into HRM effectiveness.

Furthermore, the average speed at which job vacancies are filled is an indicator of whether or not the organization has acquired the necessary talents and competencies. Other measures of HRM success include employee complaint and customer satisfaction statistics, health insurance and workers’ compensation claims, and independent quality ratings. In addition, the number of significant innovations made each year, such as manufacturing or product breakthroughs, suggests HRM’s success at fostering an environment that rewards new ideas and is amenable to change.

Besides evaluating these internal aspects of HRM programs, companies also must assess the effectiveness of HRM programs by their impact on overall business success. In other words, companies must link their evaluation of HRM methods with company performance to determine whether these methods are helping their business by increasing quality, reducing costs, expanding market share, and so forth. Ultimately, companies must make sure that they have the right amount of properly skilled employees performing tasks necessary for the attainment of company goals and those greater revenues and profits result from HRM efforts to increase the workforce and improve worker training and motivation.

Accountability of Human Resource Management:

The meaning of Accountability “The state of being accountable; liability to be called on to render an account; accountableness”. According to me the meaning of accountability is very simple “being responsible” I hope it’s sufficient to understand what it is, but does it really mean anything in real environment as we talk about accountability of human resource management which simply means responsibility of human resource management.

What is the accountability of Human Resource Management in the case of struggling Satyam Inc in which approximately 51000 employee are in dilemma regarding companies survival.

There is a need for evaluation at the human resource function, and measuring its bottom-line contribution, which helps to find out whether expectation are turning into reality or not, that is where understanding human resource as a path to remain contained from exposure towards attrition and turnover problems which is pinching companies very hard.

Whether the problem is at planning level or at execution level? There is a requirement of results-based approach to human resources that keeps an eye on the bottom line, Based on actual experiences, accepted practices.

‘Accountability in Human Resource Management’ develops a results-based approach to human resources that keeps an eye on the bottom line. Benchmarking will help in comparing the success against other organizations.

The Public Service Employment Act (PSEA) provides an opportunity for the federal public service appointment system to become more flexible and efficient while respecting legislated values. The system is to be based on values, be less rules-driven and provide greater scope for delegated organizations to customize their appointment processes to meet their respective current and future human resources (HR) requirements.

While providing more flexibility, the legislation also requires that those delegated to make appointment decisions use their authority within a framework that ensures that they are accountable to the Public Service Commission (PSC) for its proper use. The PSC, in turn, is accountable to Parliament.


The Staffing Management Accountability Framework (SMAF) sets out key areas for a well-managed appointment system that achieves progress in making the staffing process more flexible and efficient, and strengthening respect for the appointment values involved.

The SMAF and the Departmental Staffing Accountability Reports (DSARs) used to report against it, along with other mechanisms, enable the PSC to review and evaluate staffing performance and to provide feedback to delegated public service organizations. The SMAF and these oversight mechanisms also enable the PSC to report to Parliament on the areas of the appointment system that are more at risk, while providing an overview of the health of the appointment system.

The SMAF should also be used by deputy heads to review how they manage their staffing systems and to make adjustments, as required.


The PSEA provides the PSC with the authority to establish policy on the manner of making and revoking appointments and taking corrective action. The PSC has developed a broad appointment policy that is binding for deputy heads in exercising their authorities under the PSEA. The SMAF and DSARs, together with other PSC oversight mechanisms such as monitoring and audit, are used to determine whether deputy heads are exercising their authorities in conformity with legislative requirements, the PSC’s appointment policies and the appointment values of the PSEA.

The PSC provides guidance to delegated public service organizations that are required to implement and report on the SMAF. The PSC also provides feedback to organizations so they can take action to improve their staffing systems and, ultimately, protect the integrity of the appointment system.

Deputy heads are expected to put in place their own management frameworks, including elements of the SMAF, and to monitor and adjust their organizational staffing performance to meet their staffing objectives. They are to manage risk factors to ensure good management and compliance with the PSC’s policy and delegation requirements, the appointment values and other statutes.

By accepting the delegated authorities, deputy heads commit to contributing to the achievement of an inclusive public service that is based on merit and non-partisanship; that reflects the diversity and the linguistic duality of the Canadian population; and that is representative of the people it serves and whose members are drawn from across the country.

Approach: elements of the Staffing Management Accountability Framework

The SMAF provides expectations for deputy heads related to the 11 ‘elements,’ also called ‘key change areas,’ outlined below.

These elements cover both the intended results and the infrastructure and practices to be put in place to support staffing in conformity with requirements based on the PSC’s policy and delegation instrument, with the appointment values and with other statutes. Further detail on expectations is provided by means of indicators under each element. Taken together, these elements and indicators represent a series of “key success factors” and expected “improved outcomes” where performance and progress are monitored, and for which areas for improvement will be identified, where applicable.

Among the main expectations regarding the PSEA’s intended effects is that, as a result of progress on key success factors outlined in Part I which follows, improvements should occur in the results elements detailed in Part II, dealing with short-term staffing outcomes.

Specifically, it is reasonable to expect improvements in the flexibility and efficiency of the staffing processes among organizations, resulting from the delegation arrangements set in place.

