Professional Documents
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1. LEARNING OBJECTIVE 2. INTRODUCTION 3. OBJECTIVE OF PERFORMANCE APPRAISAL 4. DEVELOPING THE PERFORMANCE APPRAISAL SYSTEM 5. INTRODUCING & OPERATION OF PERFORMANCE APPRAISAL SYSTEM 6. MONITORING & EVALUATING PERFORMANCE APPRAISAL 7. PROCESS OF PERFORMANC APPRAISAL 8. PERFORMANCE CRITERIA 9. BENEFITS OF PERFORMANCE APPRAISAL 10.CONSTRAINTS 11.NEW TRENDS IN PERFORMANDE APPRAISAL SYSTEM
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LEARNING OBJECTIVES
This lesson is an insight into the following topics related to performance appraisal: What is performance appraisal What are the objectives of performance appraisal What are the different types of performance appraisal
INTRODUCTION:Organizations are run and steered by people. It is through people that goals are set and objectives realized. The performance of an organization is, thus, dependent upon the sum total of the performance of its members. According to Peter Drucker, an organization is like a tune. It is not constituted by individual sounds but by their synthesis. The success of an organization, therefore, depends on its ability to accurately measure the performance of its members and use it objectively to optimize them as vital resources. The performance of an employee is his resultant behavior on task which can be observed and evaluated. It refers to the contribution made by an individual in the accomplishment of organizational objectives. Performance can be measured by combining quantity, quality, time and cost. People do not learn unless they are given feedback on the results of their actions. For learning to take place, feedback should be provided regularly and it should register both successes and failures. It should also follow soon after the relevant action or actions. Performance appraisal system provides management an opportunity to recall as well as give feedback to people. This feedback is pertaining the performance of the worker. This helps them to correct their mistakes and acquire new skills. Performance appraisal (PA) refers to all those procedures that are used to evaluate the personality, the performance and the potential of its group members. Evaluation is different from judgment. The former is concerned with performance and the latter is concerned with the individual. While evaluation deals with achievement of goals, a judgment has an undercurrent of personal attack and is likely to evoke resistance. Performance appraisal could be informal or formal. Informal performance appraisal is a continuous process of feeding back information to the subordinates about how well they are doing their work in the organization. The informal appraisal is conducted on a day-today basis. For example, the manager spontaneously mentions that a particular piece of work was well performed or poorly performed. It is due to the close connection between the behavior and the feedback on it, the informal appraisal quickly encourages desirable performance and discourages undesirable performance
before it becomes permanently ingrained. Therefore, informal appraisal should not be perceived merely as a casual occurrence but as an important activity and an integral part of the organizations culture. The formal performance appraisal occurs usually annually on formal basis and involves appraise and appraiser in finding answers to the following questions: 1. What performance level has to be achieved during the period? 2. Has it been achieved? 3. What has been the shortfall and constraints? 4. What are we going to do now? 5. How will we know that we have done it? 6. What kind of feedback can be expected? 7. What assistance can be expected to improve performance? 8. What rewards and opportunities are likely to follow from the performance appraisal? When the employees have this type of information, they are aware of the following specifications:1. What the organization expects from them? 2. What assistance is available? 3. What can they expect when the required level of performance is achieved? This increases employee acceptance of the appraisal process and results in the trust that the employee has in the organization. An environment that affords an opportunity for further growth while minimizing stressful situations certainly enhances appraisal acceptance. Establishing this type of environment goes far beyond the performance appraisal process. Every aspect of managing people and their work relates to the improvement of their quality of work life. Performance appraisal is an integral part of a trusting, healthy and happy work environment that goes a long way in promoting the same. Performance appraisal has been used for the following three purposes: Remedial Maintenance Development A performance appraisal needs to cover all these three purposes with the same focus. If any purpose predominates, the system becomes out of balance. For instance, if remedial purpose is foremost, then the performance appraisal may become a disciplinary tool, a form of a charge sheet and a tool of power instead of instrument of evaluation. Sometimes maintenance becomes the main objective for an organization. In this case, the process may become short, skimped and per functionary ritual. If there is
too much emphasis on development, then the focus falls on the future assignment rather than on the current job.
