Employee Performance Evaluation
The purposes can be divided into
two categories.
1)Management Purpose
2)Informative Purpose
Management purposes
These purposes can be grouped into
two sub categories:
i)Administrative purpose
ii)Development purpose
Administrative purpose
1.Human Power Planning
Human power planning is to
estimate HR supply. Estimating HR
One of the steps involves auditing
current HR, which means assessing
characteristics of current employees
so as to develop skill inventories and
management inventories which,
catalogues competences of each
existing employee. To develop these
inventories PE information is
needed.
2.Reward Management
PE information is essential to make
rewards (wages, salaries, incentives,
etc.) decision. Examples, of some
concerns,
*Should pay increments be paid to
employees at the end of the certain
period or not?
*If increments are paid, how much
should be paid?
*Should performance incentives be
paid?
3.Selection
Several methods of selection are
used when selecting applicants to fill
vacancies. For effective and efficient
selection, the methods used in
selecting people should be validated
and for validation purpose it is
necessary to evaluate how well
employees are performing the jobs.
4.Hiring
5.Management of Labour -
Management relationship
PE is an important factor that
contributes to labour - management
relationship significantly. If PE has
right attnbiTtes for fair and accurate
evaluation it will minimize evaluator
errors, inadequate feedback, unfair
promotions, lay-offs and transfers
and inequitable and inadequate
distribution of rewards.
Consequently grievances and
conflicts are minimized and it will
enhance the relationship between
labour (union and workers) and
management.
6.Management of promotions
7.Administration of transfers
8.Discipline administration
Development purpose
1.Training
It is essential to identify needs of
employees before developing a
training programme. PE is an
effective source of identifying
performance deficiencies of
employees that are mostly training
needs of the employees.
2.Success of training
One way of determining the success
of a training programme is through
an assessment of job behavior of an
employee before and after the
training. PE is used to assess
employees job behavior.
3.Proper direction
It is possible for a superior to obtain
information through PE, which is
useful for guiding and advising
subordinates. The superior will be
able to give specific and relevant
feedback to the subordinates in
order to develop them.
4.Better productivity
PE increases mutuality between
each subordinate and superior. It
generates and encourages favorable
superior - subordinate relations if
done properly.
Inormative purposes
The following purposes can be
gained:
1.The employee will be able to know
what the organization expects from
him/her and what he/she expect
from the organization.
2.PE lets the employee know what
aspects of his/her work
performance his/her superior
prescribes to be improved.
3.PE informs that job performance
of the employee is
beingappreciated.
4.PE bestows recognition on the
employee for excellent
performance. 5.PE is a means to
help each employee to perform
his/her current job more efficiently
and effectively.
6.PE is a way of helping the
employee to get prepared for future
promotions.
Process of performance evaluation
Step 1: Establishing objectives of EPE
Step 2: formulating policies of EPE.
Step 3: Establishing criteria and
standards of EPE
Step 4: Selection methods of EPE
Step 5:Design of PE form and
procedure
Step 6: training personnel evaluators
Step 7: appraise
Step 8:discuss EPE results
Step 9:Make decisions and store
Step 10:review and renewal
Performance Appraisal Techniques
Traditional Techniques
1.Forced Choice Method/2.Check
List Method/3.Free Essay
Method/4.Critical Method/5.Paired
Comparison Method/6.Straight
Ranking Method: In this technique,
the 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. This method is also
highly subjective and lacks fairness
in assessing the real worth of an
employee. And it is difficult to rank
the average employees.
7.Grading Method: Under this
technique of performance
evaluation, certain categories of
worth are determined in advance
and they are carefully defined.
These selected and well defined
categories include:
Grade A for outstanding Grade B
for very good Grade C for average
Grade D for poor These grades are
based on certain selected features
of employees such as knowledge,
judgment, analytical ability,
leadership qualities etc. The actual
performance of employees is
compared with above grades and
employees are allotted grades that
speak for their performance.
8.Graphic Rating Scale: Most
commonly used method is Graphic
rating scale. The evaluator asked to
rate employees on the basis of job
related characteristics and
knowledge of job. Evaluator is given
printed forms.
Modern Methods
1. Behaviorally Anchored Rating
Scale (BARS): It is designed to
identify critical areas of
performance of a job. Under this
.method, the behaviorally anchored
ratings scales are outlined to
recognize the critical areas of
effective and ineffective
performance behavior for getting
results. The evaluator is required to
observe the behavior of the
employee while performing the job.
2. Result oriented appraisal or MBO
technique: The result-oriented
appraisals are based on the conctile
performance targets, which are
usually established by superior and
subordinates jointly. This procedure
has been known as Management By
Objectives (MBO).
Problems of performance appraisal
1.Rating Biases: Halo effect, the
Error of Central Tendency, Personal
Prejudice, Harshness and Leniency,
Recency Effect, Unawareness.
2.Opportunity Biases: if an
employee has better working
conditions, he can produce more.
3.Group cohesiveness: cohesive
groups with high morale can
produce more than less cohesive
groups.4.Knowledge of predictor
bias:a raters knowledge of the
performance of anemployee on
predictors can influence his
appraisal ratings.
5.Similarity error: when evaluators
rate other people in the same way
that the evaluators perceive
themselves, they are making a
similarity erro