World Academy of Science, Engineering and Technology 53 2009

Performance Appraisal System using Multifactorial

Evaluation Model
C. C. Yee, and Y.Y.Chen

Khairul, A. R and Qiang, S. [3] mentioned that, there has been

Abstract—Performance appraisal of employee is important in an argument regarding one of the most suitable ways of
managing the human resource of an organization. With the change managing multiple variables that have imprecise data to apply
towards knowledge-based capitalism, maintaining talented fuzzy concept reasoning which reflects the way of human-
knowledge workers is critical. However, management classification thinking. Various studies were conducted to improve the
of “outstanding”, “poor” and “average” performance may not be an application of fuzzy sets theory and fuzzy logic in areas of
easy decision. Besides that, superior might also tend to judge the
work performance of their subordinates informally and arbitrarily
performance appraisal. In this paper, we aimed to develop a
especially without the existence of a system of appraisal. In this performance appraisal system that applies the fuzzy set theory
paper, we propose a performance appraisal system using in dealing with appraisal grades which are often express
multifactorial evaluation model in dealing with appraisal grades vaguely in linguistic terms. Therefore, we proposed to use
which are often express vaguely in linguistic terms. The proposed multifactorial evaluation model, an application of fuzzy set
model is for evaluating staff performance based on specific theory to decision making process, in the performance
performance appraisal criteria. The project was collaboration with appraisal system.
one of the Information and Communication Technology company in
Malaysia with reference to its performance appraisal process. II. RELATED WORK
A. Performance Appraisal System
Keywords—Multifactorial Evaluation Model, performance Performance appraisal is a formal management system that
appraisal system, decision support system.
provides for the evaluation of the quality of an individual’s
performance in an organization [4]. As mentioned by Dessler,
G [5], performance appraisal has the means to evaluate an
I. INTRODUCTION
employee’s current and past performance relative to the
A CCORDING to Moon, C. et al. [1], performance
appraisal of candidates in relation to a particular position,
is a key task towards managing the human resources of an
employee’s performance standards. It is a process which
involves creating work standards; evaluate employee’s actual
performance relative to those work standards; and giving
organization. Supervisors are concerned with performance feedback to employee so as to motivate him or her to improve
appraisal judgments and evaluations that they have to make on the job performance or to eliminate performance deficiency.
their subordinates. On the other hand, subordinates are In addition to that, Terrence, H. M and Joyce, M. [6] stated
increasingly realizing the importance of performance appraisal that, some potential aims of performance appraisal might
since it would very much affect their rewards and future include identifying particular behavior or job.
career path. As the world began to shift towards knowledge- Various techniques or methods have been used by human
based capitalism, it reminds all organizations on the resource management experts to evaluate the performance of
importance of maintaining their talented knowledge workers an employee. As outlined by Vicky G. [7], some of the
[1]. Therefore, discovering and promoting the most qualified appraisal methods include ranking; trait scales; critical
candidates is essential because valuable human expertise is the incident; narrative; and criteria-based. Terrence, H. M. and
main source of competitive advantage for the organizations. Joyce, M. [6] mentioned few other methods including
Thus, the creation of performance criteria is an important management-by-objectives (MBO), work planning and
requirement towards performance appraisal [2]. review, 360o appraisal and peer review. With all the available
Performance appraisal is usually conducted periodically techniques, it is essential to understand that different
within an organization to examine and discuss the work organization might use different technique in assessing staff
performance of subordinate so as to identify the strengths and performance. Since all the techniques mentioned above has
weaknesses as well as opportunities for improvement among their own advantages and disadvantages, most organizations
employees. Following this, most of the employers use the might mix and match different techniques for their own
performance appraisal result to determine if a particular staff performance appraisal system that can fulfill their
should be terminated or reinforced; as an employee organizational needs.
development and coaching tool; to give a practical evaluation Performance appraisal system has become one of the most
of an employee’s readiness for promotion; and to serve as the valuable management tool in which organization members use
foundation for giving merit bonus. to achieve collective goals. In order to ensure that the results
Following the awareness and understanding of the concept of the performance appraisals are useful and reasonable to the
of fuzzy sets, some researchers have applied the fuzzy sets superior when evaluating their subordinates, it is important for
theory to the performance appraisal process. However, the performance appraisal system to consistently produce

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reliable and valid results for the management of an following section will described the performance appraisal
organization. model of the company.