9. Improving communication Performance appraisal serves as a mechanism for communication between superiors and subordinates.
needs to pay attention to each point against a background of an understanding of the objectives to be attained and the culture and structure of the organization. Particular attention needs to be given to the development of rating plans and document design. When designing performance appraisal forms, the aim should be to keep them as simple and brief as possible while allowing ample white space for comments. It is desirable to issue an overall description of performance appraisal system to all concerned which sets out its objectives and methods of operation. It also clarifies the benefits that need to be achieved for the organization and its employees. 9. Pilot test. The whole PA system cannot be pilot tested because the cycle lasts generally for 12 months. Performance appraisal includes drawing up performance agreements, objective setting, document completion etc. These can pilot tested. Based on the experience gained, the system may be fine-tuned. 10. Plan implementation program. The implementation program should cover the following: Date of introducing performance appraisal in the whole or different parts of the organization Procedure for evaluating the process Briefing or training program
TRAINING
The importance of thorough training for both appraisers and appraise, in the skills required to carry out performance appraisal effectively, cannot be overemphasized. Both parties in the performance appraisal process need guidance and training in the preparation of the following: Performance agreements and plans Conducting performance reviews Completing review forms There is also a need to develop skills required to conduct appraisal discussions, including interpersonal skills. Training can be provided by formal courses or workshops. It is probably best to develop a series of training modules, as it might be difficult to get people to go through all the training required at one time. It is believed that people are unable to absorb information at one go. The modules could consist of the following: Introduction to performance appraisal system Defining key tasks and setting objectives Working with attributes and competence Preparing performance and development plans Conducting appraisal discussions Rating Providing feedback Coaching and counseling
performance appraisal. It may be difficult to establish a direct connection. However, more detailed assessment with managers and staff on the impact of the process may reveal specific areas in which there have been improvements.
PERFORMANCE CRITERIA
In order to be effective, the criteria for performance appraisal should be genuinely related to success or failure in the job and should be amenable to objective judgment. It should also be easy for the appraisers to administer and appear just and relevant to the employees. They need to strike a fair balance between sensitivity to the needs of the present job and applicability to the organization. The earlier concept of merit rating has yielded place to performance appraisal. In the merit rating system, merit was based upon personality traits such as leadership, ability to get along with others, decisiveness, creativity, industry, judgment, initiative and drive. It is difficult to apply this system reliably since it demands too much on the quality of personal relationships rather than workers performance. Personality measurement is somewhat dangerous because we usually like to quantify. The focus earlier was on what he is. In performance appraisal, the focus is shifted to how he performs in work-oriented activities such as job knowledge, accuracy, clarity, analytical mind and ability to carry on operations to their logical ends. Performance appraisal is based on competence, contribution and commitment. It is not based on chance, chemistry and convenience. Merit rating was generally used for blue-collared jobs. Performance appraisal, on the other hand, is more comprehensive and can be used for all of the following categories: Workers Supervisors Managers Management by objective (MBO) is an example of performance based appraisal approach that involves setting objectives and comparing performance against the objectives. Objectives give greater freedom to both management and the employees in deciding how performance is to be measured. They also have greater motivational effect since the standards are discussed and agreed upon both by the management and the employees.
3. Benefits for the organization are as follows: Improved performance throughout the organization Creation of a culture of continuous improvement and success Conveyance of message that people are valued The above benefits can be realized only if performance appraisal is considered as a process of management. It should not become a scheme devised by the personnel department for managers to use in accordance with the directives of that department and generate completed forms which are stored away in employees dossiers and then forgotten. Performance appraisal is a process for establishing sound understanding about what is to be achieved and an approach to manage and develop people. This helps in increasing the probability of achieving the short-term goals and long-term goals. Performance appraisal helps management to collect data on human resources and use it for enhancing responsiveness of the organization. Since it is people who perform appraisal and since people have emotions, there will always be some subjectivity. Though criterion could be stipulated, personal likings and biases are likely to influence the evaluation. Every assessor has a price-expectation of a particular type of behavior. An appraisee, who meets it, gets higher assessment. Being subjective in nature, there are certain pitfalls which need to be guarded against. The issue of performance appraisal is very sensitive to the appraisee because it affects his/her present position (status, and self esteem) and career growth. Performance appraisal system should not only be fair, equitable and transparent, but it should be perceived to be so. This can happen only if the system has in-built transparency. Some of the common pitfalls encountered in performance appraisal are mentioned below:1. Shifting standards Performance appraisal should be based on uniform and fair standards. In absence of this, the employees can get confused and the organization might not be able to decide as to who is suitable for promotion. Let us consider a hypothetical situation. In a given year, quality can be the criteria for performance evaluation. The boss can change that in a current year and decides to judge the employees on the basis of quantity of work. 2. Different raters patterns Managers differ in rating style. Some rate harshly whereas others are quite lenient. This can be reduced by precise definition on the appraisal form. For instance, dependability may be defined as the confidence you have in the employee to carry out instructions and the extent to which you can rely on his/her ability, punctuality and attendance. Subjectivity can also be moderated through a multi-layer appraisal system.
