Performance Appraisal Methods

PERFORMANCE APPRAISAL

Ms.Sadhana BanerjiAssistant Professor-NDIM

MEANING OF PERFORMANCE APPRAISAL

PERFORMANCE- It refers to the degree of accomplishment of the tasks that make up an individuals job. it indicates how well an individual is fulfilling the job requirement.

APPRAISAL- assessment, evaluation, judgment, review, consideration

Act of evaluation of performance

???????????IS PERFORMANCE APPRAISAL.

Basically it is systematic process involving 3 steps:

Setting work standards

Assessing employees actual performance relative to these standards

Offering feedback to the employee so that he can eliminate deficiencies and improve performance in the course of time.

Definition of performance appraisal Written assessments of employees carries out in a

systematic way at regular intervals. It is a process of evaluating an employee’s

performance and the qualifications of the employee in terms of the requirements of the job for which

he/she is employed.

Features of Performance appraisal

It tries to find out how well the employee is performing the job and tries to establish a plan for further improvement.

It is carried out periodically. It is not one shot deal.

It is not past oriented activity.Performance appraisal is not job

evaluation.

OBJECTIVES OF PA

1.1. To improve the performance of the To improve the performance of the organisationorganisation

2.2. To assess actual against expected performanceTo assess actual against expected performance

3.3. To assist subordinate to improve own performance.To assist subordinate to improve own performance.

4.4. To contribute to determining fair rewardsTo contribute to determining fair rewards

5.5. To identify employees suitable for promotionTo identify employees suitable for promotion

6.6. To contribute to development of individualsTo contribute to development of individuals

BENEFITS OF PERFORMANCE APPRAISAL

It provides a scientific basis for judging the merits or worth of employees who will try to improve their performance.

It provides a sound basis for promotion , demotion, transfer or termination.

It helps in distinguishing between efficient and in efficient workers. In this way it actually reveals the defects in the selection procedure.

BENEFITS OF PERFORMANCE APPRAISAL TO THE MANAGER

It helps the supervisors to evaluate the performance and to know the potentials of their subordinates systematically.

It also help to assign work to individual for which they are best suited.

If the performance appraisal is done scientifically and systematically ,it will prevent employee grievance.

Uses of Performance Appraisal

PerformancePerformanceAppraisalAppraisal

Giving Performance Giving Performance FeedbackFeedback

Administering Wages Administering Wages and Salariesand Salaries

Identifying Strengths Identifying Strengths and Weaknessesand Weaknesses

What to Evaluate?

Traits MeasuresAre an assessment of what the employee is,

not what the employee actually does.Behavior-based measures

Focus on what an employee does and what the employee should do differently.

Results-based measuresFocus is on accomplishments or outcomes that

can be measured objectively.

How to Evaluate?

Relative Assessment Employees are measured against other

employees and ranked on their distance from the next higher to the next lower performing employee.

Absolute Measurement Employees are all measured strictly by

absolute performance requirements or standards of their jobs.

The Appraisal Process

Establish Performance Standard 1.

Communicate the Standard2.

Measures actual Performance3.

Compare actual performance with Standards 4.

Taking corrective Action, if necessary5.

Performance appraisal methods

AppraisalMethods

Performance appraisal

Individual evaluation1. Confidential report2. Essay evaluation3. Critical incident4. Checklist5. Graphic rating scales6. Forced choice method7. MBO

Individual evaluation method)

1.FREE ESSAY

In this method the rater is asked to express the strong as well as weak point of the behavior.

It describes an employee's actions rather than indicating an actual rating

Essay contd…

While preparing the essay on the employee the rater considers the following factors:

a)Job knowledge

b)Employees understanding of the company’s programmes, policies.

c)Employee relations with co –workers and superiors.

d)The attitudes and the perceptions of the employee.

2.CRITICAL INCIDENT METHOD

Critical incidents are behaviors that result in good or poor job performance.

Such incidents are recorded by the superiors. The rater plays the role of ‘Observer’ rather

than ‘Judge’.

For e.g. “I saw Mishra closing the steam line valve

at the instant the pipeline burst. We could save a lot of lives due to the above factor.”