Similarly, it is expected that improvements in effectiveness will occur in terms of adherence to appointment values; the core values are merit and non-partisanship and the guiding values are representativeness, access, fairness and transparency. These improvements are expected as a result of the change-management initiatives that accompany delegation, and from responding to areas identified for improvement by organizations or the PSC. In this context, the progress identified as part of short-term annual improvements in staffing outcomes is a sound predictor of longer-term impacts accompanying PSEA implementation. To a considerable extent, the longer-term impact of the PSEA is essentially the cumulative result of net short-term improvements in performance and outcomes.

In the following sections, descriptions, expectations and indicators are provided for the SMAF elements. Deputy heads are required to report on the indicators in the manner prescribed by the PSC. The PSC may make modifications to the SMAF indicators; these would be based on a risk analysis and reflect either a systemic issue or a particular organizational challenge.


Element 1 – Delegation of staffing to deputy heads

In the spirit of the preamble to the Public Service Employment Act, the PSC has maximized the delegation of appointment and appointment-related authorities to deputy heads of federal government organizations. Deputy heads are encouraged to sub-delegate these authorities within their organization.

This framework will guide deputy heads in building their own staffing systems adapted to their needs and in ensuring that they respect legislative requirements and core values.

Deputy heads are expected to implement the necessary infrastructure and practices that are conducive to the effective management of delegated authorities in accordance with the PSC appointment framework, including continuous learning and change.

Deputy heads have the flexibility to establish appointment processes and programs tailored to their own organizational needs. When establishing these processes and programs, they are expected to establish policies and procedures that respect the values of fairness, access, transparency and representativeness, and ensure that statutory and central agency requirements are respected, even when service providers are used.

Deputy heads are expected to establish communication practices that ensure transparency, clarity and ready access to staffing information in their own organizations.

Element 2 – Planning for staffing and monitoring of results

The PSEA establishes a framework in which appointment decisions allow for consideration of both the qualifications of individuals and the current and future needs of the organization. Planning for staffing is a process that establishes the basis for the qualifications and current and future needs.

Planning for staffing also identifies staffing performance expectations, as approved by senior management, from an organization-wide perspective. This is achieved through the development of organizational staffing strategies that cover and support staffing priorities. Each organizational staffing strategy needs to set out measurable expected results and performance indicators so that the organization is able to determine whether the strategy has been achieved.

Staffing strategies need to pertain to the appointments or staffing processes, and must set out the staffing actions that the organization intends to take to implement the staffing priorities of senior management. Strategies are based on workforce analysis and may also be based on an analysis of staffing trends and patterns.

Deputy heads are also expected to assess the variance between planned staffing results and actual results achieved, and to correct staffing-related deficiencies identified from this assessment.

Element 3 – Organizational human resources support

With further staffing authorities delegated to deputy heads of organizations, there is now more flexibility to develop the types of processes that allow organizations to better meet their strategic objectives and carry out their staffing plans. Sufficient and appropriate resources are required to support efficient and effective staffing results.

Deputy heads must ensure that their organizations have access to a reasonable number of HR advisors with appropriate staffing expertise to support sub-delegated managers and have effective information and supporting systems.

Element 4 – Organizational accountability for results

The SMAF is one of a number of mechanisms, including audits, supporting the Accountability Policy developed by the PSC to hold deputy heads accountable for the exercise of their delegated authorities. In accordance with PSC policy and the SMAF, deputy heads must report on their performance in exercising their delegated authority through the DSAR.

Deputy heads are expected to comply with the PSC’s reporting requirements, to collaborate with other PSC oversight requirements, including but not limited to audits, and to make improvements where deficiencies are identified in the DSAR feedback.

Element 5 – Flexibility and efficiency

The preamble to the PSEA recommends that delegation of staffing authority be “to as low a level as possible within the public service” so that public service managers have the flexibility “to staff, manage and lead their personnel to achieve results for Canadians.” In contrast to the old rules-based staffing system — that tended to emphasize process — the PSEA calls for an approach that relies more on values and results. For example, the preamble to the PSEA emphasizes the importance of ensuring excellence, integrity and fair and transparent employment practices in federal government staffing. This means that delegated managers must exercise their staffing authority in a way that ensures the integrity of the staffing system and respects the values and principles contained in the Act.

As part of their decision-making, managers should take into account the need for:

  • Flexibility – to ensure that resourcing approaches are adapted to the needs of the organization; and
  • Affordability and efficiency – to ensure that staffing approaches provide good value for money and are delivered in a manner that is simple, timely and effective.

(b) Intended results – Effectiveness and adherence to staffing values

Element 6 – Merit

  • Every person appointed meets the essential qualifications, including official language proficiency, established by the deputy head for the work to be done.
  • The manager may take into consideration any current or future asset qualifications, operational requirements and organizational needs also identified by the deputy head.

Element 7 – Non-partisanship

  • Appointments and promotions to and within the public service are done objectively and are free from political influence.

Element 8 – Representativeness

  • Appointment processes are conducted without bias and do not create systemic barriers, to help achieve a public service that reflects the Canadian population it serves.

Element 9 – Access

  • Persons from across the country have a reasonable opportunity to apply, and to do so in the official language(s) of their choice, and be considered for public service employment.