In this system, the immediate superior initiates the report which is reviewed by next the higher authority. 3. Central tendency Many appraisal forms require the appraiser to justify outstanding or poor assessments. Many of such raters may prefer an easier path of rating most people as average. 4. First impression Some raters may form an overall impression based on some specific qualities or features of the ratee in the first meeting itself and carry it forward. Making assessment on too short a time span and inadequate knowledge can sometimes prove incorrect. 5. Latest behavior At times, the appraisal is influenced by the most recent behavior, ignoring the most commonly engendered behavior during the entire period. Thus, a usually sober person may be treated as arrogant because he expressed his/her opinion. 6. Halo effect Some raters have a tendency to rate high/low on all performance measures based on one of their characteristics. For example, an employee who is just an average work performer but is very good in cricket and plays Ranji trophy may be given high overall rating. One who does not shave regularly may be assessed as lazy at workplace also. Rating employees on each of the performance measures can reduce this. 7. Horn effect Highly critical bosses have a tendency to compare performance of their subordinates with what they did. This is not correct because the performance also depends upon the situation. For example, a salesman now operates in a buyers market as against the sellers market of yesteryears. 8. Stereotyping (Raters Bias) Some raters have a standard mental picture about a person because of that persons sex, color, caste, religion, age, style of-clothing, political view etc. Stereotyping results in an oversimplified view. Such assessments are based on false assumptions/feelings, rather than facts. Discretion should not become discrimination. 9. Spill over effect--
This is allowing past performance to influence present evaluation. In some organizations, when an employee reports on transfer, his earlier reports are also transferred along. This biases the mind of the new boss. There are other pitfalls such as taking too short appraisal interviews and failing to support opinions with evidence, inadequate briefing of the appraisee and pre-judging performance. In some organizations, such as PSUs, there is a system called CCR (Character Confidential Rol1). East India Co started this system. Since it is confidential, it can be manipulated. The corporate world soon realized its disadvantages and introduced self-appraisal systems.
CONSTRAINTS
An interaction with over 100 managers of various backgrounds in BHEL highlighted the following common constraints in implementing performance feedback, as perceived by them: A work culture not so conducive to proper giving and receiving of feedback Lack of appreciation about the philosophy and benefits of performance feedback Lack of willingness of superiors/top management in adopting this practice Fears and apprehensions about the use of performance feedback outcomes Confidentiality in the existing performance appraisal system Interference by the trade unions in case of workers Lack of proper system or procedure Lack of accountability Lack of clarity on role, goal, job demands etc No direct linkages of performance feedback system with rewards or punishment Lack of proper skill in performance analysis and giving feedback Constraint of time availability Personal bias and subjectivity Non-uniformity in the criteria of performance analysis Lack of trust and openness in people and conservativeness Heterogeneous interest Low motivation
In this system, supervisors appraise the performance of subordinates without involving the latter. This method is most commonly used in government organizations. However, it suffers from the prejudiced approach and the ability of the superiors. The validity of the system can be improved by basing it on performance. The various methods which are used under this system are as follows: Ranking method Paired comparison method Graphic rating scales method Forced choice list method Critical incidence method Forced distribution method
Feedback on appraisal information
In this system, the appraisee is informed about his/her strong and weak points. The person is given an opportunity to defend himself/herself in terms of constraints or weaknesses. This system leads to greater satisfaction and higher work performance due to participative approach. Meyer suggests that the goal of the appraisal should be to improve the future performance of subordinates and, therefore, suggested that performance appraisal should be made a continuous process rather than a yearly feature.
