Performance Appraisal: Performance Appraisal


Performance Appraisal: Performance Appraisal Performance Appraisal (PA) refers to all those procedures that are used to evaluate the personality performance potential of its group members


Objectives of Performance Appraisal: Objectives of Performance Appraisal Provide a basis for promotion/ transfer/ termination: Identify those employees who deserve promotion Or those who require lateral shift (transfer) or termination PA is used for career planning


Objectives of Performance Appraisal: Objectives of Performance Appraisal Enhance employees’ effectiveness by helping to identify their strengths and weaknesses and Inform them about expected levels of performance If employees understand their roles well, they are likely to be more effective on the job


Objectives of Performance Appraisal: Objectives of Performance Appraisal Identify training and development needs: Identifying training and development needs of employees is necessary to prepare them for meeting challenges in their current and future employment


Objectives of Performance Appraisal: Objectives of Performance Appraisal Aid in designing training and development programs: Identifying skills required to be developed would help in tailor- making training and development programs


Objectives of Performance Appraisal: Objectives of Performance Appraisal Remove work alienation: Counseling Employees corrects misconceptions which might result in work alienation


Objectives of Performance Appraisal: Objectives of Performance Appraisal Remove discontent: Identifying and removing factors responsible for workers’ discontent would motivate them for better work performance


Objectives of Performance Appraisal: Objectives of Performance Appraisal Develop inter-personal relationships: Relations between superior - subordinate can be improved through realization that each is dependent on the other for better performance and success


Objectives of Performance Appraisal: Objectives of Performance Appraisal Aid wage administration: Performance appraisal can help in development of scientific basis for reward allocation, wage fixation, incentives Improve communication: Performance appraisal serves as a mechanism for communication between superiors and subordinates


Process of Performance Appraisal: Process of Performance Appraisal Establish Performance Standards Performance standards serve as benchmarks against which performance is measured Standards should relate to the desired results of each job


Process of Performance Appraisal: Process of Performance Appraisal Communicate the Standards Performance appraisal involves at least two parties, the appraiser who does the appraisal and the appraisee whose performance is being evaluated


Process of Performance Appraisal: Process of Performance Appraisal Communicate the Standards The appraiser should prepare job descriptions clearly; help appraisee set his goals and targets; analyse results objectively; offer coaching and guidance to appraisee whenever required and reward good results The appraisee should be very clear about what he is doing and why


Process of Performance Appraisal: Process of Performance Appraisal Measure Actual Performance Performance measures, to be helpful must be easy to use, reliable and must report on the critical behaviors that determine performance


Measure Actual Performance: Measure Actual Performance Performance measures may be objective or subjective Objective performance measures are indications of job performance that can be verified by others and are usually quantitative


Measure Actual Performance: Measure Actual Performance Subjective performance measures are ratings that are based on the personal standards or opinions of those doing the evaluation and are not verifiable by others


Compare Actual performance with Standards and Discuss the Appraisal: Compare Actual performance with Standards and Discuss the Appraisal Actual performance may be better than expected and sometimes it may go off the track Whatever be the consequences, there is a way to communicate and discuss the final outcome


Taking Corrective Action: Taking Corrective Action Corrective action is of two types One puts out the fires immediately Other strikes at the root of the problem permanently


Performance Criteria: Performance Criteria In order to be effective, the criteria for performance appraisal should be genuinely related to success / failure in the job and should be amenable to objective judgement MBO is an example of performance-based appraisal approach that involves setting objectives and comparing performance against those objectives


Performance Criteria: Performance Criteria Objectives give greater freedom to both management and the employees in deciding how performance is to be measured


Benefits of Performance Appraisal: Benefits of Performance Appraisal For the appraisee Better understanding of his role in the organization—what is expected and what needs to be done to meet those expectations Clear understanding of his strengths and weaknesses to develop himself into a better performer in future


For the appraisee: For the appraisee Increased motivation, job satisfaction, and self-esteem Opportunity to discuss work problems and how they can be overcome Opportunity to discuss aspirations and any guidance, support or training needed to fulfil those aspirations Improved working relationships with supervisors


Benefits of Performance Appraisal: Benefits of Performance Appraisal For the Management Identification of performers and non-performers and their development towards better performance Opportunity to prepare employees for assuming higher responsibilities


For the Management: For the Management Opportunity to improve communication between the employees and management Identification of training and development needs Generation of ideas for improvements Better identification of potential and formulation of career plans


Benefits of Performance Appraisal: Benefits of Performance Appraisal For the Organization Improved performance throughout the organization Creation of a culture of continuous improvement and success Conveying the message that people are valued


Performance Appraisal - Individual Evaluation Methods : Performance Appraisal - Individual Evaluation Methods Confidential report Essay evaluation Critical incidents Checklists Graphic rating scale Behaviorally anchored rating scale Forced choice method MBO


