Performance Evaluation 1
PERFORMANCE EVALUATION
Performance Evaluation 2
PERFORMANCE EVALUATION
JW Mariot – for Managers “Leadership
Performance Process”– setting business goals at the beginning of
year– mid year review of progress &
competencies – final review of achievement & competencies
For Staff - linear rating scales of attributres
by boss student project 2004
What is performance evaluation
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PERFORMANCE EVALUATION
• Formal Structured System
• Of measuring and evaluating
employee’s – Job– Related behaviours (includes competencies)– Outcomes (results)
• To discover how and why the employee is presently performing
Why – PE?
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WHY PERFORMANCE EVALUATION?
• Performance / Behaviour Management /
Improvement
• Rewards????? Differing systems
• Confirmation / Promotion
• Training and Development
• Developing a Leadership Pipeline - Potential
assessment - career planning
• Communication/ Feedback / dialogue
Methods of PE
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PERFORMANCE EVALUATION METHODS - Some Past oriented methods
• Graphic rating scale - with / without
weightages (problems in PE)
• Ranking - alternation ranking
- paired comparison
• Forced choice
• Critical incident method
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PERFORMANCE EVALUATION METHODS - Past oriented methods
• Behaviourally anchored rating scale
• Essay method
• Performance tests
• Field review method
Companies find Past Oriented Methods inadequaate – PE at FEDEX
business world sept 1 2003 7
PERFORMANCE MANAGEMENT at FEDEX
• goal for India in 2003 was ‘Introduce
packaging solutions for Indian Exporters’
• A solution called ‘Fedex Solutions for the
Fashion world’ was introduced
• Every member of the Marketing Managers
team (whose target it was) broke down the
objective into specific personal objectives in
four different waysSPEED at TCS
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PERFORMANCE MANAGEMENT SYSTEMS - MBO (future oriented)
• Performance Agreement on Goals – SMART– End Result or Developmental (60/40)
– Dovetailed with organisation goals
• Action Plan
• Periodic Review – performance managed around the year
• Role of Superior – Party to agreement – + Facilitator– + Guide/coach
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On Line Performance Management Systems…
SAP Labs India – managers keep defining
Objectives for employees – depending on
changes in project objectives – differences
sorted out through mutual discussion
ISPAT Industries has on line PMSS
TCS has SPEED
Syngyny Systems develops PM and Variable Pay
software solutions
Steps in PE
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STEPS IN PERFORMANCE EVALUATION
1. Define job and job expectations
2. Design appraisal programme
3. Implement - Problems to be solved
4. Interpret data• Lack of standards – unrealistic standards• Poor measures of performance• Failure to apply evaluation data
Designing appraisal programme
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DESIGNING THE APPRAISAL PROGRAMME
1. Who rates?
2. What is rated?
3. What method?
4. When is rating done?
Multiple sources
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Multiple Sources of Feedback – 360 Degrees
1. Done systematically via interviews /
questionnaires
2. All important stakeholders
3. Formalises people’s judgment on the
basis of interactions
4. Data collected and feedback given
Why 360 degrees
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Multiple Sources of Feedback – 360 DegreesWhy???
1. Perspective of all stakeholders - not
just the immediate superior.
2. Brings out strengths and weaknesses
in managerial style
3. Forces inflexible managers to change
Problems with 360 degree feedback
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Limitations / Issues/ Problems with 360 Degrees Feedback
1. Can all stake holders always judge ? Ask for behaviour not evaluation
2. Can be detrimental to team-work???
3. Issue of confidentiality
4. Report must be prepared
5. Different forms for different assessors
An example
Is it needed every year???
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360 Degrees Feedback- An Example
Example – from colleague assessment
Questionnaire All items numerically rated -very little to great deal
36. He makes decisions in the time they are needed
37. She publicly supports the actions and decisions of the team
38. By listening, he actively seeks to understand the needs, perspectives and motivations of others - even if these are different from his ownThe appraisal review
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The Appraisal Review - Purpose
1. Measurement
2. Feedback
3. Positive Re-inforcement
4. Exchange of views
5. Agreement
Some guidelines
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The Appraisal Review - Some Guidelines
1. Create supportive atmosphere
2. Keep the whole year under review
3. Be sensitive to natural responses to criticism
• Anger / aggression
• Denial
• Retreating
4. Listen - be open to criticism
5. Test Understanding - Aim for agreementWhy PE fails
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Why Performance Evaluation Fails
1. Supervisor plays judge and helper
2. Too many objectives cause confusion
3. Unresolved appraisal problems
4. Appraiser training
5. Appraisee not receptive
6. Unwillingness of supervisor to give feedback
7. Defensive behaviour - fault finding
8. Depends on purpose
Balanced Score Card
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BALANCED SCORECARDIndian Management , August 2002
• A tool that helps Companies deploy
Strategy.
• Helps Companies describe their strategy
• Can be used for different reasons– Clarifying vision
– Validating strategy
– Aligning budgets to strategy
– Developing an enterprise Performance Mangement system
Company’s using it
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BALANCED SCORECARDIndian Management , August 2002
Companies Using It
Tata Steel
Indian Hotels
TCS
RPG Group Companies
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BALANCED SCORECARD Indian Management , August 2002
Offers a 4 layered perspective of the
state of strategy implementation down
the line
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BALANCED SCORECARD –Indian Management , August 2002
Layer 1 - Financial Perspective
Financial expectations of the shareholders
that the strategy must meet.
