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CHAPTER : 7
PERFORMANCE APPRAISAL
OBJECTIVES OF THE CHAPTERConcept of Performance AppraisalNeed for Performance AppraisalThe Appraisal ProcessPerformance Appraisal Methods and typesThe Appraisal InterviewProblems and solutions in Performance
AppraisalUses of Performance AppraisalManagerial careerRole of counseling in HRM
CONCEPT OF PERFORMANCE APPRAISAL
Performance appraisal can be defined as the process of evaluating the performance of an employee and communicating the results of the evaluation to him/her for the purpose of rewarding or developing the employee.
OBJECTIVES OF PERFORMANCE APPRAISAL
Facilitates optimization of employee performance
Helps taking administrative decisions relating to payment of incentives, promotions etc.
Helps identify training needs
THE APPRAISAL PROCESS
Determining the standards for Performance appraisal
Measuring performance againstpre-determined standards
Actual process ofmeasurement
Communicating the results to the employee concerned
Implementation
THE APPRAISERS
Different appraisers
Self-Appraisal SubordinatesSupervisors Peers Customers/
Clients
PERFORMANCE APPRAISAL METHODS
Traditional MethodsManagement by ObjectivesGraphic rating scaleWork standards approachEssay appraisalCritical incident methodForced choice ratingPoint allocation methodRanking methodsChecklist
Modern MethodsBehaviorally Anchored
Rating Scale (BARS)360 degree
performance appraisalTeam AppraisalsBalanced scorecard
method
TRADITIONAL METHODS
Management by Objectives (MBO)The main aspects of MBO are clear and well-defined
goals, a definite time-span to achieve the goals, an action plan and finally, timely and constructive feedback.
Graphic Rating Method In this method, the rater rates the employees on factors
like quantity and quality of work, job knowledge, dependability, punctuality, attendance etc.
Work Standards Approach In this method, work standards are set based on the
average output of a typical employee or by benchmarking against the work standards of a competitor in a similar business.
Essay Appraisal In the method, the appraiser prepares a document
describing the performance of an employee.
Critical Incident MethodThe appraiser makes note of all the critical incidents
that reflect the performance or behavior of the employee during the appraisal period.
Forced Choice Rating MethodThe appraiser assigns ranks to different attributes of the
employee and later the HR department, applies the weights and arrives at a score which is the final appraisal score.
Point Allocation Method In this method, the appraiser has to allocate points to
different members in his team and the best performer gets the highest score.
ChecklistThe rater has to respond ‘Yes’ or ‘No’ to a set of
questions which assess the employee's performance and behavior.
Ranking Methods
Alternation:The appraiser ranksall his employees
from the most valuableto the least valuable.
Paired comparison:Every employee in the group is compared withevery other employee in
the group. The Employeewho is rated better in
each pair the maximum times is the best
employee .
Forced Distribution:In this method, employees are
categorized as “Top”,“Standard” and
“Bottom”. This methodhelps the organization
get rid of non-performers.
MODERN METHODS
Behaviorally Anchored Rating Scales (BARS) BARS concentrates on the behavioral traits demonstrated
by the employees instead of his actual performance. It combines the benefits of critical incidents and graphic rating scale by anchoring a scale with specific behavioral examples of good or poor performance.
It is time consuming and expensive method. The behaviors used are more activity oriented than result oriented.
.
360 degree Performance Appraisal
In a 360 degree appraisal system, the employee's performance is evaluated by his supervisor, his peers, his internal/external suppliers and his subordinates. It is a systematic collection of performance data on an individual or group, derived from a number of stakeholders, team members, customers, peers, and self.
It provides a broader perspective about an employee’s performance by facilitating self-development of employees.
This appraisal is effective in identifying and measuring interpersonal skills, customer-satisfaction and team-building skills.
Team Appraisals In the team appraisal method, the individual team
members evaluate their colleagues in the team and provide feedback.
Balanced ScorecardThe implementation of balanced scorecard involves
formulating a strategy, and deciding what each employee needs to do to achieve the objectives based on the strategy.
In the HR Scorecard, individual responsibilities are assigned based on the strategy and the achievements are tracked.
THE APPRAISAL INTERVIEW
Challenges of Appraisal InterviewThe organizational cultureThe relationship between the employee and his bossThe maturity level of the individualsAn apprehensive employeeA wary appraiserA biased appraiser Inexperience
PITFALLS IN PERFORMANCE APPRAISAL
Halo effectThe appraiser appraises the employee based on one
single characteristic.
