Performance appraisal Traditional approach

Traditionally, performance appraisal has been used as just a method for determining and justifying the salaries of the employees. Then it began to be used a tool for determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past performance of the employees.

Traditional approach
This approach was a past oriented approach which focused only on the past performance of the employees i.e. during a past specified period of time. This approach did not consider the developmental aspects of the employee performance i.e. his training and development

Performance appraisal Modern approach

More formal and structured. As a tool to identify better performing employees from others, As a tool to identify employees training needs, As a tool to identify career development paths, As a tool to identify rewards and bonuses As a tool to identify promotions to the next levels.

Performance Appraisal Methods

Individual Evaluation Methods Confidential report Essay evaluation Critical incidents Checklists Graphic rating scale Behaviorally anchored rating scale MBO

Confidential Report

Descriptive report Prepared at the end of the year Prepared by the employees 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

The rater is asked to express the strong as well as weak points of employees behavior

The rater considers the employees :

Job knowledge and potential Understanding of companys programs, policies, objectives etc Relation with co-workers and supervisors Planning, organizing and controlling ability Attitude and perception

Critical incidents

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 employees behavior

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 managers call thrice. He is lazy, negligent, stubborn and uninterested in work

Critical Incident method

Ex: A fire, sudden breakdown, accident Workers A B C D E reaction informed the supervisor immediately Become anxious on loss of output tried to repair the machine Complained for poor maintenance was happy to forced test scale 5 4 3 2 1

Checklists

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

Checklist method
Simple checklist method Weighted checklist method Forced choice method

Simple checklist method:

Is employee regular Is employee respected by subordinate Y/N Is employee helpful Does he follow instruction Does he keep the equipment in order Y/N Y/N Y/N Y/N

Weighted checklist method

weights Regularity Loyalty Willing to help1.5 Quality of work Relationship 0.5 1.5 1.5 2.0 performance rating (scale 1 to 5 )

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

Forced choice method

Criteria 1.Regularity on the job Always regular Inform in advance for delay Never regular Remain absent Neither regular nor irregular Rating Most Least

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

Graphic Rating Scale

Continuous Rating Scale Discontinuous Rating Scale Employee name_________ Deptt_______ Raters name ___________ Date________ -----------------------------------------------------------------------Exc. Good Acceptable Fair Poor 5 4 3 2 1 _ Dependability Initiative Overall output Attendance Attitude Cooperation Total score Continuous Rating Scale

Indifferent
Attitude

Enthusiastic

No Interest

Interested

Very enthusiastic

Discontinuous Rating Scale

BARS( behaviorally Anchored rating scale)

Step 1. Step 2. Step 3. Step 4. Step 5. Identify critical incidents Select performance dimension Retranslate the incidents Assign scales to incidents Develop final instrument

MBO Process

Set organizational goals Defining performance target Performance review feedback

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

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

Performance Appraisal Methods

Group Appraisal

Ranking Paired comparison Forced distribution Performance tests Field review technique
360 degree Appraisal Method

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

Ranking method
Employee A B C D E Rank 2 1 3 5 4

Paired comparison method

A B C D E A + + B + C D + + + E Final Rank + 3 + + + 2 1 4 5

No of Positive evaluation Total no. of evaluation * 100 = employee superior evaluation

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.

Forced Distribution Methods

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.

Forced Distribution method

No. of employees 10% 20% poor 40% 20% 10% Excellent Below average good average Force distribution curve

Field review method

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

Field review method

Performance Dimension Leadership Communication Interpersonal skills Decision making Technical skills Motivation subordinate peers ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ superior customer ^

360 o 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

360 o Appraisal System

Appraisal taken from: Boss (HOD) Subordinates Peers Immediate supervisor

Performance criteria for executives

For top managers

Return on capital employed Contribution to community development Degree of upward communication from middle-level executives Degree of growth and expansion of enterprise.

For middle level managers

Departmental performance Coordination among employees Degree of upward communication from supervisors Degree of clarity about corporate goals and policies

For supervisors

Quality and quantity of output in a given period Labor cost per unit of output in a given period Material cost per unit in a given period Rate of absenteeism and turnover of employees No of accidents in a given period