Performance Appraisal

1. PERFORMANCE MANAGEMENT
(PERFORMANCE APPRAISAL)
NUR SHUHADA BINTI KHALIL
2013595069
Dilbert__Performance_Review_hd720.mp4

2. DEFINITONS OF PERFORMANCE APPRAISAL
Performance Appraisal (PA) has been synonymous with
performance review, performance evaluation, and other terms
and combinations of terms. (Konsrasuk,2011)
(Wiese & Buckley, 1998) employees in an organization can understand
and know their level of skills and knowledge and will know how to
utilize their capabilities and thus can make proper career decisions.
(Armstrong ,2006) stated that performance appraisal as an instrument
to understand how to make better use of the available technical skills
and knowledge, also how to meet future challenges and achieve
goals. He also explained that performance appraisal will help improve
the skills and capabilities of an individual and the
organization as a whole.

3. DEFINITONS OF PERFORMANCE APPRAISAL
Performance appraisal has been defined as the process of identifying,
evaluating and developing the work performance of employees
in the organization, so that the organizational goals and objectives are more
effectively achieved, while at the same time benefiting employees in terms of
recognition, receiving feedback, catering for work needs and offering
career guidance (Lansbury, 1988).
Performance appraisal is the formal process of observing and
evaluating an employee‟s performance (Erdogan, 2002).
According to Angelo S. Denisi and Robert D. Pritchard (2006) “Performance
appraisal” is a discrete, formal, organizationally sanctioned
event, usually not occurring more frequently than once or twice a year, which
has clearly stated performance dimensions and/or criteria that are used in the
evaluation process. Furthermore, it is an evaluation process, in that
quantitative scores are often assigned based on the judged level of the
employee‟s job performance on the dimensions or criteria used, and the scores
are shared with the employee being evaluated.

4. OBJECTIVES OF PERFORMANCE
APPRAISAL
(Khanna & Sharma 2014)

5. PERFORMANCE APPRAISAL PROCESS
Establishing Performance Standard
Communicating the Standard
Measuring Actual Performance
Comparing the Actual With Desired Performance
Discussing Results
Decision Making
Prerequisites
Performance
Planning
Performance
Execution
Performance
Assessment
Performance Review
Performance Renewal
and Re-contracting
Source : (Aguinis, 2014)
Retrieved from http://www.jethr.com/magazine/human-resource-management/
performanceappraisal process/article.html

6. PERFORMANCE INTERVIEW AND FEEDBACK
PERFORMANCE
INTERVIEW
WHY
TYPES
WHAT
HOW
Dilbert__Carol_s_Ca
reer_Goals_hd720.
mp4

7. WHAT IS APPRAISAL INTERVIEW?
• Talks between employee and manager happen on an almost daily
basis. The annual Appraisal Interview however offers the
opportunity to systematically discuss the following content:
– Discuss work and performance of the past year – tasks, work
conditions and cooperation
– Resolve problems and misunderstandings
– Mutually voice acknowledgement and critique in a factual matter
– Agree on measures to boost development and further education
– Mutually agree on long term goals and focus points
• Hence, an Appraisal Interview is a One‐on‐One interview which:
– Takes place at least once a year
– Requires both parties to prepare for it
– Is semi‐structured
– Is carried out by the employee and the direct supervisor using specific
contents

8. TYPES OF APPRAISAL INTERVIEW
• Tell-and-Sell Interview
The skills required in the tell-and-sell interview include the ability to persuade an
employee to change in a prescribed manner. This may require the development of
new behaviors on the part of the employee and skillful use of motivational incentives
on the part of the appraiser/supervisor.
• Tell-and-Listen Interview
In the tell-and-listen interview, the skills required include the ability to communicate
the strong and weak points of an employee's job performance during the first part of
the interview. During the second part of the interview, the employee's feelings about
the appraisal are thoroughly explored. The supervisor is still in the role of appraiser,
but the method requires listening to disagreement and coping with defensive behavior
without attempting to refute any statements. The tell-and-listen method assumes that
the opportunity to release frustrated feelings will help to reduce or remove those
feelings.
• Problem-Solving Interview
The skills associated with the problem-solving interview are consistent with the
nondirective procedures of the tell-and-listen method. Listening, accepting, and
responding to feelings are essential elements of the problem-solving interview.