ROCE - a key measure– New revenue sources– Customer profitability– Cost per unit– Asset utilisation
Customer perspective
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BALANCED SCORECARD –Indian Management , August 2002
Layer 2 – Customer Perspective
What are the customer expectations that
must be met in order for shareholder
expectations to be met.
– Price, quality
– Time, relations, brand
– Function, service
internal. Process perspective
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BALANCED SCORECARD –Indian Management , August 2002
Layer 3 - Internal Processes
Needed in the Company to deliver
customer value
– Innovation processes
– Customer management processes
– Operations and logistics processes
– Regulatory and environmental processes
Learning and growth
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BALANCED SCORECARD –Indian Management , August 2002
Layer 4 - Learning and Growth
What are the organisational competencies,
Skills that the Company must create to
have a motivated work force that will enable
Achievement of overall vision and strategic goals
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BALANCED SCORECARD –Indian Management , August 2002
Layer 4 - Learning and Growth
• Strategic competencies
• Strategic technologies
• Culture and climate for action
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Rating Scales - Continuous Scale
0 5 10 15 20
No interest Careless Interested in Enthusiastic Joyous about in work Indifferent to work, accepts about job & work. His
instructions opinions co-workers advice soughtothers
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Rating Scales
DISCONTINUOUS SCALE
• Unsatisfactory – is a liability and makes no contribution
• Fair - minimal, barely meets contribution
• Good - meets basic requirement for retention
• Superior - definitely above norm and basic requirement
• Exceptional - distinctly and definitely outstanding - far above expectation
Problems in PE
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PROBLEMS IN PERFORMANCE EVALUATION (esp rating scales)
• Leniency
• Halo Effect
• Central Tendency
• Bias
• Primacy / Recency
• Spillover (previous years)
• Status of individual
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Forced Choice Description Method
Force rater to choose from paired statements - not
clear which is ‘desirable’
1 a) Works hard
b) works fast
2. a)shows initiative
b) responsive to customers
3. a) produces poor quality
b) lacks good work habits
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Critical Incident Method
Assumes that there are certain significant acts in each employee’s behaviour that make the difference
between success and failure.
Eg - Procurement Officer
• Discourtesy towards seller’s representative
• Helped buyer prepare difficult P.O.
• Failed to return important phone call
• Rejected an overpriced bid
• Discourtesy towards sellers representative
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Behaviourally Anchored Rating Scales - Past oriented methods
• A series of 5-10 vertical scales
• One scale for each dimension of performance (now you’d call it a competency)
• Each dimension anchored by behaviours identified by critical incident method
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BARS for a Fireman – Dimension – Knowledge of Fire Characteristics
High 76 Finds fire when no one else can
Correctly assesses best point of entry
5 Understands type of smoke as indicator of type of fire
Understands basic hydraulicsAvg 4
3 Cannot identify type of fire from colour of flame
2 Cannot identify location of fire
Low 1 Will not change firefighting strategy in spite of flashbacks and other signs …
business world sept 1 2003 34
4 Types of Objectives at FEDEX
– Customer objectives
communicating this service to customers via e-mail
– Internal processes required
co-ordinating with Fedex Packaging and Design and development lab at Memphis
– Financial objectives
– Skills and competencies the employee needs
to acquire to meet these objectives
express computer 35
2004 – Article on PE
Moksha Technologies, IT&T, Nucleus Software and Daksh eServices conduct additional quarterly assessments - different from traditional annual reviews because of
– shorter project cycles – continuous stress – Offers scope for mid course correction– People can’t keep personal
performance scorecard with annual system
– Business dynamics and goals may change during the year
express computer 36
2004 – Article on PE
• vMoksha Technologies – quarterly goal-setting and performance
reviews under its variable pay programme– annual reviews focus on developmental needs
and overall performance.
• Aptech Training - appraisal system identifies the star performers, solid citizens, the problem child, and accordingly an action plan is drawn.
• NetBase Computing’s quarterly performance reviews are linked to the ‘Company Bonus Plan’. The rating here determines an individual’s eligibility for bonus.
express computer 37
2004 – Article on PE
Techspan India - Individual Performance Development Review (IPDR), a six-monthly performance management initiative. • Individual Performance Review - directly
influences performance bonus payouts and increments
• Individual Development Review (IDR)- impacts career advancement
These are done sequentially The company also has a “Mini-IPR”, done mid-cycle, which serves as a “spot-check” for individuals and managers.
express computer 38
2004 – Article on PE
Aptech Training - comprehensive Member Assessment System named “Oasis”, which includes objective assessment and subjective impression. “We have developed a tool comprising two stages, seven levels and sixteen attributes. With the help of this tool we can predict an employee’s ability to perform, potential to grow, adaptability to change and integrity,” says Ajay Oberoi, vice president-human resources, Aptech Training. “Besides Oasis, we also use the assessment centre for appraising high potential members for faster growth under our internal selection schemes.”