Element 10 – Fairness

  • Decisions are made objectively and are free from political influence or personal favouritism; policies and practices reflect the just treatment of persons.
  • Persons have the right to be assessed in the official language(s) of their choice in an appointment process.

Element 11 – Transparency

  • Information about staffing strategies, decisions, policies and practices is communicated in an open and timely manner.

Performance appraisal forms:

Objectives of Performance Appraisal FORMS:

Performance Appraisal form can be done with following objectives in mind:

  1. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.
  2. To identify the strengths and weaknesses of employees to place right men on right job.
  3. To maintain and assess the potential present in a person for further growth and development.
  4. To provide a feedback to employees regarding their performance and related status.
  5. To provide a feedback to employees regarding their performance and related status.
  6. It serves as a basis for influencing working habits of the employees.
  7. To review and retain the promotional and other training programmes.

The major objectives of performance Appraisal form are discussed below:

  • To enable the employees towards achievement of superior standards of work performance.
  • To help the employees in identifying the knowledge and skills required for performing the job efficiently as this would drive their focus towards performing the right task in the right way.
  • Boosting the performance of the employees by encouraging employee empowerment, motivation and implementation of an effective reward mechanism.
  • Promoting a two way system of communication between the supervisors and the employees for clarifying expectations about the roles and accountabilities, communicating the functional and organizational goals, providing a regular and a transparent feedback for improving employee performance and continuous coaching.
  • Identifying the barriers to effective performance and resolving those barriers through constant monitoring, coaching and development interventions.
  • Creating a basis for several administrative decisions strategic planning, succession planning, promotions and performance based payment.
  • Promoting personal growth and advancement in the career of the employees by helping them in acquiring the desired knowledge and skills.

Some of the key concerns of a performance management system in an organization are:

  • Concerned with the output (the results achieved), outcomes, processes required for reaching the results and also the inputs (knowledge, skills and attitudes).
  • Concerned with measurement of results and review of progress in the achievement of set targets.
  • Concerned with defining business plans in advance for shaping a successful future.
  • Striving for continuous improvement and continuous development by creating a learning culture and an open system.
  • Concerned with establishing a culture of trust and mutual understanding that fosters free flow of communication at all levels in matters such as clarification of expectations and sharing of information on the core values of an organization which binds the team together.
  • Concerned with the provision of procedural fairness and transparency in the process of decision making.

The performance management approach has become an indispensable tool in the hands of the corporate as it ensures that the people uphold the corporate values and tread in the path of accomplishment of the ultimate corporate vision and mission. It is a forward looking process as it involves both the supervisor and also the employee in a process of joint planning and goal setting in the beginning of the year.

Advantages of Performance Appraisal forms

It is said that performance appraisal forms is an investment for the company which can be justified by following advantages:

  1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.
  2. Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance. Compensation packages which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority.
  3. Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programmes. It helps to analyse strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programmes.
  4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard.
  5. Communication: For an organization, effective communication between employees and employers is very important. Through performance appraisal, communication can be sought for in the following ways:
    1. Through performance appraisal, the employers can understand and accept skills of subordinates.
    2. The subordinates can also understand and create a trust and confidence in superiors.
    3. It also helps in maintaining cordial and congenial labour management relationship.
    4. It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

  1. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future. (3)

    performance Appraisal Meetings

1.    The Initial Performance Appraisal Meeting

  1. The supervisor and employee meet to discuss the employee’s performance during the appraisal period and to discuss potential goals for the upcoming appraisal period.
  2. Schedule the performance meeting in advance, allowing sufficient time to prepare for the meeting. Select a time free of stress for both participants. If possible, hold the meeting in a room that is neutral ground, not in the supervisor’s office where interruptions could occur.

2. Two-way Discussion

 of the employee’s performance during the appraisal period is one of the most critical parts of the process. Allow adequate time for this meeting. Recognize that the review process is a high priority and is intended to be a constructive and cooperative process.  Its primary emphasis is to foster development and growth. To help create such a tone and setting, consider these suggestions:

  • Ask questions and listen. Be open-minded to the information and opinions presented.
  • Discuss strengths. This will sustain and reinforce high performance.
  • Make suggestions constructive. When you point out a need for growth or change, offer suggestions for improvement.
  • Consider each other’s point of view. Remember each person will respond differently in a performance meeting.
  • Keep comments job-centered. Avoid discussing personality unless it adversely affects job performance or your department’s operation.
  • Schedule a follow-up meeting to discuss the final Employee Appraisal form.

The Final Performance Appraisal Meeting

After the initial performance meeting, the supervisor/department head constructs their Employee Appraisal form and determines an overall performance rating for each employee. The supervisor/department head then meets with the Vice President to discuss the overall performance of each employee and the completed appraisal forms.   Once the Vice President is satisfied that the appraisal is complete and accurate, the form(s) will be signed.

