performance apprls

7/30/2019 Performance Apprls

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PERFOMANCE APPRAISAL


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According to Flippo, a prominent personality in the field of Human resources,

"performance appraisal is the systematic, periodic and an impartial rating of an

employees excellence in the matters pertaining to his present job and his potentialfor a better job.

Objectives

1 To review the performance of the employees over a given period of time.

2 To judge the gap between the actual and the desired performance.

3. To help the management in exercising organizational control.

4. Helps to strengthen the relationship and communication between superior

subordinates and management employees.

5. To diagnose the strengths and weaknesses of the individuals so as to identify the

training and development needs of the future.


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PROCESS OF PERFOMANCE APPRAISAL

ESTABLISHING PERFORMANCE STANDARDS

The first step in the process of performance appraisal is the setting up of the

standards which will be used to as the base to compare the actual performance of theemployees.

This step requires setting the criteria to judge the performance of the employees assuccessful or unsuccessful and the degrees of their contribution to the organizationalgoals and objectives

The standards set should be clear, easily understandable and in measurable terms..

COMMUNICATING THE STANDARDS

Once set, it is the responsibility of the management to communicate the standards toall the employees of the organization.

This will help them to understand their roles and to know what exactly is expectedfrom them.


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MEASURING THE ACTUAL PERFORMANCE

It is a continuous process which involves monitoring the performance throughout

the year.

This stage requires the careful selection of the appropriate techniques of

measurement, taking care that personal bias does not affect the outcome of the

process and providing assistance rather than interfering in an employees work.

COMPARING THE ACTUAL WITH THE DESIRED PERFORMANCE

The actual performance is compared with the desired or the standard performance.

The comparison tells the deviations in the performance of the employees from the

standards set.


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DISCUSSING RESULTS

The result of the appraisal is communicated and discussed with the employees on

one-to-one basis.

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.DECISION MAKING

The last step of the process is to take decisions which can be taken either to

improve the performance of the employees, take the required corrective actions,

or the related HR decisions like rewards, promotions, demotions, transfers etc.


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TECHNIQUE OF PERFOMANCE APPRAISAL

TRADITIONAL METHODS

ESSAY APPRAISAL METHOD

This traditional form of appraisal, also known as " F ree Form method"involves a descriptionof the performance of an employee by his superior.

The description is an evaluation of the performance of any individual based on the facts andoften includes examples and evidences to support the information

. A major drawback of the method is the inseparability of the bias of the evaluator.

STRAIGHT RANKING METHOD

This is one of the oldest and simplest techniques of performance appraisal. In this method, theappraiser ranks the employees from the best to the poorest on the basis of their overall

performance.

PAIRED COMPARISON

A better technique of comparison than the straight ranking method, this method compareseach employee with all others in the group, one at a time. After all the comparisons on thebasis of the overall comparisons, the employees are given the final rankings.

Example:

Bob > Carol; Bob > Ted; Bob > Alice

Carol > Ted; Carol > Alice

Ted > Alice


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FIELD REVIEW

In this method, a senior member of the HR department or a training officerdiscusses and interviews the supervisors to evaluate and rate their respective

subordinates A major drawback of this method is that it is a very time consuming method. But

this method helps to reduce the superiors personal bias.

CHECKLIST METHOD

The rater is given a checklist of the descriptions of the behaviour of the employeeson job.

The checklist contains a list of statements on the basis of which the rater describesthe on the job performance of the employees.

Eg:Items from a behavioral checklist for a salesperson's job

Instructions to the rater

1. Calls on customers immediately after hearing of any complaints

2. Discusses complaints with customer

3. Gathers facts relevant to customers' complaints


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4. Transmits information about complaints back to customers and resolves problems totheir satisfaction

5. Plans each day's activities ahead of time

6. Lays out broad sales plans for one month ahead

7. Gathers sales information from customers, other salesmen, trade journals, and otherrelevant sources

GRAPHIC RATING SCALE

In this method, an employees quality and quantity of work is assessed in a graphicscale indicating different degrees of a particular trait .

The factors taken into consideration include both the personal characteristics and

characteristics related to the on the job performance of the employees


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Examples of a 5-point scale:

5 = Excellent

4 = Very satisfactory

3 = Satisfactory2 = Unsatisfactory

1 = Very unsatisfactory

5 = Greatly exceeds standards

4 = Exceeds standards

3 = Meets standards2 = Below standards

1 = Far below standards

FORCED DISTRIBUTION

Forced distribution is a form of comparative evaluation in which an evaluator rates

subordinates according to a specified distribution.


