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Performance Appraisal

Date post: 18-Nov-2014
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INTRODUCTIONPerformance appraisal is a systematic and objective way of evaluating both work related behavior and potential of employees. OR Performance Appraisal is the process of assessing the performance and progress of an employee or a group of employees on a given job and his / their potential for future development. It consists of all formal procedures used in the working organizations to evaluate personalities, contributions and potentials of employees.

Features of performance appraisalIt is a systematic process, essentially involving three steps: set work standards, assess employee's performance relative to these standards, and offer feedback to the employee so that he or she can eliminate deficiencies and improve performance The appraisal is carried out periodically according to a definite plan It is not a past oriented activity. The intention is not to put poor performers in a spot. Instead, it shows employees where things have gone wrong, how to set things in order and deliver superior performance using their potential fully The focus of appraisals is on employee growth and development. It forces managers to be coaches rather than judges.

Compensation decisions

Personal growth and development

Promotion decisions

Feedback to the employee

Training and development programs

Benefits of performance appraisalEmployer perspective [Administrative uses] Despite imperfect measurement techniques, individual differences in performance can make a difference to company performance. Documentation of performance appraisal and feedback may be required for legal defense. Appraisal offers a rational basis for constructing a bonus or merit system.

Appraisal dimensions and standards can help to implement strategic goals and clarify performance expectations. Employee perspective [developmental purposes] Individual feedback helps people to rectify their mistakes and get ahead, focusing more on their unique strengths.

Assessment and reorganization of performance levels can motivate employees to improve their performance.

What is to be appraised?The content to be appraised is determined on the basis of job analysis. Usually it comprises of: Behaviors, including observable physical actions, movements Objectives which measure job related results Traits which are measured in terms of personal characteristics

Who will appraise? Supervisors Self appraisal

When to appraise?Conducted informally Carried out systematically at regular intervals, sticking to a definite plan

The Performance Appraisal ProcessEstablish performance standards

Communicate the standards

Measure actual performance

Compare actual performance with standards and discuss the appraisal

APPRAISAL METHODS

TRADITIONAL METHODS

MODERN METHODS

CONFIDENTIAL REPORT FREE FORM OR ESSAY STRAIGHT RANKING PAIRED COMPARISIONS FORCED DISTRIBUTION GRAPHIC RATING SCALES CHECKLIST CRITICAL INCIDENTS GROUP APPRAISAL FIELD REVIEW

ASSESSMENT CENTER HRA BARS RATING THROUGH MBO 360-Degree feedback

CONFIDENTIAL REPORTTraditional form of appraisal used in most government organizations. Confidential report is a report prepared by the employee's immediate superior. It covers the strengths and weaknesses, main achievements and failures, personality and behavior of the employee. It is a descriptive appraisal used for promotions and transfers of employees.

FREE FORM/ESSAY METHODThe evaluator writes a short essay on the employee's performance on the basis of overall impression. It can provide a good deal of information about the employee especially if the evaluator is asked to give examples of each one of his judgments. This method may be appropriate for assessing senior executives where the number involved is small.

STRAIGHT RANKING METHODThe evaluator assigns relative ranks to all the employees in the same work unit doing the same job. Employees are ranked from the best to the poorest on the basis of overall performance. The relative position of an employee is reflected in his numerical rank. It is time saving and a comparative evaluation technique of appraisal.

PAIRED COMPARISIONS METHODEach employee is compared with all the others in pairs one at a time. The number of times an employee is judged better than the others determines his rank. Comparison is made on the basis of overall performance. The number of comparisons to be made can be decided on the basis of the following formula: N (N-1) / 2, where N is the number of persons to be compared.

FORCED DISTRIBUTION METHODThe rater is required to distribute his ratings in the form of a normal frequency distribution. The purpose is to eliminate the rater's bias of central tendency. Here also ranking technique is used. This method is highly simple to understand and easy to apply. It helps to reduce bias involved in straight ranking and paired comparisons.

GRAPHIC RATING SCALESIt is a numerical scale indicating different degrees of a particular trait. The rater is given a printed form for each employee to be rated. The form contains several characteristics relating to the personality and performance of employees. The rater records his judgment on the employee's trait on the scale. The numerical points given to an employee are added up to find out his overall performance.

An illustration of graphic rating scale:

CHECKLIST METHODIt is a list of statements that describe the characteristics and performance of employees on the job. The rater checks to indicate if the behavior of an employee is positive or negative to each statement. The performance of an employee is rated on the basis of number of positive checks.