B. Application of Fuzzy based Method IV. PERFORMANCE APPRAISAL MODEL

Fuzzy based method has been applied into several A. Performance Appraisal Process
performance appraisal systems. Moon, C. et al [1] proposed a Performance appraisal is used by an organization to reward
methodology utilizing fuzzy set theory and electronic nominal and develop the human resource of the organization to ensure
group technology for multi-criteria assessment in the group that the organization runs smoothly and grow. Every year,
decision-making of promotion screening. The study suggested staffs are required to fill up Yearly Work Plan to report on the
that the methodology is a good method for a transparent and progress of the tasks assigned as agreed early of the year. This
fair multi-criteria performance evaluation in military is done at the beginning and at the middle of the year. At year
organizations. end, the Yearly Work Plan is used to evaluate the performance
Researchers have demonstrated that fuzzy set theory could of the staff throughout the whole year. The process of
be successfully used to solve multiple criteria problems [8]. performance appraisal is shown in Fig. 1 below.
This is because, in many circumstances, appraiser tends to use
vaguely defined qualitative criteria in evaluating the
performance of their subordinates. Therefore, it creates
difficulty for appraiser to precisely quantifying the score of
each candidate. Jing. R.C et al [8] worked on applying fuzzy
set theory on computer-based fuzzy group decision support
system (FGDSS). Based on the findings of their work, the
application of fuzzy set theory in FGDSS is said to be able to
assist decision maker to make better decisions under different
circumstances and alternatives [1].
A good example of the application of the fuzzy-set theory to
decision-making process is multifactorial evaluation model
[9]. For example, Tutmez et. al. [10] had used multifactorial
fuzzy approach to evaluate the sawability and select a suitable
diamond saw for a new building stone. This study has
suggested that information can reasonably obtain and
sawability classification is reasonable and acceptable.
The literatures that have been reviewed supported that the
Fig. 1 Performance Appraisal Process
fuzzy set theory would be a good concept to be used in the
development of the performance appraisal system. This is
B. Staff Evaluation
because fuzzy set theory allows the performance appraisal
Four aspects will be taken into consideration when
system to be developed by using some fuzzy variables and
evaluating staff performance and each aspect will index into
relationships. Therefore, the idea of incorporating this model
its subcriteria, as follows:
in the performance appraisal system can be a promising
approach.
(a) Working output (Aspect 1): This aspect evaluates the
quantity, quality and effectiveness of the staff’s
III. METHODOLOGY
working output as well as staff’s punctuality.
In this study, we have collaborated with one of the
(b) Knowledge and skills (Aspect 2): This aspect evaluates
Information and Communication Technology based company
the staff’s knowledge and skills in the working field as
in Malaysia to understand their performance appraisal process.
well as their effectiveness in communication and
Interview has been conducted with their Human Resource
realization of rules.
Section. A semi-structured interview was adopted. The semi-
(c) Personal quality (Aspect 3): This aspect evaluates the
structured interview in this study is most appropriate because
personal quality appreciated by the organization such as
it provides a great deal of flexibility to interviewees on how to
discipline, proactive, innovative, cooperativeness and
reply the questions. At the same time, interviewers were able
independence.
to pick up appropriate information by the interviewee [11].
(d) Informal Event(s) and Contribution(s) (Aspect 4):
Prior to actual implementation of the system, questionnaires
Staff’s contribution to the organization, community,
were distributed to the human resource section to evaluate the
state, country and international.
usability and effectiveness of the system. In order to
demonstrate the application of multifactorial evaluation model
When evaluating staff’s performance, appraiser will use a scale
in the performance appraisal system, a performance appraisal
of 1 to 10 to rate each subcriteria for each aspect mentioned
system that applied multifactorial evaluation model was
above. 1 indicates that the staff was rated poorly in that
developed. This performance appraisal system used the
particular subcriteria and 10 indicates that the staff was rated
performance appraisal criteria provided by the company. The

