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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 employee’s 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 employee’s behavior
The rater considers the employee’s : Job knowledge and potential
Understanding of company’s 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 employee’s 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
manager’s call thrice. He is lazy, negligent,
stubborn and uninterested in work
Critical Incident method
Ex: A fire, sudden breakdown, accident
Workers reaction scale
A informed the supervisor immediately 5B Become anxious on loss of output 4C tried to repair the machine 3D Complained for poor maintenance 2E was happy to forced test 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 Y/NIs employee respected by subordinate Y/NIs employee helpful Y/NDoes he follow instruction Y/NDoes he keep the equipment in order Y/N
Weighted checklist method
weights performance rating(scale 1 to 5 )
Regularity 0.5Loyalty 1.5Willing to help 1.5Quality of work 1.5Relationship 2.0
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 Rating
1.Regularity on the job Most Least•Always regular•Inform in advance for delay•Never regular•Remain absent•Neither regular nor irregular
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_______Rater’s name ___________ Date________------------------------------------------------------------------------
Exc. Good Acceptable Fair Poor 5 4 3 2 1 _
DependabilityInitiativeOverall outputAttendanceAttitudeCooperationTotal score Continuous Rating Scale
Discontinuous Rating Scale
Attitude
NoInterest
Indifferent
Interested
Enthusiastic
Veryenthusiastic
BARS( behaviorally Anchored rating scale)
Step 1. Identify critical incidents
Step 2. Select performance dimension
Step 3. Retranslate the incidents
Step 4. Assign scales to incidents
Step 5. 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
Group Appraisal Ranking Paired comparison Forced distribution Performance tests Field review
technique 360 degree Appraisal Method
Performance Appraisal 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
Ranking method
Employee Rank
A 2
B 1
C 3
D 5
E 4
Paired comparison method
A B C D E Final RankA - - - + + 3
B + - - + + 2
C + + - + + 1
D - - - - + 4
E - - - - - 5No 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
10% 20% 40% 20% 10%
poor Belowaverage
average good Excellent
No. of employees
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 methodPerformance subordinate peers superior customerDimension
Leadership ^ ^
Communication ^ ^
Interpersonal skills ^ ^
Decision making ^ ^ ^
Technical skills ^ ^ ^
Motivation ^ ^ ^
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
360o 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