The supervisor then meets with the employee to discuss the final Employee Appraisal form and overall performance rating, finalizes the goals and professional development areas for the upcoming year, and has the employee sign and add any comments. Any comments written by the employee will be initialed by the supervisor and the department head. The employee then receives a copy of the final version.  The employee also has the opportunity at this time to attach a copy of their Self-Appraisal form, if they wish, and/or any other materials that support their performance during the appraisal period. All signed forms will be returned to the Vice President/Division Head, who in turn will forward them to the Human Resources office. (4)

Who Should Assess Performance?

Now that we’ve learned the why, what, and how of the performance appraisal process, the next thing we need to discuss is options for the rater, or evaluator. There are a number of different options concerning who should evaluate the individual employee, and the deci­sion needs to be based on a series of factors. Let’s take a look at our options for who should evaluate an employee.


When we ask who should evaluate employees, the most common response is their immedi­ate supervisor. Why would the supervisor be the best person to evaluate an employee? Well, the supervisor is supposed to know what the employee should be doing, right? Certainly, supervisors are frequently one of the best and most commonly used options to choose as evaluators for the employees under their control. However, this is not always the case due to problems with supervisor performance assessments.

Problems with supervisor evaluations. What if the supervisor doesn’t see the employee very frequently? This may not be all that uncommon in a modern organization. Many times today, supervisors may be in a different building or even a different city than the individuals they supervise. Virtual teams, Internet-linked offices, telecommuting, and other factors cause supervisors to not be in constant touch with their employees, unlike the situation 20 or 30 years ago.

There are other problems as well. What if there’s a personality conflict? Supervisors are human, just like their employees, and may just not relate well to some of their employees. This may cause a personal bias for, or against, certain employees that may invalidate the appraisal process if it’s significant enough.

What if the supervisor doesn’t know what employees are supposed to be doing in their jobs? Aren’t supervisors always supposed to know every job for which they are responsible? Again, 30 years ago this may have been true. However, in today’s work environment, with the amount of information necessary to do the complex tasks that organizations must accomplish in order to compete, nobody can know every job. There’s just too much information for any one individual to learn. So jobs have been segmented down into smaller and smaller areas, and the supervisor may not know each of those jobs in great detail. So there are certainly problems that can occur in the case of a supervisor being responsible for a subordinate employee’s evalu­ation process. This being the case, what other options do we have?

Avoiding supervisor review problems

 A simple answer to overcome these problems is to have others, in addition to the supervisor, assess performance. Also, multiple measures can make a performance assessment more accurate. For example, using other evaluators can help overcome personal bias and provide information that supervisors don’t always know about.


As discussed, the supervisor is not always knowledgeable enough to make a valid assess­ment of employee performance. Another possible option is to use coworkers or peers of the individual employee as appraisers. When would it be valuable to use peer evaluations in an organization? If the supervisor is absent or has infrequent contact with the employ­ees, but all employees have multiple coworkers that they interact with on a frequent basis, peer evaluations may be valuable. Peers or coworkers also often know the job of the indi­vidual employee better than the supervisor does, and they are more directly affected by the employee’s actions, either positive or negative. In addition, peers can evaluate the ability of the individual to interact with others successfully in a group or team setting. This may be very difficult for supervisors to see unless they are intimately involved with the group.

Problems with peer reviews

There are certainly issues that can come up in peer evalu­ations that can cause the process to become less objective. In fact, research evidence regard­ing the validity of peer evaluations is really unclear.33 Personality conflicts and personal biases can affect how individual employees rate their peers. Individuals within a group or team may just have significantly different personality types, and these differences can cause friction within the work group that may spill over when it comes time to evaluate those with whom they are in conflict. Additionally, no matter how much we try and protect against it, personal biases can affect working relationships and may show up in peer evaluations.

Avoiding peer review problems

Because we know that these problems can occur within a peer evaluation, the organization can take the issues into account and adjust rating values as necessary. For example, assume you are the manager of a work group of six people who in your opinion work very well together and provide a quality work product, and you review a set of peer evaluations from the work group. In your review you notice that two of the members of the group gave each other significantly lower-than-average grades—one of the two is a young male, and the other is an older female. However, the other four members of the group gave both of them good marks for their contributions to the group.

This quite likely is a situation where a personality conflict has occurred between the two members, which caused them to lower each other’s grades. Knowing that the other four members of the group evaluated these two individuals as valued members of the team, you may want to adjust the individual ratings from the two individuals to more closely match the overall evaluations from the team, noting that it appears that a personality conflict may have lowered their individual grades of each other. Even with the potential for personal­ity conflicts and bias, peer evaluations can give us good insight into the inner workings of a group or team when the supervisor has infrequent contact with the team. In Self- Assessment and Skill Builder 8-1, you will do a performance assessment of your peers.


Our next available option is the subordinates of an individual supervisor in the firm. We would typically only use subordinate evaluators for manager-level employees. However, who within the firm knows, and suffers the consequences of, the actions of supervisors more than the people who work for them? Subordinate evaluations can give us good insight into the managerial practices and potential missteps of people who control other employ­ees in our organization. As a result, subordinate evaluations may give us valuable informa­tion that we would be unable to find out using any other means.


Problems with subordinate reviews

 Can subordinate evaluations cause a problem within the department or work group? Is the potential for bias, especially from subordi­nates who have been disciplined by the supervisor, significant in this type of evaluation? Of course there is a potential for bias. Obviously, the subordinates may try to get back at their supervisor for giving them tasks that they did not want to perform, or for disciplining them for failure in their jobs.