Field review technique
In this technique, the appraiser goes to the field (e.g. shop floor) and obtains the information about work performance of the employee by way of questioning the said individual, the peer group and the superiors. The information received about how he is performing helps the appraiser in defining the profile of the employee. Rating by self and the peer group-- In this method, the employee appraisal is done independently at the following three levels:
The employee The peer group The superior HRD department analyzes these appraisal reports and draws a profile based on common aspects. 360o performance appraisal-- This is a new concept in performance appraisal, where the feedback is collected from all around the employee, the superior, the subordinates, the peer group and the customers. The evaluation is very comprehensive in terms of the employees skills, abilities, styles and job-related competencies. This system has the following advantages: Higher validity and reliability of the evaluation Self-evaluation by the employees gets compared with the perception of others Helps in maximizing employee potential in the face of challenges
of vertical jumps possible within the flattened hierarchy. They are required to dismantle the promotion mindset in their employees, equate growth with lateral movement and move toward a designation-less structure. In this case, companies have to listen to their employees before finalizing the form of rewards. It is only then that the process of linking pay packets to performance actually payoff. Some of the emerging techniques of performance appraisal adopted by companies like Phillips, Reckitt and Coleman, Godrej and Boyce, Glaxo, Cadbury India, and Mastek are enlisted below: 1. Narrative essay- A candid statement from a ratee. 2. Simple ranking- Order of rating from best to worst. 3. Alternation ranking- Alternating from top to bottom of list. 4. Paired comparison- Comparing rates to one another. 5. Forced distribution- One-to-one comparison. 6. Behavioral checklist- A descriptive rating. 7. Critical incident- Evaluation based on key incidents. 8. Graphic rating scale- Standardized, quantitative rating. 9. BARS- Rating in behavioral terms. 10. MBO- Measuring performance against results. 11. Work planning review- Emphasizes process over outcomes. 12. Immediate superiors- Feedback from immediate boss. 13. Self-appraisal- Evaluation by ratee. 14. Peer-group appraisal- Evaluation by team members. 15. Upward appraisal- Evaluation by subordinates. 16. 360-degree appraisal- Evaluation by boss peers and subordinates. 17. Assessment centers- Assessment based on response to a battery of tests.
has concentrated on people who are at the more senior levels in an organization. This includes directors, managers, senior executives in companies and partners or principals in the profession. However, as organizations are beginning to appreciate the power and value of such measurement, other jobholders find that their behavior also comes under the microscope. Engineers, pilots, sales people, HR professionals, customer service staff etc., have all participated in this assessment and feedback process. Certain specific benefits of the 360o feedback system are as follows: Self development and individual counseling Part of organized training and development Team building Performance management Strategic or organizational development Validation of training and other initiatives Remuneration The 360o feedback system can be used in any organization for the above purposes. It is believed that the impact of this feedback on an organization is very beneficial. The technique presents feedback in a powerful way and can have impact on the quantity or quality of performance data, communications, staff motivation and the roles of those involved. However, this system is not a quick process. The 3600 feedback has become popular recently because of a change in the expectation that organizations have from their employees. This is through the increasing emphasis on performance measurement, change in major management concepts and more receptive attitudes.
The goal of this system is to continuously improve the performance of employees and the organization in general. Here, each individual has primary responsibilities for his/her performance. Therefore, the stress is primarily on development rather than evaluation. This system is employee driven. The key role of a manager is to support employees to maximize their potential and achievement. Hence, this system emphasizes upon the success of the company which is enhanced through clear link between corporate strategies and individual goals. The outcome of this achievement
system leads to visible changes in the organizational functioning and moving toward a more optimistic climate.
2. Team appraisals
This concept focuses upon appraising the performance of the team rather than an individual team member. The assessment of every team member is made accordingly. Digital Corporation USA is currently using this system. The main features of this system are as follows: It involves team members in decisions affecting the team Individuals are involved in day-to-day activities It includes self-appraisal, appraisal by peers and review of performance in a group by review committee. This prevents extensively documented job description and job requirement reports. In the organizational setting, most people are interested in evaluating others by appraising performance. They are hardly prepared themselves to be evaluated. Hence, it is a real challenge for HR professionals to make the appraisal system more pragmatic to ensure that people trust in the system. So long as a human being evaluates another, there is some subjectivity in the assessment. Thus, it is essential to balance the subjectivity and objectivity in the appraisal system to make it people oriented, workable and productive. Moreover, the purpose of the system should be more developmental rather than punitive in natures
BIBLIOGRAPHY
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