HRM Module 4

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PERFORMANCE APPRAISAL

Semester-II, BVB College - MBA Dept. Place - HubliSubject Title & Code - HRM (10MBAHC205) Date – 21/04/2011Topic – Performance Appraisal Presented by – Supreetha . B .M.

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Topics Covered;

1. Meaning2. Purpose of appraisal3. Factors affecting appraisal4. Performance appraisal process5. Performance appraisal methods6. Appraisal and post appraisal interview7. Evaluation of good appraisal system8. Performance counseling 9. Employee engagement 10. Competency mapping.


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OBJECTIVES

At the end of the module you should be able;

1. Understand the objectives of performance appraisal.

2. Determine the sources of error in performance appraisal.

3. Illustrate the major types of performance appraisal systems.

4. Understand the importance of goal setting in performance improvement.

5. Outline an effective appraisal interview.


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INTRODUCTION

Human resources are considered to the most valuable assets in an organization.

It is the sum total of inherent abilities acquired knowledge and skills presented talents and aptitudes of the employed persons who compromise executives, supervisors and the rank file employees

It may note here that human resources should be utilized maximum possible extent, in order to achieve individual and organization goals, it is thus the employee’s performance which untimely decides and attain goals.

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In many organizations - but not all - appraisal results are used, either directly or indirectly, to help determine reward outcomes.

That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions.

By the same token, appraisal results are used to identify poorer performers, who may require some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay.


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Meaning

‘Performance appraisal is a formal, structured system of measuring and evaluating an employees job - related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society all can get benefits’.

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Simply put, it is the observation and evaluation of a employee’s work behavior and accomplishments for the purpose of making decisions about the employee.

These decisions may include wage, salary, and benefit determinations; promotion, demotion, transfer, or termination actions; and coaching and counseling, training, or career development options.


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There are three basic functions of an effective performance appraisal:

1. To provide adequate feedback to staff members on their performance2. To serve as an opportunity to communicate face-to-face modifications or changes to existing performance objectives3. To provide data to administrators so they can evaluate a employee and judge future job assignments and compensation


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PURPOSE

1. Set standardized process of implementing performance appraisals to ensure that each individual is judged fairly and keeps discrimination.

2. Avoids legal challenges that could result from termination or demotion.

3. Ensures that job performance expectations are consistent throughout organizational processes.


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4. Making payroll and compensation decisions – 80%5. Training and development needs – 71%6. Identifying the gaps in desired and actual

performance and its cause – 76%7. Deciding future goals and course of action – 42%8. Promotions, demotions and transfers – 49%


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Factors


Figure-1

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The Performance - Appraisal Cycle

Employee skills & abilities

Training & Promotion

Manager’s appraisal

Effort & behavior

Performance

If positiveIf negative


Figure-2

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Relationship between job analysis and performance appraisal:

Job Analysis Performance Performance Standards Appraisal

Describes work& Personnel Requirement Of a particular job

Translate job Into levels of To acceptableOr unacceptableperformance

Describes the Job relevant strengths and weakness ofEach individual


Figure-3

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Performance Appraisal Process

1. Establish and communicate expectations for performance.

2. Observe and measure individual performance against standards.

3. Reinforce performance to provide remedies


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QUESTION ARISES?

1. Why do we measure performance?

2. How do we measure performance?


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REASONS FOR MEASURING PERFORMANCE

1. Helping Set Objectives And Planning Work Schedules2. Rewarding Efficient And Effective Workers3. Promoting, Separating Or Transferring As Appropriate4. Evaluating Different Work Methods, Tools Or Equipment


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5. assessing or modifying working conditions6. estimating and allocating costs7. assessing employee's attitudes8. increasing supervisors' understanding of staff needs or9. improving and strengthening supervisor/subordinate relationships.


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Methods of Performance Appraisal

Performance Appraisal Methods

Individual evaluation method Multi-person evaluation Others1. Confidence report 9.Ranking 12.Group appraisal2. Essay evaluation 10.Paired comparison 13.HRA3. Critical incidents 11.Forced distribution 14.Assessment centre4. Checklist 15.Field review5. Graphic rating scale6. Behavioral anchored rating 7. Forced choice method8. MBO


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360-degree Feedback System

multi-rater feedback, multisource feedback, or multisource assessment - feedback that comes from all around an employee.

"360" refers to the 360 degrees in a circle, with an individual figuratively in the center of the circle.