There may be a personality conflict, or some subordinates certainly may be biased against their supervisor or manager. So there are certainly negative aspects to subordinate evaluations. On the other end of the scale, the subordinates may inflate the capabilities of the manager, at least partly because of a lack of understanding of all the tasks and duties required of the manager. In fact, in a recent survey, about two thirds of employees rated their managers higher than the managers’ self-ratings.

Avoiding subordinate review problems

 In all of these problem areas, if we know that there is a potential problem, we can most likely guard against it. In many cases, as we go through a group of subordinate evaluations, we will see one or two outliers providing either very high or very low marks for the supervisor. In such a case we should probably throw those outliers out of the calculation when determining overall marks for the supervisor. It’s honestly surprising how often these outliers are extremely easy to spot in a subordinate evaluation process.

Another significant issue in the case of subordinate evaluations is confidentiality. Sub­ordinate evaluations must be confidential in nature, or it is unlikely that the subordinates will provide an honest evaluation of their supervisor. Why is this case? Obviously, if the evaluation is not confidential, the supervisor can and may take retribution on subordinates who provide unflattering evaluations. So, if the evaluation is not anonymous, many of the subordinates will likely inflate the capabilities of the supervisor, which minimizes the value of the evaluation process itself. So, even though subordinate evaluations have the potential for biases and other problems, we can help to overcome these problems, and they can pro­vide us with valuable information about the supervisor’s capabilities.


Self-assessment is also an option in the performance appraisal process, or is it? Virtually all employees do a self-assessment whether they are actually formally asked to do so as part of the assessment or not. It is required with MBO. Even when not asked to do a self-assessment, employees will still walk into the review discussion with some informal self-assessment that they compare to the supervisor’s rating. But are self-evaluations valuable, or will the employ­ees overestimate their individual capabilities and tell us that they’re perfect? (As you know, every chapter of this book has one or more self-assessments, and the one for this chapter is Self-Assessment and Skill Builder 8-1; it is at the end of the chapter. You will assess your per­formance on a group project. If you want to, you can do the self-assessment now.)

Problems with self-assessments

Most of the research evidence shows that self-assessments tend to overestimate the individual’s ability to do a job.35 However; some of the research says that employees either underestimate or accurately estimate their job perfor­mance over time. A significant portion of the evidence seems to show that individuals with lower levels of knowledge and skills within their field tend to inflate their self-assessment of their abilities.36 conversely, as individuals become more knowledgeable and more skilled, the evidence tends to show that they will either accurately estimate or even underestimate their capabilities in their jobs.

Avoiding self-assessment problems

 Based on the fact that most of the evidence shows that employees overestimate their ability to do their job, is this a valid performance meas­ure? Here again, even though the measure may have validity concerns, if we know that self-evaluations tend to be skewed, we can most likely adjust for this factor. Information from individuals concerning their perception of their skill set is extremely valu­able in a number of management processes, including plans for training and development opportunities, providing work assignments, and counseling and disciplinary measures, among others. A big step in overcoming self-assessment problems, as well as other assessment problems, is the Blanchard test—do the employees understand why they are assessed at a spe­cific level (evaluation) and what it takes to get a higher rating (development)?


We may also want to ask customers to evaluate individuals within the company. We use the word customers in a broad sense to include people outside the organization, including customers for our products and services and suppliers to the firm. Customers can also be internal including people in other departments of the firm—for example, the print shop that makes copies for other departments or the mail room that receives and delivers com­munications and products to the rest of the firm.

When and why would we want to use customers in the evaluation process? We may want to use customers as evaluators when the individual being evaluated has frequent con­tact with organizational customers, either internal or external to the firm. If employees interact routinely with internal or external customers, we need to know how the customers feel about their interactions with the employees because obviously external customers are the ones who ultimately pay the bills.

It does not matter what else we do successfully if our customers are uncomfortable with their interactions with our employees. If external customers are upset about their interac­tions with our employees, they have the ability to go elsewhere with their business. Even internal customers can create significant problems within the firm due to conflict between departments or divisions. So we want to ask customers to evaluate the individuals with whom they come into contact.

Problems with customer assessments

What do you think the major problem is with customer-based evaluations? One problem is that customer assessments commonly use sim­ple rating scales, which we discussed as being very subjective. Also, customers are usually not trained to do an accurate assessment. So bias is a problem. For these and other reasons, the popular opinion is that customer evaluations are almost always skewed to the negative. How­ever, research shows that this is not necessarily the case.41 In some situations, customer evalua­tions actually exceed evaluations of the individual that are internal to the firm or department.


Avoiding customer assessment problems

Regardless of whether or not customers will tell us when we’re doing an exceptional or acceptable job, customer evaluations pro­vide us with valuable information concerning our employees who have direct customer contact. If this is the case, can we adjust the evaluation process knowing that customer eval­uations are frequently skewed either positively or negatively? Obviously, we can. One of the basic methods of adjusting the customer evaluation process is to compare the individuals being evaluated and identify the ratios of negative and positive comments to allow us to identify more successful and less successful employees. Although this is an imperfect meas­ure, it still provides value to the firm in the fact that customers’ perception is critical to our relationship with them. So, we need to measure this relationship.

