Organizations goals are achieved only when people put in their best efforts How do you assertain that

a person has shown his or her best performance on a given job? Employee assessment is one of the fundamental jobs of HRM PERFORMANCE APPRAISAL

An objective assessment of an individuals performance against well defined benchmarks Kep Performance Indicatots/Factors 1. Job Knowledge 2. Quality & Quantity of Output 3. Initiative 4. Leadership Abilities 5. Supervision 6. Dependability 7. Cooperation 8. Judgement

Performance Rating Employee Assessment Employee Performance Review Personal Appraisal Performance Evaluation Merit Rating

Performance Management refers to entire process of appraising , giving feedback to employees and offering rewards or punishment

Performance Analysis is linked to Job Analysis

Performance Standards Translate Job requirements into levels of acceptable or unacceptable performance Performance Appraisal Describes the Jobrelevant strengths and weaknesses of each individual

Job Analysis Describes Work and Personnel Requirement of a job

To effect promotions based on competence and performance To confirm services of probationary employees upon completion of the probationary period To assess training and development needs To decide upon a pay rise To let employees know where they stand and to assist them with constructive criticism and guidance for their development To improve communication To determine whether HR programmes have been effective or not

Broadly serves 4 objectives 1. Developmental Uses 2. Administrative Decisions 3. Organizational maintenance/ objectives 4. Documentation

Improving Performance Making correct decisions Ensure legal compliance Minimizing job dissatisfaction and turnover Consistency between organizational strategy and behaviour Organizational Strategy and Performance Appraisal

Objectives of Performance Appraisal

Establish Job Expectations

Design on Appraisal Programme

Appraisal Performance

Performance Interview Performance Management

Archive Appraisal Data Use Appraisal data for Appropriate Purposes

Formal versus informal appraisals Whose performance to be assessed? Who are the raters? What problems are encountered? How to solve the problems? What to evaluate? When to evaluate? What methods?

Classified into 2 approaches Past oriented approach Future Oriented approach

Past Oriented Approach 1. Rating Scales 2. Checklist 3. Forced Choice Method 4. Forced Distribution Method 5. Crtitical Incidents Method 6. Behaviourally Anchored Rating Scales

7. 8. 9. 10. 11. 12. 13. 14.

Field Review Method PerformanceTests and observations Confidential Records Essay Method Cost Accounting Method Comparative Evaluation Approaches Ranking method Paired Comparison Method

1. 2. 3. 4.

Management by Objective Psychological Appraisal Assessment Centres 360 Feedback

Focus on future potential and not actual performance. Industrial psychologists are employed for conducting the appraisal Approach is slow and costly

Central location where managers may come together to have their participation in job related exercises Used for executive hiring and evaluating executive or supervisory potential Cost effective only in large organisations

Multiple evaluators involved Systematic collection of performance data on an individual or group from a no. of stakeholders Enables an employee to compare his/her perception about self with that of others

Measure performance 1. Quality of output 2. Quantity of output 3. Timeliness of output 4. Presence at work 5. Cooperativeness 6. Job knowledge 7. Leadership abilities, etc.

Feedback about employee job performance Other activities are involved besides feedback 1. Performance Interview 2. Archiving Performance data 3. Use of appraisal data

Performance interview: 1. Change behaviour of employees 2. Maintain behaviour 3. Recognize superior performance behaviours

Unfair and Biased appraisal Employee may seek legal action Organizations should develop fair and legally defensible performance appraisal systems 1. Legally defensible appraisal procedures 2. Legally defensible appraisal content 3. Legally defensible documentation of appraisal results 4. Legally defensible raters

Formal and standardized Uniform process within a job group Monitor for differences according to Race, Sex, National Origin, Religion , etc. Formal communication about the standardized process Employees should be able to Review their appraisal Formal appeal process for ratee to rebut raters judgements Raters to be provided with written documentations and instructions and training Decision makers to be well informed of antidiscrimination laws

Based on job analysis and not traits Performance data should be verifiable, eg. Sales, productivity, etc Constraints on performance of an employee which is beyond his control should be prevented from influencing the appraisal so to ensure that the employee has an equal opportunity to achieve any given performance level Specific job dimensions instead of global measures or single overall measures Weightage to be assigned to reflect relative importance in calculation score