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highly in a particular subcriteria. The verbal grade for the scale The verbal grades used for the appraisal are:
is shown in Table I: e1 = Very High,
e2 = High,
TABLE I e3 = Moderate,
VERBAL GRADES AND SCALE FOR EACH ASPECT
e4 = Low, and
VERBAL GRADES SCALE e5 = Very Low
Very high 9 or 10 Therefore, E = {e1, e2, e3, e4, e5}.
High 7 or 8
Moderate 5 or 6 For a staff’s performance in terms of working output, the
Low 3 or 4 single-factor evaluation for each aspect has been determined
Very Low 1 or 2 by the executives in the Administration Section of the
company. As an example, the weightage of the “Quantity of
Working Output” factor f1 are, 10% for Very High, 40% for
V. PERFORMANCE APPRAISAL SYSTEM High, 30% for Moderate, 10% for Low, and 10% for Very
The proposed application of Muiltifactorial Evaluation Low, thus, the single-factor evaluation vector R1(u) is:
Model in the performance appraisal system is a combination R1(u) = {0.1, 0.4, 0.3, 0.1, 0.1}
of four multifactorial evaluation models. In the same way, the single-factor evaluation vectors for f2,
f3, and f4 which have been gained are as shown as below:-
R2(u) = {0.2, 0.5, 0.2, 0.1, 0.0}
R3(u) = {0.5, 0.3, 0.1, 0.1, 0.0}
R4(u) = {0.2, 0.5, 0.2, 0.1, 0.0}
As a result, by referring to the single-factor evaluations
vectors stated above, the following evaluation matrix can be
built:-

R(u) = R1(u) = 0.1 0.4 0.3 0.1 0.1

R2(u) 0.2 0.5 0.2 0.1 0.0
R3(u) 0.5 0.3 0.1 0.1 0.0
R4(u) 0.2 0.5 0.2 0.1 0.0

W(u) is the weighting factors. Therefore, it is the

appraiser’s rating towards a staff for all the subcriteria in a
particular aspect. As an example, assume that the appraiser’s
rating for weight vector corresponding to the four factors in
all aspects are:
Fig. 2 Proposed Application of Multifactorial Evaluation Model in W1(u) = {0.2, 0.3, 0.3, 0.2}
Performance Appraisal System W2(u) = {0.3, 0.4, 0.3}
W3(u) = {0.2, 0.3, 0.2, 0.3}
As shown in Fig. 2, each of the models represents aspect to W4 (u) = {0.1}
be evaluated in the performance appraisal. After getting the
staff’s performance on each aspect from their superior, the Multiplication of matrices W(u) and R(u) is based on the
staff’s overall average ratings can be calculated by following min-max composition of fuzzy relations, where the resulting
the equation shown in Fig. 2 above. In Fig. 2, U is the factors evaluation is in the form of a fuzzy set D(u) = [d1, d2, d3, d4]
to be evaluated in each aspect whereas D(u) is the result of [9]. Since the aspect of Working Output has five verbal
staff’s performance in a particular aspect. grades, that is, E = {e1, e2, e3, e4, e5} which would be involved
The first evaluation model in Fig. 2 uses U1, that is, the in the performance appraisal system, thus, the resulting
factors in Aspect 1 (Working Output) as its input. The evaluation is in the form of a fuzzy set D(u) = [d1, d2, d3, d4,
subcriteria for this aspect will be used as the basic factors d5] as shown below:-
under this aspect which are:
f1 = Quantity of Working Output, D(u) = W1(u) . R(u)
f2 = Quality of Working Output,
f3 = Punctuality, and = [0.2 0.3 0.3 0.2] . 0.1 0.4 0.3 0.1 0.1
f4 = Effectiveness of Working Output. 0.2 0.5 0.2 0.1 0.0
0.5 0.3 0.1 0.1 0.0
Therefore, F = {f1, f2, f3, f4}. 0.2 0.5 0.2 0.1 0.0

= [0.3 0.3 0.2 0.1 0.1]

