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Lesson 11

Lesson 11

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Published by arsha

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Published by: arsha on Oct 13, 2010
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176Personnel Management Concepts
11.0Aims and Objectives11.1Introduction11.2Definition and Meaning of Performance Appraisal11.3Features of Performance11.4Performance Measurement Purpose11.5Performance Appraisal Process11.6Methods of Performance Appraisal11.6.1Individual Evaluation Methods11.6.2Multiple-person Evaluation Techniques11.6.3Other Methods11.7360-Degree Feedback System11.8Employee Feedback and Development11.8.1Feedback Defined11.9Problems with Performance Appraisal11.10Essential Characteristics of an Effective Appraisal System11.11Performance Appraisal in Indian Industries11.12Challenges in Performance Management11.13Equal Employment Opportunity11.14Let us Sum up11.15Lesson End Activity11.16Keywords11.17Questions for Discussion11.18Suggested Readings
The purpose of this lesson is to enable the students to have a firsthand view of theconcepts, techniques and tools used in appraising performance in modern organisations.After studying this lesson, you will be able to:
Describe meaning and objectives of performance appraisal
Explain the steps involved in the performance appraisal
Outline various methods of performance appraisal
Discuss major problems of performance appraisal
177Performance Appraisal
After an employee has been selected for a job, has been trained to do it and has workedon it for a period of time, his performance should be evaluated. Performance Evaluationor Appraisal is the process of deciding how employees do their jobs. Performance hererefers to the degree of accomplishment of the tasks that make up an individual’s job. Itindicates how well an individual is fulfilling the job requirements. Often the term is confusedwith efforts, which means energy expended and used in a wrong sense. Performance isalways measured in terms of results. A bank employee, for example, may exert a greatdeal of effort while preparing for the CAIIB examination but manages to get a poorgrade. In this case the effort expended is high but performance is low.
Performance appraisal is a method of evaluating the behaviour of employees in theworkspot, normally including both the quantitative and qualitative aspects of jobperformance. It is a systematic and objective way of evaluating both work-relatedbehaviour and potential of employees. It is a process that involves determining andcommunicating to an employee how he or she is performing the job and ideally, establishinga plan of improvement.
Box 11.1: What is Performance Appraisal?
Means determining what areas of work the manager should beexamining when measuring performance - essentially focusing on performance thataffects organisational success.
Entails making managerial judgements of how good or bad employeeperformance was.
Appraisal should be more than a post-mortem examination of pastevents, criticising or praising workers for their performance in the preceding year.Instead, it must take a future oriented view of what workers can do to realise theirpotential.
The main characteristics of performance appraisal may be listed thus:
The appraised is a systematic process involving three steps:a.Setting work standards.b.Assessing employee's actual performance relative to these standards.c.Offering feedback to the employee so that he can eliminate deficiencies andimprove performance in course of time.
It tries to find out how well the employee is performing the job and tries to establisha plan for further improvement.
The appraisal is carried out periodically, according to a definite plan. It is certainlynot a one shot deal.
Performance appraisal is not a past-oriented activity, with the intention of puttingpoor performers in a spot. Rather, it is a future oriented activity showing employeeswhere things have gone wrong, how to set everything in order, and deliver resultsusing their potential in a proper way.
178Personnel Management Concepts
Performance appraisal is not job evaluation. Performance appraisal refers to howwell someone is doing an assigned job. Job evaluation, on the other hand, determineshow much a job is worth to the organisation and therefore, what range of payshould be assigned to the job.
Performance appraisal is not limited to ‘calling the fouls’. Its focus is on employeedevelopment. It forces managers to become coaches rather then judges. Theappraisal process provides an opportunity to identify issues for discussion, eliminateany potential problems, and set new goals for achieving high performance.
Performance appraisal may be formal or informal. The informal evaluation is morelikely to be subjective and influenced by personal factors. Some employees areliked better than others and have, for that reason only, better chances of receivingvarious kinds of rewards than others. The formal system is likely to be more fairand objective, since it is carried out in a systematic manner, using printed appraisalforms.
Performance appraisal could be taken either for evaluating the performance of employeesor for developing them. The evaluation is of two types: telling the employee where hestands and using the data for personnel decisions concerning pay, promotions, etc. Thedevelopmental objectives focus on finding individual and organisational strengths andweaknesses; developing healthy superior-subordinate relations; and offering appropriatecounselling/coaching to the employee with a view to develop his potential in future.Appraisal of employees serves several useful purposes:a.
Compensation decisions:
It can serve as a basis for pay raises. Managers needperformance appraisal to identify employees who are performing at or aboveexpected levels. This approach to compensation is at the heart of the idea thatraises should be given for merit rather than for seniority. Under merit systems,employee receives raises based on performance.b.
 Promotion decisions:
It can serve as a useful basis for job change or promotion.When merit is the basis for reward, the person doing the best job receives thepromotion. If relevant work aspects are measured properly, it helps in minimisingfeelings of frustration of those who are not promoted.c.
Training and development programmes:
It can serve as a guide for formulatinga suitable training and development programme. Performance appraisal can informemployees about their progress and tell them what skills they need to develop tobecome eligible for pay raises or promotions or both.d.
Performance appraisal enables the employee to know how well he isdoing on the job. It tells him what he can do to improve his present performanceand go up the ‘organisational ladder’.e.
 Personal development:
Performance appraisal can help reveal the causes of goodand poor employee performance. Through discussions with individual employees,a line manager can find out why they perform as they do and what steps can beinitiated to improve their performance.

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