Written record of evidence of termination decisions Written documentations for extreme ratings and should be consistent with the numerical ratings Documentation requirements to be consistent among the raters

Trained on how to use an appraisal system Opportunity to observe the ratee first hand or to review important performance products Use of more than one rater is desirable 1. To lessen amount of influence of any one rater 2. Reduce effect of biases

Process of analyzing and assessing the various jobs systematically to ascertain their relative worth in an organization Seeks to determine the relative worth of each job so that salary differentials can be established Jobs are rated and not job holders

Job Evaluation Job is rated Job is rated before the employee is appointed to occupy it Purpose is to establish satisfactory wage differentials

Performance Appraisal Employee is rated Evaluation takes place after the employee has been hired and placed on a job Purpose is to effect promotions, offer reward, award punishments, assess training need, resort to lay offs, transfers etc.

Is not compulsory. If followed is mainly for lower job levels

Committee(comprising of internal & external experts) is constituted for evaluation purpose

Compulsory. Done regularly for all jobs

Appraisal done by employees themselves,peers,superiors,grou p of people, or combination of these

Objectives

Job Analysis

Job Description

Job Specification

Job Evaluation Programme Wage Survey Employee Classification

Is the compensation an employee receives in return for his or her contribution Some of remunerations are Wages & Salary, Incentives, Fringe Benefits, Perquisites, & non monetary benefits

Wage represents hourly rates of pay Salary refers to monthly rate of pay Both are subject to annual increments Differs from employee to employee and upon the nature of job, seniority & merit

Minimum Wage: Is the one which provides not merely for bare sustenance of life, but also for preservation of the efficiency of the worker Fair Wage: Equal to the rate prevailing in the same trade & in the neighbourhood, or equal to the predominant rate for similar work throughout the country Living Wage: Higher than fair wage. Provides for bare essentials plus frugal comforts

There are several principles of wage and salary plans, policies and practices. The important among them are: (a) Wage and salary plans and policies should be sufficiently flexible. (b) Job evaluation must be done scientifically. (c) Wage and salary administration plans must always be consistent with overall organizational plans and programs. (d) Wage and salary administration plans and programs should be in conformity with the social and economic objectives of the country like attainment of equality in income distribution and controlling inflationary trends.

(e) Wage and salary administration plans and programs should be responsive to the changing local and national conditions. (f) These plans should simplify and expedite other administrative processes.

Acquire Qualified Personnel: Compensation needs to be high enough to attract applicants. Pay levels must respond to supply and demand of workers in the labor market since employers complete for workers. Premium wages are sometimes needed to attract applicants who are already working for others. Retain Present Employees: Employees may quit when compensation levels are not competitive resulting in higher turnover of manpower. Ensure Equity: Compensation management strives for internal and external equity. Internal equity requires that pay be related to the relative worth of jobs, so that similar jobs get similar pay. External equity means paying workers what comparable workers at other firms in the labor market pay.

Reward Desired Behavior: Pay should reinforce desired behaviors and act as an incentive for those behaviors to occur in the future. Effective compensation plans reward performance, loyalty experience, responsibilities, and other behaviors. Control Costs: A rational compensation system helps the organization obtain and retain workers at a reasonable cost. Without effective compensation management, workers could be over or under paid.

External & Internal Factors External Factors 1. Labour Market: Demand for & supply of labour influence wage & salary fixation. Going rate of pay is a labour related factor. Involves fixing wage/ salary rates in tune with what is paid by different units of an industry. Productivity of labour also influences wage fixation 2. Cost of Living

3. 4.

5. 6.

Labour Unions Labour Laws: Payment of Wages Act ,1936; Minimum Wages Act ,1948; Payment of bonus act, 1965; Payment of Gratuity Act, 1972 Society Economy

Internal Factors 1. Business Strategy 2. Job Evaluation & Performance Appraisal 3. Employee Performance, Responsibility, Potential, Seniority, Experience, etc.

Comply with Legal Regulations: A sound wage and salary system considers the legal challengers imposed by government and ensures the employers compliance. Facilitate Understanding: System should be easily understood by human resource specialists, operating managers, and employees. Wage and salary programs should be designed to be managed efficiently, making optimal use of the human resources information system, although this objective should be a secondary consideration compared with other objectives