CHECKLIST

A check list represents in its simplest form ,a set of objectives or descriptive statements about the employee and his behavior.

Checklists consist of groups of statements that pertain to a given job.

For e.g. I. is the employee really interested in the task?

Yes/No II.Does he respects his superior? Yes/No

GRAPHIC RATING SCALE (GRS)

I. In this method a printed form is used to evaluate the performance of an employee.

II. A variety of traits may be used in these types of rating devices .

III. In a Graphic Rating Scale, the rater assesses a rate on performance-related characteristics and personality characteristics,

ie. factors like quantity of work, dependability, job knowledge, cooperativeness, ability to lead, interpersonal skills, etc. by using a rating scale.

Forced Choice Method

A rating technique specially designed to increase objectivity and to decrease biasing factors in ratings.

It comprises of the use of statements that are grouped into sets according to certain statistical properties.

Rater is “forced” to select from each group of statements a subset (usually 2) of those statements which is most or least descriptive of the employee.

For e.g..

Least Most A Does not anticipate A difficulties B Grasps explanation B easily and quickly

C Does not waste time C

D Very easy to talk to D

Multiple –person evaluation methods

1. Ranking

2. Paired Comparison

3. Forced Distribution

1.Alternation ranking

2.PAIRED COMPARISON: For the trait “Creativity”

_+++EESHWAR

+_++DILIP

_++_CHARLES

____BHAVANA

__++ARUP

EESHWARDILIPCHARLESBHAVANAARUP

Forced distribution

One of the errors in rating is leniency i.e. Clustering a large number of employees

around a high point on a rating scale. This method compel the rater to

distribute the rates on all points on the rating.

For e.g. the following distribution might be assumed to exist – excellent 10%,good 20%,average 40%,below average 20%.

3.Forced Distribution

0

5

10

15

20

25

30

Low Low-avg

Avg High-avg

High

LowLow-avgAvgHigh-avgHigh

MANAGEMENT BY OBJECTIVES

The use of Management By Objectives was first widely advocated in the 1950s by the noted management theorist Peter Drucker.

MBO requires the management to set specific measurable goals with each employee.

This technique emphasis anticipatively set goals(that are agreed upon by the superior and the employee).

MBO………(process)

1. Set the organizational goals2. Set departmental goals3. Discuss departmental goals4. Define expected results5. Performance reviews6. Provide feedback

360 Degree Appraisal

A 360 degree appraisal system collects performance information from multiple parties, that interact with the employee on a routine basis.

Generate more accurate feedback by gathering information from people about an individual’s performance .

It was originally developed by TV Rao in mid eighties at IIM ,A.

18–35

360 DEGREES

Parties involved

1. Supervisors2. Peers3. Subordinates4. customer

360 Degree Appraisals

Supervisors

Peers Outsiders

Subordinates

Parties involved……

1. Supervisor –It includes supervisor of the employee having knowledge about the work of the employee. General practice is that immediate superiors.

2. Peers-Peer rating may reliable in rating behavior and manner of performance.

3. Subordinates-the concept of having superiors rated by subordinated .

4. Customers- employee performance in terms of behavior ,promptness ,speed in doing the job can be better judged by customers.

Contd……..

Corporation like GE, Reliance, Wipro,Infosys,SBI,Aditya Birla

Group are all using this tool to discover home truth about their managers.

For e.g. If manager has 6 subordinates ,the manager does not know which subordinates said what ,the result are summarized and averaged.

It may be possible one may criticize the boss for standing too close to people ,another may comment on boss’s aggressive tone.

Factors that can Distort Appraisals

1. First Impression The appraisers first impression of a candidate

may color his evaluation of all subsequent behavior.

2. Personal prejudice if the rater dislikes any employee or any

group ,he may rate them at the lower end .3. Halo effect: when one aspect of the

subordinate's performance affects the rater’s evaluation of the other performance.

Factors that can Distort Appraisals

4. Central tendency: Play safe policy in rating by rating all the

employees around the middle point of the rating scale and they avoid rating the people at both the extremes of the scale.

5 .The Leniency and Strictness: 6. The Recency effect: The raters generally remember the recent

actions of the employee at the time of rating and rate on the basis of these recent action.