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Evaluator must place a fixed percentage of employees in each performance

category

Example:

10% must be rated 5 = Excellent

25% must be rated 4 = Very satisfactory

45% must be rated 3 = Satisfactory

15% must be rated 2 = Unsatisfactory

5% must be rated 1 = Very unsatisfactory

MODERN METHODS

360 degree feedback, also known as 'multi-rater feedback', is the most

comprehensive appraisal where the feedback about the employees performance

comes from all the sources that come in contact with the employee on his job.

360 degree respondents for an employee can be his/her peers, managers (i.e.

superior), subordinates, team members, customers, suppliers/ vendors etc

Some of the organizations following it are Wipro, Infosys, and Reliance Industries

etc


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360 degree appraisal has four integral components:

1. Self appraisal

2. Superiors appraisal3. Subordinates appraisal

4. Peer appraisal.


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MANAGEMENT BY OBJECTIVES

The concept of Management by Objectives (MBO) was first given by Peter

Druckerin 1954.

Management by objectives (MBO) involves setting specific measurable goals with

each employee and then periodically discussing his/her progress toward these

goals

The essence of MBO is participative goal setting, choosing course of actions anddecision making. An important part of the MBO is the measurement and the

comparison of the employees actual performance with the standards set.

Ideally, when employees themselves have been involved with the goal setting and

the choosing the course of action to be followed by them, they are more likely to

fulfill their responsibilities.


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UNIQUE FEATURES AND ADVANTAGES OF MBO

Some of the important features and advantages of MBO are:

Clarity of goals With MBO, came the concept of SMART goals i.e. goals that are:

Specific

Measurable

Achievable

Realistic, and

Time bound.

The goals thus set are clear, motivating and there is a linkage between

organizational goals and performance targets of the employees.


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The focus is on future rather than on past. Goals and standards are set for the

performance for the future with periodic reviews and feedback.

Motivation Involving employees in the whole process of goal setting andincreasing employee empowerment increases employee job satisfaction and

commitment.

Better communication and Coordination Frequent reviews and interactions

between superiors and subordinates helps to maintain harmonious relationshipswithin the enterprise and also solve many problems faced during the period.


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ASSESSMENT CENTRES

Assessment centre refers to a method to objectively observe and assess the

people in action by experts or HR professionals with the help of various

assessment tools and instruments

An assessment centre typically involves the use of methods like social/informal

events, tests and exercises, assignments being given to a group of employees to

assess their competencies and on the job behaviour and potential to take higher

responsibilities in the future.

Generally, employees are given an assignment similar to the job they would beexpected to perform if promoted.

The trained evaluators observe and evaluate employees as they perform the

assigned jobs and are evaluated on job related characteristics.


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BEHAVIOURALLY ANCHORED RATING SCALES(BARS)

Development of BARS evaluations requires an in-depth understanding of each

positions key tasks, along with an understanding of the full range of behaviorsdisplayed by individuals in carrying out such tasks.

The evaluator rate these behaviors for each employee; then he anchor each

behavior to points on a rating scale, which indicates whether the behavior isexceptional, excellent, fully competent, or unsatisfactory. The result is a rating

scale for each task.

For example, in a hypothetical position of human resources coordinator, one of the

job holders responsibilities is to complete status change notices, which update the

personnel system regarding changes in employee pay, position, title, supervisor,

and personal data. The BARS method for this specific task in this specific job could

read as follows:


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5 Exceptional performance: Accurately completes and submits all status change

notices within an hour of request.

4 Excellent performance: Verifies all status change notice information with

requesting manager before submitting.

3 Fully competent performance: Completes status change notice forms by the

end of the workday.

2 Marginal performance: Argues when asked to complete a status change

notice.

1 Unsatisfactory performance: Says status change notice forms have been

submitted when they havent.


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HUMAN RESOURCES ACCOUNTING

Human resources are valuable assets for every organization. Human resource

accounting method tries to find the relative worth of these assets in the terms of

money.

In this method the performance of the employees is judged in terms of cost and

contribution of the employees.

The cost of employees include all the expenses incurred on them like theircompensation, recruitment and selection costs, induction and training costs etc

whereas their contribution includes the total value added (in monetary terms).

The difference between the cost and the contribution will be the performance of

the employees
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