performance appraisal methods
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Performance Appraisal Methods | Human Resources Management
http://corehr.wordpress.com/performance-management/performance-appraisal-methods/[09-11-2014 17:46:37]
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Performance Appraisal Methods
Performance Appraisal Methods“It is a systematic evaluation of an individual with respect to performance on the job andindividual’s potential for development.”
Definition 2: Formal System, Reasons and Measures of future performance
“It is formal, structured system of measuring, evaluating job related behaviors and outcomes todiscover reasons of performance and how to perform effectively in future so that employee,organization and society all benefits.”
Meaning of Performance Appraisals
Performance Appraisals is the assessment of individual’s performance in a systematic way. It is adevelopmental tool used for all round development of the employee and the organization. Theperformance is measured against such factors as job knowledge, quality and quantity of output,initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility andhealth. Assessment should be confined to past as well as potential performance also. The seconddefinition is more focused on behaviors as a part of assessment because behaviors do affect jobresults.
Performance Appraisals and Job Analysis Relationship
Job Analysis à Performance Standards à Performance Appraisals
Describe the work andpersonnel requirement of aparticular job.
Translate job requirementsinto levels of acceptable orunacceptable performance
Describe the job relevantstrengths and weaknesses ofeach individual.
Objectives of Performance Appraisals
Use of Performance Appraisals
1. Promotions
2. Confirmations
3. Training and Development
4. Compensation reviews
5. Competency building
6. Improve communication
7. Evaluation of HR Programs
8. Feedback & Grievances
4 Goals of Performance Appraisals
General Goals Specific Goals
Developmental Use Individual needs
Performance feedback
Transfers and Placements
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Performance Appraisal Methods | Human Resources Management
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Strengths and Development needs
Administrative Decisions / Uses Salary
Promotion
Retention / Termination
Recognition
Lay offs
Poor Performers identification
Organizational Maintenance HR Planning
Training Needs
Organizational Goal achievements
Goal Identification
HR Systems Evaluation
Reinforcement of organizational needs
Documentation Validation Research
For HR Decisions
Legal Requirements
Performance Appraisal Process
1. Objectives definition of appraisal
2. Job expectations establishment
3. Design an appraisal program
4. Appraise the performance
5. Performance Interviews
6. Use data for appropriate purposes
7. Identify opportunities variables
8. Using social processes, physical processes, human and computer assistance
Difference between Traditional and Modern (Systems)approach to Appraisals
Categories Traditional Appraisals Modern, Systems Appraisals
Guiding Values Individualistic, Controloriented, Documentary
Systematic, Developmental,Problem solving
Leadership Styles Directional, Evaluative Facilitative, Coaching
Frequency Occasional Frequent
Formalities High Low
Rewards Individualistic Grouped, Organizational
TECHNIQUES / METHODS OF PERFORMANCE APPRAISALS
Numerous methods have been devised to measure the quantity and quality of performanceappraisals. Each of the methods is effective for some purposes for some organizations only.None should be dismissed or accepted as appropriate except as they relate to the particularneeds of the organization or an employee.
Broadly all methods of appraisals can be divided into two different categories.
Past Oriented Methods
Future Oriented Methods
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Performance Appraisal Methods | Human Resources Management
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Past Oriented Methods
1. Rating Scales: Rating scales consists of several numerical scales representing job relatedperformance criterions such as dependability, initiative, output, attendance, attitude etc. Eachscales ranges from excellent to poor. The total numerical scores are computed and finalconclusions are derived. Advantages – Adaptability, easy to use, low cost, every type of job canbe evaluated, large number of employees covered, no formal training required. Disadvantages –Rater’s biases
2. Checklist: Under this method, checklist of statements of traits of employee in the form ofYes or No based questions is prepared. Here the rater only does the reporting or checking andHR department does the actual evaluation. Advantages – economy, ease of administration,limited training required, standardization. Disadvantages – Raters biases, use of improper weighsby HR, does not allow rater to give relative ratings
3. Forced Choice Method: The series of statements arranged in the blocks of two or moreare given and the rater indicates which statement is true or false. The rater is forced to make achoice. HR department does actual assessment. Advantages – Absence of personal biasesbecause of forced choice. Disadvantages – Statements may be wrongly framed.
4. Forced Distribution Method: here employees are clustered around a high point on arating scale. Rater is compelled to distribute the employees on all points on the scale. It isassumed that the performance is conformed to normal distribution. Advantages – EliminatesDisadvantages – Assumption of normal distribution, unrealistic, errors of central tendency.
5. Critical Incidents Method: The approach is focused on certain critical behaviors ofemployee that makes all the difference in the performance. Supervisors as and when they occurrecord such incidents. Advantages – Evaluations are based on actual job behaviors, ratings aresupported by descriptions, feedback is easy, reduces recency biases, chances of subordinateimprovement are high. Disadvantages – Negative incidents can be prioritized, forgettingincidents, overly close supervision; feedback may be too much and may appear to bepunishment.
6. Behaviorally Anchored Rating Scales: statements of effective and ineffective behaviorsdetermine the points. They are said to be behaviorally anchored. The rater is supposed to say,which behavior describes the employee performance. Advantages – helps overcome ratingerrors. Disadvantages – Suffers from distortions inherent in most rating techniques.