Feedback is provided by subordinates, peers, and supervisors. It also includes a self-assessment and, in some cases, feedback from external sources such as customers and suppliers or other interested stakeholders.


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BENEFITS OF APPRAISAL SYSTEM

Appraisals offer the company:DocumentationEmployee DevelopmentFeedbackLegal protectionMotivation system

Appraisals offer employees:DirectionFeedbackInputMotivation


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Appraisal Interview

Performance appraisal interview is the first stage of the performance appraisal process.

Involves - employee and manager sitting face to face to discuss threadbare all aspects of the employee’s performance and thrash out any differences in perception or evaluation.

Provides the employee with a chance to defend himself or herself against poor evaluation by the manager and also gives the manager a chance to explain what he or she thinks about the employee’s performance.

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In a nutshell, the performance appraisal interview precedes the normalization process and is subsequent to the employee filling up the evaluation form and the manager likewise doing so.

The interview is the stage where both sides debate and argue the employees’ side of the story as well as the manager’s perception.


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Why Appraisal Interview?


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Effective Preparation

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Figure-9

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Figure-10

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Appraisal Interview Structure

1. Introduction2. Interview3. Summary


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Introduction

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Interview


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Summary


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Post appraisal interview

The post appraisal interview is an essential part of the performance appraisal system.

The employee gets useful feedback information about how effectively and efficiently he is able to discharge the assigned duties.

It also gives the opportunity to employee to explain his views about the ratings, standards, rating methods, internal and external causes for low level of performance.

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The appraiser gets a chance to explain the employee his rating, the traits and behavior he has taken into account for appraisal, etc. He can utilize this opportunity to offer constructive suggestions help, guide and coach the employee for his advancement.

The post appraisal interview helps both parties to review standards, set new standards based on the experience gained.

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It, thus, serves to meet the following objectives: 1. to let employees know where they stand;2. to help employees do a better job by clarifying what is expected of them;3. to plan opportunities for development and growth;4. to strengthen the superior-subordinate working relationship by developing a mutual agreement of goals;5. to provide an opportunity for employees to express themselves on performance-related issues.

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How To Prepare A Good Performance Evaluation?

1. Avoid the "Halo and Horns" 2. Set goals3. Keep score all year long4. Participate in formal performance review meeting5. Assess oneself 6. Positive attitude

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Employee Performance

Managing employee performance is one of the key drivers for organizational success in the present context of firms trying to adopt a resource centered view of the organization.

Successful employee performance management includes goal setting, timely feedback, communication and measured success.

This allows employees to better identify what their management and organization expects from their performance and allows them to feel more connected to the success of the company.


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Objectives

1. Increase two-way communication2. Clarify mission, goals, responsibilities, priorities and expectations3. Identify and resolve performance problems4. Recognize quality performance5. Provide a basis for administrative decisions such as promotions,

succession and strategic planning, and pay for performance.


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Performance management

ective feedback

Performance = Behavior + Results

Performance management can focus on the performance of an organization, a department, employee, or even the processes to build a product or service, as well as many other areas.

According to Armstrong and Baron (1998), Performance Management is both a strategic and an integrated approach to delivering successful results in organizations by improving the performance and developing the capabilities of teams and individuals.

Performance management is an ongoing communication process which is carried between the supervisors and the employees through out the year.


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Process of Performance Management


Figure-11

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Performance Counseling

Performance counseling can be defined as the help provided by a manager to his subordinates in analyzing their performance and other job behaviors in order to increase their job effectiveness.

Performance counseling essentially focuses on the analysis of performance on the job, and identification of training needs for further improvement.


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Feedback & Counseling

The purpose of both counseling and feedback is to provide employees with the information, advice and assistance they need to contribute fully to the achievement of organization's objectives and, where a person fails to make the required contribution, to demonstrate that managers have made an appropriate effort to assist them.


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Situations for Counseling

1. As part of a regular system of performance feedback.2. Assessing the performance of a probationer.3. In the context of performance appraisal.4. Assessing training and development needs.5. After a selection process.

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6. If a employee is planning to retire or resign from the service.7. Where there is a decline in work performance.8. Where the standard of conduct is not being met.9. Where there has been particularly good performance.10. Where a difficulty has been overcome.11. To maintain continuing good performance.


