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

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

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

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

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

Remove work alienation: Counseling Employees

corrects misconceptions which might result in work

alienation

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

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

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

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

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

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

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

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

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

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

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

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

Objectives give greater freedom to both

management and the employees in deciding how performance is to be measured

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

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

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

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

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

Confidential report Essay evaluation Critical incidents Checklists Graphic rating scale Behaviorally anchored rating scale Forced choice method

MBO

Performance Appraisal - Multiple Person Evaluation Methods

Ranking

Paired comparison
Forced distribution

Other methods

Performance tests

Field review technique

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

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

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

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 managers call thrice. He is lazy, negligent,

stubborn and uninterested in work

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

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

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

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

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)

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

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

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
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 employees work.

Manager or head of the departments. Consultants or Clients

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

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

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