9. WHY CARRY OUT APPRAISAL
INTERVIEW?
• From the manager’s perspective
– A manager’s success depends on how well an employee can carry out his or her tasks. The
Appraisal Interview enables the manager to fulfill his/her leadership role.
– Agrees on goals with the employee therefore providing the employee with a direction to go to
– Facilitates important information regarding the organizational unit
– Evaluates goals together with the employee and conducts causal research
– Receives information regarding himself, his employees and organizational unit (mutual
exchange of expectations and desires)
– Assists and promotes his/her employees
• From the employee’s perspective
– An employee’s success and career depend on how well he/ she develops his/her skills and
competencies , performance and job satisfaction as well as how well he/she prepares for
possible future tasks and new requirements.
– Receives, via the Appraisal Interview, a guideline on the basis of which criteria he/she will be
evaluated.
– Receives feedback on his/her performance
– Receives information regarding the University and the organizational unit
– Can influence his/her area of work and set goals
– Can get information on possible paths for development, requirements and training and can
also voice his/her wishes regarding training.

10. HOW DOES THE APPRAISAL INTERVIEW WORK?
(Khanna & Sharma 2014)

11. HOW DOES THE APPRAISAL
INTERVIEW WORK?
Dilbert__Impossible_Goal_medium
.mp4
(Khanna & Sharma 2014)

12. Traits identify the physical or psychological
characteristics of a person. We can evaluate the traits of
an individual during the performance appraisal process.
Behavioral appraisals measure what individuals do at
work, not their personal characteristics.
Results are simply a measure of the goals achieved
through a work process. Using results as an evaluation
measure provides management of the organization with
an assessment of the goals that were achieved in a
particular job over time.

13. PERFORMANCE EVALUATION AT
PHARMANIAGA

15. PHARMANIAGA BUSINESS
2013 PMS
Form_Executive.xls

16. Supervisors
Employee
Performance
Evaluation
Self Evaluation
Subordinates
Outside Immediate
Work Situation
Peers or Co-
Workers

17. 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.

18. But are self-evaluations
valuable, or will the
employees overestimate
their individual capabilities and
tell us that they’re perfect?
Dilbert__Wally_s_Self_Evaluation_h
d720.mp4

19. 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.

20. 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.

21. 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.

22. PERFORMANCE APPRAISAL METHOD
Common Evaluation Technique
Individual Evaluation Method
• Graphic Rating Scale
• Forced Choice
• Essay Evaluation
• Critical Incident Technique
• Checklists and Weighted
Checklists
• Behaviorally Anchored
Rating Scales (BARS)
• Behavioral Observation
Scales
Multi Persons Evaluation Methods
• Ranking
• Paired Comparison
• Forced Distribution
• Management by Objectives
(Ivancevich & Konopaske, 2013)

23. PERFORMANCE APPRAISAL METHOD
Comparative and Absolute Behavioral Measurement System
COMPARATIVE
• Simple Rank Order
• Alteration Rank Order
• Paired Comparisons
• Relative Percentile
• Forced Distribution
ABSOLUTE
• Essays
• Behavior Checklist
• Critical Incident
• Graphic Rating Scale
Comparative systems of measuring
behaviors imply that employees are
compared to one another
In Absolute system, supervisors provide
evaluations of an employee’s
performance without making direct
references to other employee
(Aguinis, 2014)

24. PERFORMANCE APPRAISAL METHOD
TRADITIONAL METHOD MODERN METHOD MULTI SOURCES
METHOD
• Rating Scale
• Essay
• Ranking
• Paired Comparisons
• Critical Incident
Methods
• Confidential Report
System
• Checklist Method
• Forced Distributions
• Assessment Centre
• BARS
• Human Resource
Accounting
• Management By
Objective
• Customer Feedback
• 90 Degree
Method
• 180 Degree
Method
• 270 Degree
Method
• 360 Degree
Method
• 720 Degree
Method

25. PERFORMANCE APPRAISAL METHOD
TRADITIONAL METHOD
Rating Scale
A popular, simple technique for
evaluating employees is to use a
graphic rating scale.
Essay
The essay method requires the rater
to describe in writing each employee’s
strengths and weaknesses, along
with suggestions for ways to improve
performance.