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Counselling Need Symptoms

Sudden change of behaviourHigh absenteeismIncreased in the job absenceHigh accident rateIncreased fatigueLoss in quality

Decreased production Wasting material Difficulty in absorbing

training Spoiling the work Getting involved Talking in a high pitch


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Counselling Techniques

Be an active listener Be interested Be compassionate Be available Be accepting Be non-judgmental

Control anger Be geographically well placed Be constructive Be able to relate Maintain confidentiality Be careful Refer to experts


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Rapport Building Exploration Action Planning

AttendingListeningAcceptance

ExploringProblem- IdentificationDiagnosis

Searching Decision makingSupporting

Process of counseling


Figure-12

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Feedback

Feedback is generally informal and involves manager and subordinate exchanging information in a broad range of situations about how both can best work together to achieve the goals of the organization.

Feedback ranges from oral comments on a person’s performance to written reports, such as probation, performance appraisal or referee reports.


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Providing effective feedback

1. Based on open, two-way communication2. Timely and regular;3. Factual and specific;4. Constructive; and5. Follow up.


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If feed back fails !

COUNSELLING is a formal process, initiated when a person has not responded to advice and assistance of manager had provided on a less formal basis, and will usually involve manager taking the following steps:

Advise the person in advance that a discussion about his or her work performance or conduct is to be held at a given time and place, with sufficient notice to enable both to come to the discussion prepared

Arrange for the meeting to be held in private, although a support person for the person being counseled may be present, as well as someone manager may have asked to attend as an observer and

Keep a brief record of the meeting—this could be a diary note.


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Who should be present?

ective feedback

A counseling discussion - manager or supervisor and a staff member - requests the presence of a support person or independent observer.

A person/s attending a session in this capacity would not normally take part in the discussion and their presence and role should be clarified before the session commences.


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How and where should m anager counsel ?

ective feedback

1. Generally - praised in public and criticized in private.

2. It is advisable first to let a person know they have done a good job and then the improvement areas.

3. Formal counseling - place which is private and free from distractions.

4. A suitable time – discussion - agreed in advance and sufficient notice given to allow both to prepare adequately.


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Employee Engagement

ective feedback

Employee Engagement is the extent to which workforce commitment, both emotional and intellectual, exists relative to accomplishing the work, mission, and vision of the organization.

Engagement can be seen as a heightened level of ownership where each employee wants to do whatever they can for the benefit of their internal and external customers, and for the success of the organization as a whole.

Employee engagement - work engagement - worker engagement, is a business management concept.

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An "engaged employee" is one who is fully involved in, and enthusiastic about, his or her work, and thus will act in a way that furthers their organization's interests.

According to Scarlett Surveys, "Employee Engagement is a measureable degree of an employee's positive or negative emotional attachment to their job, colleagues and organization which profoundly influences their willingness to learn & perform at work".

Thus engagement is distinctively different from satisfaction, motivation, culture, climate and opinion and very difficult to measure.


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What is em ployee engagem ent ?

ective feedbackThe extent that an employee believes in the mission purpose and values of an organization and demonstrates that commitment through their actions as an employee and their attitude towards the employer and customers.

Employee engagement is a step ahead than employee Satisfaction:

Belief in the organization Desire to work to make things better Understanding of business context and the ‘bigger picture’ Respectful of, and helpful to, colleagues Willingness to ‘go the extra mile’ Keeping up to date with developments in the field

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Defining employee engagement

ective feedback

Engagement is the energy, passion, or ‘fire in the belly’ employees have for their employer:


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Types of Employee

1. Engaged2. Not Engaged3. Disengaged

29%

54%

17%

Scary Statistics

Engaged

Not Engaged

Disengaged

Figure-14

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Com ponents of em ployee engagem ent

ective feedback

1. Cognitive2. Emotional3. Behavioral


Figure-15

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Employee engagement is influenced by

1. Employee perceptions of job importance. 2. Employee clarity of job expectations. 3. Career advancement/improvement opportunities.4. Regular feedback and dialogue with superiors 5. Quality of working relationships with peers, superiors, & subordinates 6. Perceptions of the ethos and values of the organization

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Types of engagement activities

Communication activities Reward schemes Activities to build the culture of the organization Team building activities Leadership development activities

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Common engagement drivers across companies

83%

64% 61%60% 59%

30%

Career Opportunitie

s

Company Practices

Senior Leadership

Work Resources

Recognition

Pay

Figure-16

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Competency mapping

Ongoing and unrelenting economic, social and technological changes have spurred the need for flexible, skilled workers who can help their organizations succeed and sustain a competitive advantage.