360º Evaluation

As a final option, we can do “all of the above.” The 360° evaluation, in effect, analyzes individuals’ performance from all sides—from their supervisor’s viewpoint, from their sub­ordinates’ viewpoint, from customers’ viewpoint (if applicable), from their peers’ viewpoint, and using their own self-evaluation. Obviously, the 360° evaluation would give us the most accurate, best possible analysis of individuals and their performance within the company. DuPont developed 360° reviews back in 1973, but they are still popular today.42 With the trend of structuring work in teams, peer evaluations are now being used regularly.43 Those who fill out the appraisal form usually do so confidentially. The feedback from all these people is used to evaluate and develop the employee.

Problems with 360º evaluations

 If they are the best, then why don’t we always use 360° evaluations? The simple answer is “time and money.” It takes a significant amount of time for a group of individuals to evaluate one person if we use a 360° format. By using up so much organizational time, it obviously also costs us a significant amount of money. If we multiply the numbers based on the time required to evaluate one individual to count every­one in the organization, the costs can quickly become massive.


Avoiding problems with 360º degree evaluations

Unfortunately, there really is no simple way to avoid such problems, besides what is commonly done—not using 360° eval­uations. When used, the 360° evaluation format tends to be most valuable if it is used for purposes of individual development, rather than for making administrative evaluative decisions. A good 360° feedback system can provide specific suggestions about how to improve individual competencies.45 It can also go a long way toward minimizing some of the most common problems with the performance appraisal process, which we will review next.


Who Do We Choose?

Now that we know our options for who should conduct an evaluation of each employee, which option should we use? Again, we need to remember that each of the options costs us money because it takes time for the individual who must perform the appraisal. So, we need to determine which option or options to use. We can use any of these methods combined with any other, all the way up to the point of the 360° evaluation. However, we only want to use a 360° evaluation when it’s worth it. If it’s not necessary, then it doesn’t make a lot of sense due to the cost of this method.

For instance, is there any need to do a 360° evaluation of janitorial or housekeeping staff? Does this make sense? Obviously, in this case we probably don’t need to do this type of evalua­tion. In most cases, with low-level staff members, a supervisor’s evaluation is sufficient. We also make this statement because the evaluation is often more than just a supervisor’s biased opinion. Even though only the supervisor does the formal assessment, the supervisor often does get infor­mal feedback regarding performance from customers and peers during conversations. Custom­ers will often complain to the supervisor if the service is not satisfactory, and peers will complain about a fellow employee who is not meeting standards for some reason. The supervisor’s critical incident file is often written based on information received from peers and customers. What about the case of an outside salesperson? In this situation, the results tend to speak for themselves. Sales numbers are available to the salesperson and manager. Where the supervisor rarely sees the individual but the customer interacts with our salesperson on a routine basis, we can ask the customer to do an evaluation of the salesperson as well as asking the salesperson for a self-appraisal. With the sales figures, a self-assessment, and cus­tomer feedback, we can develop a plan to increase future performance.

Finally, if we are evaluating the marketing manager for the firm, we may want to do a 360° evaluation because this individual would affect all of the groups—subordinates, cus­tomers, peers, the organization, and himself or herself. So, we evaluate the specific situation and use the number of methods necessary to get an accurate assessment of the individual.

Once again, we need to do a cost-benefit analysis to determine when the benefits of increas­ing performance outweigh the cost to give us a return on our investment. In essence, we attempt to maximize performance while minimizing the total cost of the appraisal process.

Performance Appraisal Problems to Avoid

Common Problems with the Performance Appraisal Process


Bias is simply a personality-based tendency, either toward or against something. In the case of performance assessment, bias is toward or against an individual employee. All human beings have biases, but supervisors especially cannot afford to allow their biases to enter into their evaluation of subordinates in the firm. This is very easy to say, but very diffi­cult to do. Biases make the evaluation process subjective rather than objective, and certainly provide the opportunity for a lack of consistency in effect on different groups of employees. So to overcome the bias problem, we need to be objective and not let our feelings of liking or disliking the individual influence our assessment.


 Stereotyping is mentally classifying a person into an affinity group, and then identifying the person as having the same assumed characteristics as the group. Though stereotyping is almost always assumed to be negative, there are many incidents of positive stereotypes. However, regardless of whether the stereotype is positive or negative, making bership in a group, rather than explicitly identifying the characteristics of the individuals, creates the potential for significant error in evaluations. So we can avoid stereotyping by getting to know each employee as an individual and objectively evaluating individual employees based on their actual performance.


Halo error

 This error occurs when the evaluator has a generally positive or negative (nega­tive halo error is sometimes called “horns error”) impression of an individual, and the evaluator then artificially extends that general impression to many individual categories of performance to create an overall evaluation of the individual that is either positive or nega­tive.46 In other words, if employees are judged by their supervisor to be generally “good” employees, and the supervisor then evaluates each of the areas of their performance as good, regardless of any behaviors or results to the contrary, the supervisor is guilty of halo error. We can avoid halo error by remembering that employees are often strong in some areas and weaker in others, and we need to objectively evaluate individual employees based on their actual performance for each and every item of assessment.