26. PERFORMANCE APPRAISAL METHOD
TRADITIONAL METHOD
Ranking
Managers ranking their subordinates in
order of their performance effectiveness
from best to worst. Ranking is most
frequently used for making decisions such
as promotions or the merit salary increase
each employee will receive.
Paired Comparisons
A better technique of comparison than the
straight ranking method, this method
compares each employee with all others in
the group, one at a time. After all the
comparisons on the basis of the overall
comparisons, the employees are given the
final rankings.

27. PERFORMANCE APPRAISAL METHOD
TRADITIONAL METHOD
Critical Incidents Method
The critical incidents technique begins by
identifying job requirements for successful
performance. Job requirements are those
behaviors that determine whether the job
is being done effectively or ineffectively.
Confidential Report System
Mostly used by government
departments, however its application in
industry is not ruled out.

28. PERFORMANCE APPRAISAL METHOD
Checklist Method
The most common technique in the
absolute standards group is some sort of
checklist. Checklists tend to be more
behaviorally based than either graphic
rating scales or other employee-comparison
methods.
TRADITIONAL METHOD
Forced Distribution
“Grading on a curve” is a good example of
the forced distribution method of
performance appraisal. With this
technique, the rater places a
predetermined percentage of rates into
four or five performance categories.

29. PERFORMANCE APPRAISAL METHOD
MODERN METHODS
Assessment Centre
An assessment center is a central location where
managers may come together to have their
participation in job related exercises evaluated
by trained observers. It is more focused on
observation of behaviors across a series of
select exercises or work samples.
BARS
BARS define scale points with specific behavior
statements that describe varying degrees of
performance. The form for a BARS generally
covers six to eight specifically defined
performance dimensions. A BARS should be
developed for each dimension.

30. PERFORMANCE APPRAISAL METHOD
Human Resource Accounting
MODERN METHODS
Human Resource Accounting is a
method to measure the effectiveness
of personnel management activities
and the use of people in an
organization. HRA is the process of
Assigning, budgeting, and reporting
the cost of human resources incurred
in an organization, including wages
and salaries and training expenses.
Management by Objective
“Management by objectives is a process
whereby the superior and subordinate
managers of an organization jointly identify its
common goals, define each individual’s major
areas of responsibility in terms of the results
expected of him, and use these measures as
guides for operating the unit and assessing
the contribution of each of its members.”

31. PERFORMANCE APPRAISAL METHOD
Customer Feedback
MODERN METHODS
This method is truly one of the
modern methods of performance
appraisal system. Under this method
of appraisal system, customer
feedback is directly linked with
employee performance.
This method of assessment could be
unbiased and reliable since
customers who are outsiders may
give correct judgment about
employee performance than the
insiders who are superiors

32. PERFORMANCE APPRAISAL METHOD
MULTI-RATER METHODS
360 Degree
Most organizations that focus on employee
development use the 360-degree tool to assess
performance and potential of staff and enable the
employees to map their career path based on
the feedback. Organizations take 360-degree
feedback about an employee before taking a
major decision about the professional's career.
Dilbert__Evaluation_hd720.mp4

33. PERFORMANCE APPRAISAL METHOD
MULTI-RATER METHODS
• 90 – degree Appraisal: The employee evaluates
himself and shows his strengths and
achievements or his boss evaluates him. (Self or
Boss)
• 180 - degree Appraisal: The employee and the
boss evaluates his performance on a monthly
basis. (Self or Boss)
• 270 – degree Appraisal: The method wherein
the employee is evaluated by 3 persons, himself,
boss and co – workers.
• 720 – degree Appraisal: As the name itself
suggests, in this method, the 360 degree
appraisal method is practiced twice. First the
360 – degree appraisal is done, where the
performance of the employee is analyzed and
having a good feedback mechanism, the boss
sits down with the employee again a second
time and gives him feedback and tips on
achieving the set targets.

