PERFORMANCE APPRAISAL METHODS

SUBMITTED BY

MOHD AAMIR (PM/2014/406)

NIPER HYDERABAD

How it is defined?

Performance appraisal refers to all those procedures that are used to evaluate the

Personality

Performance

Potential of a group

Objectives of Performance appraisal

Performance appraisal can be done by keeping the following objectives in mind To maintain records in order to determine compensation packages, wage structure, salaries raise etc.To identify the strength and weaknesses of employees to place right men to right job.To assess the potential present in a person for further developmentIt serves basis for influencing working habits of employees.

Advantages of Performance appraisal

Performance appraisal is the investment for the company which can be justified by following :

Promotion

Compensation

Employees development

Selection validation

Communication

Motivation

TYPES OF APPRAISAL METHODS

Appraisal methods can be broadly classified into two groups :

Past oriented methods

Future oriented methods

PAST ORIENTED METHODS

Rating scales

Checklist

Force choice method

Critical incident method

Field review method

Confidential records

Essay method

Cost accounting method

RATING SCALES It consists of several numerical scales each representing a job related performance criterion such as dependability, initiative, output, attendance, attitude, co-operation. The one major provision in selecting traits is that they should be in some way relevant to the appraisee's job.

ADVANTAGES DISADVANTAGES

Structured and standardized. This allows ratings to be easily compared and contrasted - even for entire workforces.

Trait relevance

Same basic appraisal process and rating criteria.

Encourages equality in treatment for all appraises

It is possible that an employee's performance may depend on factors that have not been included in the selected traits.

Rating scale methods are easy to use and understand

Selective perception i.e. assessments of what a person is "really like", and then seek evidence to support that view

The result is widespread acceptance and popularity for this approach.

Problems of perceived meaning occur when appraisers do not share the same opinion about the meaning of the selected traits and the language used on the rating scales.

Checklist Checklist contains a list of statements on the basis of which the rater describes the on job performance of employees

Forced Choice Method In the forced choice method the rater is forced to select statements which are readymade.

This method makes use of several sets of pair phrases, two of which may be positive and two negative and 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

Field review method The appraiser goes to the field and obtains the information about work performance of the employee.

Questioning the individual, his peer group , and his superiors.

At this stage it would not be out of context to mention some of the limitations associated with trait-based methods of performance evaluation.

First, the trait-based methods are based upon traits (like integrity and consciousness) which may not be directly related to successful job performance. An employee can change behavior, but not personality.

Critical incident technique

Managers prepare a list of very effective and ineffective behavior of an employee

These critical incident represent the outstanding or poor behavior of the employees

The manager periodically records critical incidents of employee behavior .

Example

Feb 25 : Sales clerk patiently attended to the customers complaint. He is polite, prompt, enthusiastic in solving customer problems

Feb 26 : Sales assistant stayed 45 mins beyond his break during the busiest part of the day. HE failed to answer the store manager’s call thrice. He is uninterested in work.

Limitations of critical incident technique

Negative incidents may be more noticeable than positive incidents

Results in very close supervision which may not be liked by the employee

The recording of the incident is the chore for the supervisor concerned who may be too busy or forget to do it.

ESSAY EVALUATION METHOD The rater is asked to express the strong as well as the weak points of employee’s behavior

Rater’s consider the employee’s :

oJob knowledge and potential

oUnderstanding company’s programs, policies, and objectives

oRelation with coworkers and supervisors

o Planning, organizing, or controlling activity

oAttitude and perception

Limitations of essay evaluation method

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 point of view of the firm.

CONFIDENTIAL REPORTS It is mostly used in government organizations.

Prepared, generally at the end of every year, by the employee’s immediate superior.

It does not offer any feedback to the appraisee.

Appraisee does not know about :

Why his ratings have fallen despite his best efforts

Why others are rated high when compared to him, how to rectify his mistakes.

NOTE : In recent years, due to pressure from courts and trade unions, the details of a negative confidential report are given to the appraise.

COST ACCOUNTING METHOD HRA is the process of Assigning, budgeting, and reporting the cost of human resources incurred in an organization, including wages and salaries and training expenses

Human resource accounting method tries to find the relative worth of these assets in the terms of money.

In this method the Performance appraisal of the employees is judged in terms of cost and contribution of the employees.

The cost include all the expenses incurred on them like their compensation, recruitment and selection costs, induction and training costs

Contribution includes the total value added (in monetary terms)