To be relevant within organizations and indispensable to clients and customers alike, workplace learning and professionals performance must continually reconsider their competencies, update their skills and have the courage to make necessary changes. Businesses and managing business has and will always be complex.

Introduction

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History

Benjamin Bloom – Educationists – USA - mid fifties - foundation - identifying educational objectives and thereby defining the knowledge, attitudes and skills needed to be developed in education.

David McClelland - Harvard Psychologist - pioneered the competency movement across the world. Books on "Talent and Society", "Achievement Motive", etc brought out several new dimensions of the competencies.

These competencies exposed by McClelland dealt with the affective domain in Bloom's terminology.

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Turning point - competency movement - article published in American Psychologist in 1973 by McClelland.

Presented - traditional achievement and intelligence scores may not be able to predict job success. - what is required is to profile the exact competencies required to perform a given job effectively and measure them using a variety of tests.

Latter – McBer, Consulting Firm - founded - David McClelland - his associate Berlew - specialized in mapping the competencies of entrepreneurs and managers across the world.

Developed a new - yet simple methodology - the Behavior Event Interviewing (BEI) to map the competencies.

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What do we mean when we say “COMPETENCY” ?

A Competency is an underlying characteristic of a person which enables him /her to deliver superior performance in a given job, role or a situation.

Competencies are seen mainly as inputs.

They consist of clusters of knowledge, attitudes and skills that affect an individual’s ability to perform.

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Components of Competency

Three major components;

KnowledgeSkillsAttitude

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Self Concept

Traits & Motives

Value

Skill

Surface CompetenciesMost easily developed

Core CompetenciesMost difficult to develop

Attitude

Knowledge

Figure-17 Components of Competency

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Iceberg Model of Components Of Competency motive

Figure-18

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Who identifies competencies?

one or more of the following category of people:

1. Experts2. HR Specialists3. Job analysts4. Psychologists5. Industrial Engineers etc.

In consultation with: i. Line Managers

ii. Current & Past Role holders iii. Supervising Seniors iv. Reporting and Reviewing Officers v. Internal Customers

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Classification of Competencies

1. Basic Competencies2. Professional Competencies3. Organizational Competencies

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1. BASIC COMPETENCIES

Determine the level of motivation Determine the intellectual ability

Determine the level of social ability Determine emotional quotient

Motivational Competencies:o Continuous Learningo Perseveranceo Achievement Orientationo Time Management

Intellectual Competencies:o Communicationo Creativityo Analytical Abilityo Planning and Organizing

Social Competencies:o Team Worko Inter-personal Skillso Responsibilityo Customer Satisfaction

Emotional Competencies:o Initiativeo Optimismo Self Confidenceo Leadershipo Managing Stresso Managing Change

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2. Professional Competencies

1. Knowledge2. Experience 3. Expertise gained by an individual employee.

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3. Organizational Competencies

1. Generic Competencies

> Communication> Team Working & Interpersonal Effectiveness> Influencing Ability> Achievement Orientation> Networking Ability> Creative Thinking> Strategic Thinking> Tolerance to non-compliance, non-congruence, non-conformance

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2. Managerial Competencies

> Customer Orientation> Organizing Skills> Cross functional Perspective> Planning Skills> Execution Skills> Analytical Skills> Decision Making> Delegation: > Leadership > Developing and supporting subordinates for effectiveness

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3. Functional/Technical Competencies

> Business awareness> Business skills> Technical skills

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Competency Mapping

Competency mapping is the process of identification of the competencies required to perform successfully a given job or role or a set of tasks at a given point of time.

It generally examines two areas: emotional intelligence or emotional quotient (EQ), and strengths of the individual in areas like team structure, leadership, and decision-making.

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Need for Competency Mapping

1. Increased cost of manpower

2. Competent people are available for performing various critical roles.

3. Reduce manpower costs and pass on the advantage to the customer.

4. Right kind of human resources - technology, finances, customers and markets, systems and processes – use in a right manner or manage effectively

5. Time management, nurturing of competence, increased emphasis on performance management systems.

6. Strategic advantage given by employee competencies in building the core competencies of the organization.

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Areas of Implementation

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Process of Competency Mapping

Preparation of Questionnaire

Collectionof Responses

Analysis Findings

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Conclusion

Competency Mapping therefore, is a process of identifying key competencies for an organization and/or a job and incorporating those competencies throughout the various processes (i.e. job evaluation, training, recruitment) of the organization.

Documents

HRM Module 4