Performance Appraisal - Multiple Person Evaluation Methods: Performance Appraisal - Multiple Person Evaluation Methods Ranking Paired comparison Forced distribution Other methods Performance tests Field review technique


Confidential Report: Confidential Report Descriptive report Prepared at the end of the year Prepared by the employee’s immediate supervisor The report highlights the strengths and weaknesses of employees Prepared in Government organizations Does not offer any feedback to the employee


Essay Evaluation: Essay Evaluation The rater is asked to express the strong as well as weak points of employee’s behavior The rater considers the employee’s : Job knowledge and potential Understanding of company’s programs, policies, objectives etc Relation with co-workers and supervisors Planning, organizing and controlling ability Attitude and perception


Essay Evaluation: Essay Evaluation This method has the following limitations: Highly subjective Supervisor may write biased essay Difficult to find effective writers A busy appraiser may write the essay hurriedly without assessing properly the actual performance of the worker If the appraiser takes a long time it becomes uneconomical from the view point of the firm


Critical Incident Technique : Critical Incident Technique Manager prepares lists of statements of very effective and ineffective behavior of an employee These critical incidents represent the outstanding or poor behavior of the employees The manager periodically records critical incidents of employee’s behavior


Critical Incident Technique : Critical Incident Technique Example: July 20 - Sales clerk patiently attended to the customers complaint. He is polite, prompt, enthusiastic in solving the customers’ problem July 20 - The sales assistant stayed 45 minutes beyond his break during the busiest part of the day. He failed to answer store manager’s call thrice. He is lazy, negligent, stubborn and uninterested in work


Critical Incident Technique : Critical Incident Technique Limitation of this technique are: Negative incidents may be more noticeable than positive incidents. Supervisors have a tendency to unload a series of complaints about incidents. Results in very close supervision which may not be liked by the employee. The recording of incidents may be a chore for the manager concerned who may be too busy or forget to do it.


Checklist: Checklist A checklist is a set of objectives or descriptive statements about the employee and his behavior. Under weighted checklist, value of each question may be weighted. Example: Is the employee really interested in the task assigned? Yes / No Is he respected by his colleagues? Yes / No


Graphic Rating Scale: Graphic Rating Scale A form is used to evaluate the performance of the employees A variety of traits may be used in this device, the most common being quality and quantity of work Easy to understand and use. Permits statistical tabulation of scores of employees


Behaviorally Anchored Rating Scale: Behaviorally Anchored Rating Scale Combination of rating scale and critical incidence Steps: Collect critical incidents Identify performance dimensions Reclassification of incidents Assigning scale values to incidents Producing the final instrument


Forced Choice Method: Forced Choice Method This method uses several sets of paired phrases, two of which may be positive and two negative The rater is asked to indicate which of the four phrases is the most and least descriptive of a particular worker Favorable qualities earn plus credit and unfavorable ones earn the reverse


Management by Objectives (MBO): Management by Objectives (MBO) MBO emphasizes collectively set goals that are tangible, verifiable, and measurable Focuses attention on goals rather than on methods Concentrates on Key Result Areas (KRA) Systematic and rational technique that allows management to attain maximum results from available resources by focusing on achievable goals


Key Elements Of MBO: Key Elements Of MBO Arranging organizational goals in a means-ends chain Engaging in joint goal setting This process has the following steps: Identify KRAs Define expected results Assign specific responsibilities to employees Define authority and responsibility relationship Conducting periodic progress review Conducting annual performance review


Multiple Person Evaluation Methods: Multiple Person Evaluation Methods Ranking method The evaluator rates the employee from highest to lowest on some overall criteria Paired comparison method Each worker is compared with all other employees in a group For several traits paired comparisons are made, tabulated and then rank is assigned to each worker This method is not applicable when the group is large


Forced Distribution Methods: Forced Distribution Methods The rater is asked to appraise the employee according to predetermined distribution scale. Two criteria used for rating are: job performance and promotability. A five point performance scale is also used without mentioning any descriptive statements. The worker is placed between two extremes of “good” and “bad” performance.


Group Appraisal : Group Appraisal Employee is appraised by a group of appraisers. The group consists of Immediate supervisor of the employee Other supervisors who have close contact with the employee’s work. Manager or head of the departments. Consultants or Clients


Field Review Technique : Field Review Technique The appraiser goes to the field and obtains the information about work performance of the employee by way of questioning the said individual, his peer group, and his superiors


360o Appraisal System: 360o Appraisal System It is a systematic collection and feedback of performance data on an individual or group, derived from a number of stakeholders Data is gathered and fed back to the individual participant in a clear way designed to promote understanding, acceptance and ultimately behavior


Appraisal Interview and Feedback - Let the Employee Know Where He Stands: Appraisal Interview and Feedback - Let the Employee Know Where He Stands To help employees do a better job by clarifying what is expected of them To plan opportunities for development and growth To strengthen the superior-subordinate working relationship by developing mutual agreement of goals To provide an opportunity for employees to express themselves on performance related issues