Distributional errors

These errors occur in three forms: severity or strictness, central ten­dency, and leniency. They are based on a standard normal distribution, or the bell curve that we are all so familiar with. In severity or strictness error, the rater evaluates everyone, or nearly everyone, as below average. Central tendency error occurs when raters evaluate everyone under their control as average—nobody is either really good or really bad. Finally, leniency error occurs when the rater evaluates all others as above average. Leniency error, therefore, is basically a form of grade inflation. We can avoid distributional errors by giving a range of evaluations. The distri­bution is often based on the ranking method of evaluation and forced distribution.

Similarity error

This error occurs when raters evaluate subordinates that they consider more similar to themselves as better employees, and subordinates that they consider dif­ferent from themselves as poorer employees. We all have a tendency to feel more comfort­able with people who we feel are more similar to ourselves,47 and if we are not careful, we can allow this feeling of comfort with similar individuals to be reflected in the performance appraisal process. We can avoid similarity error by embracing diversity and objectively evaluating individual employees based on their actual performance, even if they are differ­ent from us and don’t do things the same way that we do.

Proximity error

This error states that similar marks may be given to items that are near (proximate to) each other on the performance appraisal form, regardless of differences in performance on those measures. We can avoid proximity error by objectively evaluating employees’ actual performance on each and every item on the assessment form.


Recency error

 This error occurs when raters use only the last few weeks or month of a rating period as evidence of their ratings of others. For instance, if a warehouse worker has been a strong performer for most of the appraisal period, but right before his annual evalu­ation he knocks over a stack of high-cost electronic equipment while driving a forklift, he may be rated poorly due to recency error. We can avoid the recency error by evaluating the employee based on the entire assessment period, commonly 6–12 months. Using the critical incidents method really helps our recall and assessment of the entire period more objectively.

Contrast error

 In contrast error, the rater compares and contrasts performance between two employees, rather than using absolute measures of performance to measure each employee. For example, the rater may contrast a good performer with an outstanding performer, and as a result of the significant contrast, the good performer may seem to be “below average.” This would be a contrast error. We can avoid contrast error by objectively evaluating individual employees based on their actual performance. We must use the rank­ing method correctly; first we assess each individual based on the items on the assessment form—then we rank the individuals based on their assessments.


Attribution error

 In simplified terms, attribution is a process where an individual assumes reasons or motivations (such as attitudes, values, or beliefs) for an observed behavior. So, attribution error in performance appraisal might occur when the rater observes an employee action—such as an argumentative answer to a question—and assumes that the individual has a negative attitude toward the job and is a poor performer. This may not be true, and in such a case the rater would be guilty of an attribution error. We need to avoid attribution error because it is based on our subjective conclusion. When in doubt, we shouldn’t assume we know why the employee did or didn’t do something. We should talk to employees to find out so that we can objectively evaluate employees based on their actual performance.

Avoiding Performance Appraisal Process Problems

As you can see above, there are a significant number of ways that performance appraisals can fail to provide an accurate assessment of the capabilities and the behaviors of individ­ual employees. Thus far we have only provided simple things we can do to overcome these problems as individuals. How can a firm avoid these problems on an organization-wide basis throughout the performance appraisal process?

Luckily, there are a number of fairly simple steps that we can take within the organiza­tion to minimize the negative issues that occur in the performance appraisal process. All we have to do is look at the problems noted, and we can fairly quickly come up with some pos­sible solutions to at least the majority of those problems using the same methods. Let’s dis­cuss how the firm can limit the potential for the appraisal process to go astray by developing accurate performance measures, training evaluators, and using multiple raters.


 Implementing a Performance Management System

 Design a communication plan that answers the key questions, such as: ‘What is performance                  Management?’, ‘Where does performance management fit in the organization’s Strategy?’, ‘How does everyone benefit from the system?’, ‘How does the performance management system work?’, ‘What are employees’ and supervisors’ key roles and responsibilities in implementing the system?’ and ‘How is performance management related to other key organizational initiatives?’;

Design a communication plan to include features aimed at reducing the effect of

Cognitive biases on how the performance management system is perceived and help

Minimize the impact of intentional rating errors;

We should be aware of cognitive biases affecting how people take in, use and recall information, Including selective exposure, selective perception and selective retention;

 Understand that setting up an appeals process helps gain support for the performance

Management system; Design an appeals process that operates at two levels: Level 1, which involves the HR

Department in the role of mediator, and Level 2, which involves a panel of managers and              Peers and, possibly, a senior level manager in the role of arbitrator and final decision maker; Describe unintentional and intentional types of error that raters are likely to make in Evaluating performance; Implement training programs such as Rater Error, Frame of Reference and Behavior Observation, which will minimize the impact of unintentional rating errors; Implement a self-leadership training program that will allow supervisors to increase confidence in their skills to manage the performance management process and, consequently, allow them to minimize rating errors.

Then, understand the importance of conducting a pilot test before the performance system is Implemented organization wide; Conduct a pilot test of the performance management system using a selected group of Employees and managers from the organization.