Leniency effectThe appraiser gives high ratings and only positive
feedback to the appraisee, irrespective of his actual performance.
Stringency effectThe appraiser being very strict in rating the employees.
Recency effectThis occurs when the recent performance of the
appraisee dominates the appraisal.
Primacy effectThe appraiser tends to be influenced by the behavior
exhibited in the early stages of the appraisal period.
Central tendency effect It is the tendency of the appraiser to rate most of the
appraisers in the middle of the performance scale.
Stereotyping It involves judging someone based on the group he
belongs to and the appraiser's perception of the group.
CultureThe culture of the organization or the country can
influence the appraiser to rate the appraisee in a particular way.
Perceptual setThe appraiser might have an expectation level which
might distort the perception and judgment of actual performance.
Fundamental attribution errorHere, the appraiser underestimates the influence of
external factors and overestimates the influence of internal factors while judging the performance.
USES OF PERFORMANCE APPRAISAL
To determine the training and development needs
It forms the basis for compensation management
It forms basis for transfers and promotionsIt helps in succession planning
ETHICS IN PERFORMANCE APPRAISAL
The employees of the organization must be convinced about the effectiveness
Making the ratings more measurable and quantifiable
Assuring and maintaining the confidentiality of the appraisal
Managerial Career
Career development is important for companies to create and sustain a continuous learning environment
The biggest challenge companies face is how to balance advancing current employees’ careers with simultaneously attracting and acquiring employees with new skills
The growing use of teams is influencing the concept of careerse.g., project careers
What Is Career Management?
Career managementCareer management is the process through which employees:Become aware of their own interests, values,
strengths, and weaknessesObtain information about job opportunities
within the companyIdentify career goalsEstablish action plans to achieve career goals
Comparison of Traditional Careerand Protean Career:
DimensionDimension Traditional CareerTraditional Career Protean CareerProtean Career
Goal Promotions
Salary increase
Psychological success
Psychological contract Security for commitment Employability for flexibility
Mobility Vertical Lateral
Responsibility for Management
Company Employee
Pattern Linear and expert Spiral and transitory
Expertise Know how Learn how
Development Heavy reliance on formal training
Greater reliance on relationships and job experiences
The career management process:
Self-Assessment
Reality Check
Goal SettingAction
Planning
Components of the Career Management Process: (1 of 2)
Self-AssessmentUse of information by employees to determine
their career interests, values, aptitudes, and behavioral tendencies
Often involves psychological tests
Reality CheckInformation employees receive about how the
company evaluates their skills and knowledge and where they fit into company plans
Components of the Career Management Process: (2 of 2)
Goal SettingThe process of employees developing short-
and long-term career objectivesUsually discussed with the manager and written
into a development plan
Action PlanningEmployees determining how they will achieve
their short- and long-term career goals
Managers’ Role in Career Management
Roles Responsibilities
Coach Probe problems, interests, values, needsListenClarify concernsDefine concerns
Appraiser Give feedbackClarify company standardsClarify job responsibilitiesClarify company needs
Advisor Generate options, experiences, and relationshipsAssist in goal settingProvide recommendations
Referral agent Link to career management resources
Follow up on career management plan
Company’s Role in Career Management
Companies are responsible for providing employees with the resources needed to be successful in career planning:Career workshopsInformation on career and job opportunitiesCareer planning workbooksCareer counselingCareer paths
COUNSELINGCOUNSELLING IS A THERAPEUTICPROCESS OF
PROVIDING HELP ANDSUPPORT TO PEOPLE TO FACE AND SAIL THROUGH DIFFICULT TIMES INLIFE.
IT HELPS PEOPLE TO SEE THINGS FROM A DIFFERENT VIEWPOINT AND ENCOURAGE THEM TO DRAFT THEIR ACTION PLAN
WHEN
Unrealistic TargetsExcessive WorkloadAbsenteeism and Late ComingLack of awareness of policies
&proceduresPerformance IssuesSlipping DeadlinesCareer Problems
HOWListen to problems/Address IssuesProvide Feedback and help counselee to see a
different view point Investigate problems/mattersAvoid word of mouth and see the root cause with
evidenceSuggest/Recommend solutionsObserve behavior and clarify expectationsDetermine right course of action and reach Draft plan of action and follow up
COUNSELING SKILLSActive ListeningAppropriate Body LanguageIntelligent QuestioningProblem SolvingConnecting & Reflecting BackMutual InfluencingReading Non verbal BehaviorsNot imposing superiority or patronageConcluding & Recommending