34. APPRAISAL ERROR
Unintentional
• Similar to me
• Contrast
• Halo
• Primacy
• Recency
• Negativity Error
• First Impression
• Spillover
• Stereotype
• Attribution
Intentional
• Leniency
• Severity
• Central Tendency

35. APPRAISAL ERROR
Similar To Me Error
• Similarity leads to
attractions
• Supervisors are more
likely to give higher
performance ratings to
those employee who are
perceived to be similar as
them (attitudes,
preferences, personality)
Contrast Error
• Supervisors compare
individual with one
another instead of against
predetermined standards
even though there were
absolute management
system in place.

36. APPRAISAL ERROR
Halo Effect Error
• Rater fails to distinguish
among the different
aspect of performance
being rated.
• Eg : if an employee has a
perfect attendance
record, the rater may give
high mark on dedication
and productivity.
Primacy Error
• Performance evaluation
is influenced mainly by
information collected at
the initial phase of review
period.
• Supposedly, the
evaluation should take
place at all other times.

37. APPRAISAL ERROR
Recency Error
• Occurs when the
performance evaluation is
influenced mainly by the
information gathered
during the last portion of
review period.
Negativity Error
• Raters put more weight
on negative information
than positive or neutral
information.

38. APPRAISAL ERROR
First Impression Error
• Raters make an initial
favorable or unfavorable
judgments about
employee and ignore
subsequent information
that does not support
initial impression.
Spillover Error
• Previous review periods
unjustly influence current
ratings.

39. APPRAISAL ERROR
Stereotypes Error
• Supervisors has
oversimplified view of
individuals based on
group membership.
Attributions Error
• Supervisors attributes
poor performance to an
employee’s dispositional
tendencies (personality,
ability) instead of features
of the situations.

40. APPRAISAL ERROR
• Leniency
– Assign high rating to most
of the employee.
• Severity Error
– Assign low rating to all
employee
• Central Tendency Error
– Middle point of rating scale

41. HOW TO AVOID PERFORMANCE APPRAISAL PROBLEM?
Develop
Accurate
Performance
Measure
• Use multiple criteria
• ability to lower the incidence of halo, recency, contrast, and
attribution errors, and may even be able to affect bias and
stereotyping, because many criteria, not just one or two, are being
analyzed.
• Minimize used of traits based criteria
• trait-based evaluations tend to be more subjective than behavior- or
results-based evaluations and as a result should generally not be
used unless there is a specific reason why the particular trait must
be exhibited in order to be successful in a job.
Train
Evaluators
• To overcome the common problems of assessment.
• Train evaluators to use the measurement methods and forms.
Use Multiple
Raters
• Multiple evaluators limit the ability of one individual appraiser to provide a
biased opinion concerning an employee’s performance.
• In addition, halo, similarity, contrast, and attribution errors become less
likely, and distributional errors tend to even out among multiple raters. It is
for these reasons that 360° evaluations have gained favor in many
organizations over the past 20 years.

42. PERFORMANCE APPRAISAL AT INTEL
• Top 10’s Best
Companies In
Malaysia to Work
For
• Ranked at 9th at
APAC Top 50 in
2013
• Ranked at #53 by
Fortune 500 in
2014

43. Cool stuff at Intel Malaysia—Penang
– In addition to our many benefits and programs,
employees get a bunch of other perks! Here's a
peek at some of the cool stuff that makes Intel
Penang a great place .
– State-of-the-art fitness centers (including yoga,
taiji, dance)
– Sports courts and fields (badminton, basketball,
jogging path, soccer, tennis, volleyball)
– Indoor recreation amenities (gaming consoles, ping
pong/table tennis, table football/foosball, rec room,
TVs )
– Pampering amenities (massage chairs)
– Cafes with free fruit and drinks
– Coffee bars, hot beverage machines
– Convenience store, ATMs
– Health for Life Centers (onsite health care for
employees), nutritionists, blood pressure
machines, and Mother rooms)
– Employee discount programs, and motor and
group insurance
– Convenience amenities (eyeglass cleaning, hand
sanitizers, lobby services, mobile phone chargers,
newspapers, umbrellas)
– Hobby and social clubs, and organized leisure
activities
– Networking platforms where employees can
connect with each other
Today, Intel Penang is home to a high-tech campus
with 10 buildings; including one of Intel's largest
assembly and test sites and a design and
development center.