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They are calculated through the following steps as shown aspect of Personal Quality, and the aspect of Informal
below whereby ^ represent the operations min and v represent Event(s) and Contribution(s), respectively. Following this, the
the operation max. verbal grades and weighting for each aspect as shown in Table
II is being referred when calculating a staff’s overall average
d1 = (w1 ^ r11) v (w2 ^ r21) v (w3 ^ r31) v (w4 ^ r41) ratings:-
= (0.2 ^ 0.1) v (0.3 ^ 0.2) v (0.3 ^ 0.5) v (0.2 ^ 0.2)
The staff’s overall average rating (AR) is:-
= 0.1 v 0.2 v 0.3 v 0.2
AR = (Aspect 1 * 50) + (Aspect 2 * 25) + (Aspect 3 * 20) +
= 0.3
(Aspect 4 * 5)
d2 = (w1 ^ r12) v (w2 ^ r22) v (w3 ^ r32) v (w4 ^ r42) Based on Table II, the analyzed staff’s performance in terms
= (0.2 ^ 0.4) v (0.3 ^ 0.5) v (0.3 ^ 0.3) v (0.2 ^ 0.5) of working output obtained a rating of “Very High”. As a
= 0.2 v 0.3 v 0.3 v 0.2 result, 1.0 would be the weighting for Aspect 1. Meanwhile,
= 0.3 according to what have been computed by using the
multifactorial evaluation model, the staff has been rated as
d3 = (w1 ^ r13) v (w2 ^ r23) v (w3 ^ r33) v (w4 ^ r43) “Moderate” or the weighting of 0.6 in terms of Knowledge
= (0.2 ^ 0.3) v (0.3 ^ 0.2) v (0.3 ^ 0.1) v (0.2 ^ 0.2) and Skill. As for the aspect of Personal Quality, the staff’s
= 0.2 v 0.2 v 0.1 v 0.2 performance is “Excellent” or the weighting of 1.0 would be
= 0.2 selected. As for the Informal Event(s) and Contribution(s), the
staff has gained an “Active” performance or the weighting of
d4 = (w1 ^ r14) v (w2 ^ r24) v (w3 ^ r34) v (w4 ^ r44) 0.8 for this aspect. Thus, the rating and weighting for each
= (0.2 ^ 0.1) v (0.3 ^ 0.1) v (0.3 ^ 0.1) v (0.2 ^ 0.1) aspect is as summarized below:-
= 0.1 v 0.1 v 0.1 v 0.1
TABLE III
= 0.1 SUMMARIZED RATING AND WEIGHTAGE OF THE 4 ASPECTS
Aspect Rating Weighting
d5 = (w1 ^ r15) v (w2 ^ r25) v (w3 ^ r35) v (w4 ^ r45) Aspect 1 Very High 1.0
= (0.2 ^ 0.1) v (0.3 ^ 0.0) v (0.3 ^ 0.0) v (0.2 ^ 0.0) Aspect 2 Moderate 0.6
= 0.1 v 0.0 v 0.0 v 0.0 Aspect 3 Excellent 1.0
= 0.1 Aspect 4 Active 0.8

Since the largest components of D(u) are d1 = 0.3, and d2 = Therefore, the staff’s overall average rating (AR) is:-
0.3 at the same time. Referring to the verbal grades, E = {Very AR = (1.0 * 50) + (0.6 * 25) + (1.0 * 20) + (0.8 * 5)
High, High, Moderate, Low, very Low}, the analyzed staff’s = 89
performance in terms of working output obtained a rating
somewhere between “Very High” and “High”. However, by As a result, according to the calculation above and by
applying the principle of the biggest subjection degree as referring to Table IV below, the staff would be categorized in
mentioned by Guifeng, G. et. al. [12], the staff’s performance the “High Performer(s)” group.
in terms of working output is “Very High”.
TABLE IV
TABLE II BENCHMARK / STANDARD USED IN DETERMINING STAFF’S PERFORMANCE
VERBAL GRADES AND WEIGHTING FOR EACH ASPECT Overall Average
Group Remarks
Aspect Weighting for Each Ratings
Verbal Grades
Aspect • Entitled for “Best
Very High 1.0 Service Award”.
High 0.8 High • An incentive of RM
Aspect 1 Above 80%
Moderate 0.6 Performer(s) 1000.
Low 0.4 • A certificate of
Very Low 0.2 appreciation.
Excellent 1.0 Less than 80% • Advised to improve
Average
Good 0.8 but more than 50 their performance in the
Performer(s)
Aspect 2 and 3 Moderate 0.6 % coming year.
Weak 0.4 • Disciplinary action
Very Weak 0.2 might be taken towards
Very Active 1.0 the staff.
Low
Active 0.8 Less than 50% • Should constantly report
Performer(s)
Aspect 4 Moderately Active 0.6 his / her work progress
Less Active 0.4 to his / her assessors in a
Not Active 0.2 stated period.

The same method of calculation can be applied to U2, U3,

and U4, which are, the aspect of Knowledge and Skills, the

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V. CONCLUSION
In this study, we intended to give an illustrative example
that encourages the application of one of the fuzzy set theory
in the multi-criteria performance appraisal system. Following
this, we have developed a performance appraisal system
utilizing the performance appraisal criteria from an
Information and Communication Technology based company
in Malaysia. This system uses multifactorial evaluation model
in assisting high-level management, particularly in the
aforementioned company, to appraise their employees.
Utilizing the concept of using four multifactorial evaluation
model in the performance appraisal system could ease the
changes need to be made in this system whenever it is
necessary. This model follows a systematic step in
determining a staff’s performance, and therefore, it creates a
system of appraisal which is able to consistently produce
reliable and valid results for the appraisal process. In order to
allow other companies to use this system, the aspect to be
evaluated and the weightage for each of these aspects need to
be define in the system before hand.

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