7. Field Review Method: This is an appraisal done by someone outside employees’ owndepartment usually from corporate or HR department. Advantages – Useful for managerial levelpromotions, when comparable information is needed, Disadvantages – Outsider is generally notfamiliar with employees work environment, Observation of actual behaviors not possible.
8. Performance Tests & Observations: This is based on the test of knowledge or skills. Thetests may be written or an actual presentation of skills. Tests must be reliable and validated tobe useful. Advantage – Tests may be apt to measure potential more than actual performance.Disadvantages – Tests may suffer if costs of test development or administration are high.
9. Confidential Records: Mostly used by government departments, however its application inindustry is not ruled out. Here the report is given in the form of Annual Confidentiality Report(ACR) and may record ratings with respect to following items; attendance, self expression, teamwork, leadership, initiative, technical ability, reasoning ability, originality and resourcefulness etc.The system is highly secretive and confidential. Feedback to the assessee is given only in case ofan adverse entry. Disadvantage is that it is highly subjective and ratings can be manipulatedbecause the evaluations are linked to HR actions like promotions etc.
10. Essay Method: In this method the rater writes down the employee description in detailwithin a number of broad categories like, overall impression of performance, promoteability ofemployee, existing capabilities and qualifications of performing jobs, strengths and weaknessesand training needs of the employee. Advantage – It is extremely useful in filing information gapsabout the employees that often occur in a better-structured checklist. Disadvantages – It itshighly dependent upon the writing skills of rater and most of them are not good writers. Theymay get confused success depends on the memory power of raters.
11. Cost Accounting Method: Here performance is evaluated from the monetary returns yieldsto his or her organization. Cost to keep employee, and benefit the organization derives isascertained. Hence it is more dependent upon cost and benefit analysis.
12. Comparative Evaluation Method (Ranking & Paired Comparisons): These arecollection of different methods that compare performance with that of other co-workers. Theusual techniques used may be ranking methods and paired comparison method.
Ranking Methods: Superior ranks his worker based on merit, from best to worst. However
Performance Appraisal Methods | Human Resources Management
http://corehr.wordpress.com/performance-management/performance-appraisal-methods/[09-11-2014 17:46:37]
how best and why best are not elaborated in this method. It is easy to administer andexplanation.
Paired Comparison Methods: In this method each employee is rated with anotheremployee in the form of pairs. The number of comparisons may be calculated with the help ofa formula as under.
N x (N-1) / 2
Future Oriented Methods
1. Management By Objectives: It means management by objectives and the performance israted against the achievement of objectives stated by the management. MBO process goes asunder.
Establish goals and desired outcomes for each subordinate
Setting performance standards
Comparison of actual goals with goals attained by the employee
Establish new goals and new strategies for goals not achieved in previous year.
Advantage – It is more useful for managerial positions.
Disadvantages – Not applicable to all jobs, allocation of merit pay may result in setting short-term goals rather than important and long-term goals etc.
2. Psychological Appraisals: These appraisals are more directed to assess employeespotential for future performance rather than the past one. It is done in the form of in-depthinterviews, psychological tests, and discussion with supervisors and review of other evaluations.It is more focused on employees emotional, intellectual, and motivational and other personalcharacteristics affecting his performance. This approach is slow and costly and may be useful forbright young members who may have considerable potential. However quality of these appraisalslargely depend upon the skills of psychologists who perform the evaluation.
3. Assessment Centers: This technique was first developed in USA and UK in 1943. Anassessment center is a central location where managers may come together to have theirparticipation in job related exercises evaluated by trained observers. It is more focused onobservation of behaviors across a series of select exercises or work samples. Assessees arerequested to participate in in-basket exercises, work groups, computer simulations, role playingand other similar activities which require same attributes for successful performance in actualjob. The characteristics assessed in assessment center can be assertiveness, persuasive ability,communicating ability, planning and organizational ability, self confidence, resistance to stress,energy level, decision making, sensitivity to feelings, administrative ability, creativity and mentalalertness etc. Disadvantages – Costs of employees traveling and lodging, psychologists, ratingsstrongly influenced by assessee’s inter-personal skills. Solid performers may feel suffocated insimulated situations. Those who are not selected for this also may get affected.
Advantages – well-conducted assessment center can achieve better forecasts of futureperformance and progress than other methods of appraisals. Also reliability, content validity andpredictive ability are said to be high in assessment centers. The tests also make sure that thewrong people are not hired or promoted. Finally it clearly defines the criteria for selection andpromotion.
4. 360-Degree Feedback: It is a technique which is systematic collection of performancedata on an individual group, derived from a number of stakeholders like immediate supervisors,team members, customers, peers and self. In fact anyone who has useful information on how anemployee does a job may be one of the appraisers. This technique is highly useful in terms ofbroader perspective, greater self-development and multi-source feedback is useful. 360-degreeappraisals are useful to measure inter-personal skills, customer satisfaction and team buildingskills. However on the negative side, receiving feedback from multiple sources can beintimidating, threatening etc. Multiple raters may be less adept at providing balanced andobjective feedback.
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Performance Appraisal Methods | Human Resources Management
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