44. PERFORMANCE APPRAISAL AT INTEL
What method of
Performance Appraisal used
at INTEL?
• 360 Degree Appraisal Method
When the appraisal been
conducted?
• 6 Times a year (Every 2 Months)
How the performance
appraisal process being
conduct?
• Every units/department will review their own
team members
• The final evaluation will be reviewed by the
Head of units/division
• The staff need to do their KPI survey via the
company’s internal performance survey system
• The score will be finalize by the Head of
Units/Division according to the staff
performance schedule.

45. PERFORMANCE APPRAISAL AT INTEL
How does it linked with
reward system?
• Top performers will be reward accordingly
• The performers will be reward according no of
months (salary)
• e.g.: Top performer will be rewarded with 6
months bonus for the current appraisal, while
other with 2 months bonuses
Is there any differences
between performance
appraisal system at Intel
Malaysia with any other
country of operations?
• The performance evaluation procedures and
system used is synchronized and standardize
within the organization around the world.

46. STACK RANKING AT MICROSOFT
• Stack ranking is one tool that Microsoft
is using—perhaps misusing—to identify
high and low performers. Stack ranking
means that employees are ranked from
best to worst, forcing their manager to
make hard choices.
• By 2012, 60% of Fortune 500 firms used
Rank and Yank – giving it more politically
correct labels. But a 2011 study by the
Institute for Corporate Productivity (i4cp)
found that the number of companies using
forced ranking fell from 49% in 2009
to 14% in 2011. But i4cp believes
that companies kept the game and
changed the name.

47. STACK RANKING AT MICROSOFT
• One of the best-known stacked ranking
systems is former General
Electric CEO Jack Welch’s Vitality Curve,
which assigns high-achieving employees,
which he called “A players,” to the top 20
percent, normally productive employees
(B players) to the middle 70 percent level
and unproductive employees (C players)
to the bottom 10 percent rank.
• According to Welch, the top employees
should be further motivated with
bonuses and other rewards and the
bottom 10 percent should be fired.

48. Height,J. (2013). Microsoft and Stack Ranking. Retrieved from
http://www.slideshare.net/BlueHillResearch/microsoft-and-stack-ranking?related=2

49. Height,J. (2013). Microsoft and Stack Ranking. Retrieved from
http://www.slideshare.net/BlueHillResearch/microsoft-and-stack-ranking?related=2

50. Ackerman et.al (2014). Performance Management at Microsoft. Retrieved from
http://www.slideshare.net/jeetraut/human-resource-management-final-project-35808028?related=3

51. PROBLEMS WITH STACK RANKING AT
MICROSOFT
Ackerman et.al (2014). Performance Management at Microsoft. Retrieved from
http://www.slideshare.net/jeetraut/human-resource-management-final-project-35808028?related=3

52. Height,J. (2013). Microsoft and Stack Ranking. Retrieved from
http://www.slideshare.net/BlueHillResearch/microsoft-and-stack-ranking?related=2

53. Height,J. (2013). Microsoft and Stack Ranking. Retrieved from
http://www.slideshare.net/BlueHillResearch/microsoft-and-stack-ranking?related=2

54. ABOLISHMENT OF STACK RANKING AT
MICROSOFT
• Microsoft’s head of human resources said the company would end
the practice in favor of a new and more flexible system intended
to encourage better collaboration among employees.
• Our new approach will make it easier for managers and leaders to
allocate rewards in a manner that reflects the unique contributions of
their employees and teams,” Lisa Brummel, the executive vice
president of human resources
• Microsoft redesigned its performance management system and total
rewards program, integrating the two systems to allow for
simplified, transparent and differentiated rewards, J. Ritchie,
& Julie Tschida Brown, 2012)

55. ABOLISHMENT OF STACK RANKING AT
MICROSOFT
• A simplified system was implemented companywide using an
integrated approach. The aim was to reduce 'process' and improve
the line of sight between employees contributions to the
company's success and increases in compensation.“
• Effective with 2011 performance reviews, employees receive one
rating based on their manager's assessment and a calibration
process (typically with managers one or two levels above the
employee).
• The rating ranges from "1" (highest) to "5" (lowest). A "3" rating
equals target compensation that is market competitive locally.
Targeted distribution limits the percentage of employees in each
rating category.