Once the performance management system is in place, collect various measurements that will provide information regarding the system’s effectiveness, the extent to which it is working the way it should, and whether it is producing the expected results.

Modules 4 and 5 described operational details on how to measure performance. Module 6 described operational details about appraisal forms and the process of providing performance ratings. This module, the last one in Part two, continues to address operational issues in implementing a performance management system. Specifically, it addresses the steps needed before the system is put in place, such as setting good communication and appeals   procedures that will gain system buy-in, implementing training programs to minimize rating errors, and pilot testing the system. Finally, the module describes how to monitor the system once it is in place to make sure it is working properly.


1 Preparation: Communication, Appeals Process, Training Programs, and Pilot Testing

2 Communication Plan

3 Appeals Process

4 Training Programs for the Acquisition of Required Skills

5 Pilots Testing

6 Ongoing Monitoring and Evaluation

There are some important things that need to be done before the performance management System is implemented. These include a communication plan and an appeal Process to help gain system buy-in, training programs for raters to help minimize errors in performance ratings, and pilot testing the system to allow for revisions and changes before the system is actually implemented. Careful attention to these pre-system Implementation steps will help improve the success of the system. The main goal of the communication plan is to gain support for the system. A good Communication plan addresses the following issues: What performance management is, its general goals, and how performance management Systems has been implemented in other organizations;

 How performance management fits with the organizational strategy; Tangible benefits of the performance management system for all parties involved; How the system works, including the various steps in the process; The roles and responsibilities of each organizational member; How performance management relates to other initiatives and programs such as Training, promotion, and compensation. Including detailed, convincing and clear information on each of the above issues is likely to help increase support for the system.

People have biases in how they take in and process information. Thus, even though there may be a good communication plan in place, these biases may distort the information presented. Biases to take into account are perceptive exposure, selective perception, and selective retention. Selective exposure is a tendency to expose our minds only to ideas with which we already agree. Selective perception is a tendency to perceive a piece of information as meaning what we would like it to mean even though the information, as intended by the communicator, may mean the exact opposite. Selective retention is a tendency to remember only those pieces of information with which we already agree.

The negative effects of cognitive biases can be minimized by involving employees in system design, considering employees’ needs in designing and implementing the system, delivering the communication plan before negative attitudes and rumors start circulating, putting information on the system in writing, providing facts and conclusions and not just facts, using multiple channels of communication to present information on the system, using credible and powerful communicators and repeating the information frequently. A good communication plan includes as many of these features as possible.

In addition to a communication plan, setting up an appeals process also helps gain system buy-in. This is because an appeals process allows employees to understand that, if there is a disagreement regarding performance ratings or any resulting decisions, such disagreements can be resolved in an amicable and non-retaliatory way.

The appeals process begins with an employee filing an appeal with the HR department, which serves as a mediator between the employee and her supervisor. This is a Level 1 appeal. If the appeal is not resolved, then an outside and unbiased arbitrator makes a final and binding resolution. This is a Level 2 appeal. The arbitrator for a Level 2 appeal is usually a panel including peers and managers.

In rating performance, raters may make intentional or unintentional errors. Intentional errors take place when raters believe it will be more beneficial to them to provide distorted as opposed to accurate ratings. For example, a supervisor may not want to give a low rating so as not to face a possible confrontation with an employee. Intentional errors include leniency (giving better scores than warranted), severity (giving worse scores than warranted), and central tendency (giving scores around the mid-point of the scales only). Motivation is the key to minimize intentional errors. In other words, we must demonstrate to the raters that the benefits of providing accurate ratings outweigh the benefits of intentionally distorting ratings, whether by inflation, deflation, or central tendency. This is done primarily through the communication plan, which addresses the ‘What’s in it for me?’ question, including the ‘What’s in it for me if I provide accurate ratings?’ question.

Unintentional errors are caused by the fact that observing, encoding, storing and retrieving performance information is a complex cognitive task. Unintentional errors include the following:

(a) Similar to me,

(b) Contrast,

(c) Halo,

(d) Primacy,

(e) Recency,

f) Negativity,

(h) First impression,

(i) Spillover, and

(j) Stereotype.

Unintentional errors can be minimized by implementing rater training programs.

Rater error training (RET)

is a type of program that exposes raters to the different errors and their causes. RET does not guarantee rating accuracy, but becoming aware about what types of error are likely to occur and the reasons for these errors is a very good first step in minimizing them.

Frame of reference (FOR) training

is a type of program that familiarizes raters with the various performance dimensions to be assessed. The goal is that raters will develop a common frame of reference in observing and evaluating performance. This type of training is most appropriate when performance measurement focuses on behaviors.

Behavioral observation (BO) training

is a type of program that focuses on how raters observe, store, recall and use information about performance. For example, this type of program teaches raters how to use aids such as diaries to standardize performance observation. This type of training is most appropriate when performance measurement focuses on counting and recording how frequently certain behaviors and results take place.

Self-leadership (SL) training

is a type of program that aims at improving raters’ confidence in their ability to manage performance. SL training includes positive self-talk, mental imagery and positive beliefs and thought patterns.


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