Current Trends in Performance Appraisal

Unit 4
Current Trends in Performance Appraisal

 Elimination of ratings as rating seems to distract all efforts of organizational
improvement.
 Identification of constraints and eradicating them.
 Create internal performance consultants whose duty is to define performance

standards and analyse performance.
 Self-review provides an opportunity to every employee to comment on his /

her perceptions and views on achievement of targets.
Performance Appraisal continues to be a subject of interest and importance to

Human Resource specialists.
 In 1976 Taylor and Zawacki published an article on Performance

Appraisal, which makes a shift from collaborative approach (Management
By Objective & Behaviourally Anchored Rating Scale) towards the more
traditional performance appraisal techniques (graphic rating scale, paired
comparison, ranking, checklist etc).
 Through 1980, researchers continued to document performance appraisal

practices. Bernardin & Klatt, in 1985 noted that small firms tended to rely
heavily on trait-based approaches while larger firms relied on a
combination of trait, behavioural and result-based techniques. They noted
that one in five organizations did not give employees the opportunity to
review the performance appraisal results.
 Thomas & Bretz, in 1994 reported that performance information is most

likely to be used for employee’s development or to administer merit pay.
Other common administrative uses include promotions, lay-offs, transfer,
termination etc.
 Hall, Posner and Hardener, in 1998 identified common objectives of

performance appraisal as reviewing past performance, rewarding past
performance, goal setting for future performance and employee
development.
Current trends in Performance Appraisal
 Day-to-day feedback and bi-monthly feedback sessions.
 Manager as a coach instead of appraiser.

1 Recent trends in Performance appraisal
 Performance management as a function of training & development.
The common methods of performance appraisal today are:

1) 90o Appraisal: The employee evaluates himself and shows his strengths
and achievements or his boss evaluates him. (Self or Boss)
2) 180o Appraisal: The employee and the boss evaluate his performance on a
monthly basis. (Self and Boss)
3) 270o Appraisal: The method wherein the employee is evaluated by 3

persons, himself, boss and co-workers.
4) 360o Appraisal: Also known as ‘multi-rater’ feedback, where feedback

about employee’s performance comes from a Supervisor/superior, co-worker,
client/customer, subordinates and the self-assessment of the employee
himself)
5) 720 Appraisal: As the name itself suggests, in this method, the 360o
appraisal method is practiced twice. First the 360o appraisal is done, where
the performance of the employee is analysed 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.

6) Rank & Yank strategy: Also known as ‘in or out policy’ the rank and yank
strategy refers to the performance appraisal model in which the employees
are first ranked from Best to Worst and these rankings are used to identify
and separate poor performers from the good performers. Then the action
plans for improvement of the poor performers are discussed and they are
given a certain time to improve their performance, after which the
appropriate HR decisions are taken. Some of the prominent corporations
which follow this strategy are Ford, Microsoft and Sun Microsystems.
7) Balance score card: It is a tool to measure the performance of the

employees which was developed by Robert Kaplan and David Norton. It not
only measures the performance of employees but also includes:
a) Financial Perspective: Includes measures such as operating income, return

on capital employed etc.
b) Customer perspective: Includes measures such as customer satisfaction,

customer retention, etc.
c) Business process perspective: Includes measures like cost incurred on the

employee, quality of output etc.
d) Learning & growth perspective: Includes parameters such as employee

satisfaction, employee retention, skills, etc.
There is a logical connection between learning and growth arising in a better

business process, which in turn leads to an increased value to the customer and
eventually in improved financial performance of the organisation.

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What are some common objectives of performance appraisal?

What are some common objectives of performance appraisal?

What are some common methods of performance appraisal today?

What are some common methods of performance appraisal today?

Unit 4

Current Trends in Performance Appraisal

 Identification of constraints and eradicating them.

 Create internal performance consultants whose duty is to define performance

 Self-review provides an opportunity to every employee to comment on his /

Performance Appraisal continues to be a subject of interest and importance to

 In 1976 Taylor and Zawacki published an article on Performance

 Through 1980, researchers continued to document performance appraisal

 Thomas & Bretz, in 1994 reported that performance information is most

 Hall, Posner and Hardener, in 1998 identified common objectives of

Current trends in Performance Appraisal

 Day-to-day feedback and bi-monthly feedback sessions.

 Manager as a coach instead of appraiser.

The common methods of performance appraisal today are:

3) 270o Appraisal: The method wherein the employee is evaluated by 3

4) 360o Appraisal: Also known as ‘multi-rater’ feedback, where feedback

2 Recent trends in Performance appraisal

7) Balance score card: It is a tool to measure the performance of the

a) Financial Perspective: Includes measures such as operating income, return

b) Customer perspective: Includes measures such as customer satisfaction,

c) Business process perspective: Includes measures like cost incurred on the

d) Learning & growth perspective: Includes parameters such as employee

There is a logical connection between learning and growth arising in a better

3 Recent trends in Performance appraisal

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