56. ABOLISHMENT OF STACK RANKING AT
MICROSOFT
• The single rating triggers increases in merit pay, bonus and RSUs, with the size of the
increase tied to factors such as job family and discipline.
• Performance Inputs
– three inputs determine the single performance rating:
– • What employees did during the year vs. their goals/commitments, relative to the
achievements of their peers.
– • The behavior used to achieve those results as reflected in feedback from peers
and managers.
– • Employees’ proven capabilities based on the above inputs plus their long-term
performance record.
Job Ratings and Rewards and Microsoft
1 (highest) 2 3 4 5 (lowest)
Merit pay $$$$ $$$ $$ $ --
Bonus $$$$ $$$ $$ $ --
Restricted
$$$$ $$$ $$ $ --
stock units

57. ABOLISHMENT OF STACK RANKING AT
MICROSOFT
• The company provides an interactive intranet portal that
allows employees to see how their compensation would
shift based on different performance ratings. The aim is to
provide clear, customized communications.
• As a result of the new system with its clearer line of sight, pay
satisfaction among employees went up, Microsoft found, and
employees and managers report that the quality of their
discussions around pay and performance has improved.
• The goal is to "attract and retain key talent by delivering the
highest compensation to the highest performing employees,“.
Retrieved from :
http://www.shrm.org/hrdisciplines/compensation/articles
/pages/rewardsatmicrosoft.aspx

58. REFERENCES
• Ackerman et.al (2014). Performance Management at Microsoft. Retrieved from
http://www.slideshare.net/jeetraut/human-resource-management-final-project-35808028?related=3
• Aguinis, H. (2014). Performance Management. United States of America.
• Demo: Microeconomics: Principles and Tools (activebook): Chapter 4. (2014, October 8). Retrieved from
http://151.fosu.edu.cn/rlzyzdkc/ybs/index0811.htm
• Height,J. (2013). Microsoft and Stack Ranking. Retrieved from http://www.slideshare.net/BlueHillResearch/microsoft-and-
stack-ranking?related=2
• Intel Corporation - Fortune 500 2014 - Fortune. (2014, October 10). Retrieved from http://fortune.com/fortune500/intel-corporation-
53/
• Ivancevich, J. M., & Konopakse, R. (2013). Performance Evaluation and Management. In Human Resources
Management. Singapore.
• Kondarasuk, J.N. (2011). So What an Ideal Performance Appraisal Look Like? Journal of Applied Business and
Economics vol. 12(1).
• Lunenberg,F.C (2012). Performance Appraisal: Methods and Rating Errors. International Journal Of Scholarly Academic
Intellectual Diversity vol.14, (1).

59. REFERENCES
• Miller, S. (2013, November 18). Integrating Performance Management and Rewards at Microsoft. Retrieved from
http://www.shrm.org/hrdisciplines/compensation/articles/pages/rewardsatmicrosoft.aspx
• Olson, E. G. (2013, November 18). Microsoft, GE, and the futility of ranking employees - Fortune. Retrieved from
http://fortune.com/2013/11/18/microsoft-ge-and-the-futility-of-ranking-employees/
• Performance Appraisal - Process. (2014, October 9). Retrieved from http://www.jethr.com/magazine/human-resource
management/performance-appraisal process/article.html
• Performance Appraisal Methods | Human Resources Management. (2013, October 10). Retrieved from
http://corehr.wordpress.com/performance-management/performance-appraisal-methods/
• Top 10 of Malaysia :: Top 10’s Best Companies In Malaysia To Work For. (2014, October 10). Retrieved from
http://top10malaysia.com/home/index.php/news-and-events/top-10-s-best-companies-in-malaysia-to-work-for