CRITICAL INCIDENTS METHODThe supervisor keeps a written record of critical (either good or bad) events and how different employees behaved during such events. The rating of an employee depends on his positive / negative behavior during these events. This method helps to avoid vague impressions and general marks as the rating is based on actual records of behavior / performance. The illustration is given in the next slide.

GROUP APPRAISAL METHODA group of evaluators assesses employees. This group consists of the immediate supervisor of the employee, other supervisors having close contact with the employee's work, head of the department and a personnel expert. The group determines the standards of performance for the job, measures actual performance of an employee, analyses the causes of poor performance and offers suggestions for improvements in future.

FIELD REVIEW METHODA training officer from the personnel department interviews line supervisors to evaluate their respective subordinates. The interviewer prepares in advance the questions to be asked. By answering these questions a supervisor gives his opinions about the level of performance of his subordinate, the subordinate's work progress, his strengths and weaknesses, promotion potential, etc.

ASSESSMENT CENTRE METHODAssessment centre is a group of employees drawn from different work units. These employees work together on an assignment similar to the one they would be handling when promoted. Evaluators observe and rank the performance of all the participants. It generally measures interpersonal skills, communicating ability, ability to plan and organize etc.

HUMAN RESOURCE ACCOUNTING METHODPerformance is judged in terms of costs and contributions of employees. Costs of human resources consist of expenditure on HR planning, recruitment, selection, induction, training, compensation, etc. Contribution of human resources is the money value of labor productivity or value added by human resources. Difference between cost and contribution will reflect the performance of employees.

BEHAVIOURLY ANCHORED RATING SCALE (BARS)Combines graphic rating scales with critical incidents method. Descriptions of various degrees performance dimensions. of behavior relating to specific

The rater records observable job behavior of an employee and compares these observations with BARS. The illustration is given in the next slide.

Steps For Constructing BARSIdentify critical incidents Select performance dimensions Retranslate the incidents Assign scale to incidents Develop final instrument

APPRAISAL BY MBO (Management by Objectives)The concept of management by objectives (MBO) was developed by Peter Drucker in 1954. A process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual's major areas of responsibility in terms of results expected of him and use these measures as guides for operating the unit and assessing the contributions of each of its members.

360 DEGREE FEEDBACK360-degree feedback is feedback that comes from all around an employee. "360" refers to the 360 degrees in a circle, with an individual figuratively in the center of the circle. Feedback is provided by subordinates, peers, and supervisors. The results from 360-degree feedback are often used by the person receiving the feedback to plan training and development. Results are also used by some organizations in making administrative decisions, such as pay or promotion.

FACTORS THAT CAN DISTORT APPRAISALS1) LENIENCY ERROR POSITIVE- A positive leniency error overstates performance, giving the individual a higher appraisal. Evaluators are positively lenient in their appraisal. NEGATIVE- It understates performance, giving the individual a lower appraisal.

2) HALO ERROR Tendency to rate high or low on all factors due to the impression of a high or low rating on some specific factor. A method to counter the problem, which can be used where there is more than one person to be evaluated, is to have the evaluator appraise all employees on each dimension before going on the next dimension.

3)SIMILARITY ERROR Evaluators rate people in the same way that the evaluators perceive themselves. Example- The evaluator who perceives himself as aggressive may evaluate others by looking for aggressiveness. Those who demonstrate this characteristic tend to benefit, while others are penalized. This error would tend to wash out if the same evaluator appraised all the people in the organization.

4)LOW APPRAISER MOTIVATION If the evaluator knows that a poor appraisal could significantly hurt the employees promotion or a salary increase, the evaluator may be reluctant to give a realistic appraisal. It is more difficult to obtain accurate appraisals when important rewards depend on the results.

5)CENTRAL TENDENCY The reluctance to make extreme ratings; the inability to distinguish between and among ratees; a form of range restriction. Example- If a manager rates all subordinates as 3, on a scale of 1 to 5, then no differentiation among the subordinates exists. Failure to rate subordinates as 5, for those who deserve that rating, and as 1, if the case warrants it, will only create problems.

SUGGESTIONS FOR IMPROVED PERFORMANCE APPRAISALS Basing appraisals on accurate and current job descriptions Ensuring that appraisers have adequate knowledge and direct experience of the employees performance Providing ratings via aggregated anonymous feedback when multiple sources of information are used Incorporating performance appraisals into a formal goal setting system Offering adequate support and assistance to employees such as professional development opportunities in order to improve their performance Conducting appraisals on a regular basis (at least two times a year) rather than annually.


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