Performance Appraisal

Performance Appraisal :
Performance Appraisal (PA) refers to all those procedures that are used to evaluate the personality, performance, potential, of its group members

Relationship between jab analysis and performance appraisal:
Job analysis performance standards Translate job Into levels of To acceptable Or unacceptable performance performance appraisal Describes the Job relevant strengths and weakness of Each individual

Describes work & Personnel Requirement Of a particular job

Question arises?
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Why do we measure performance? Effective performance appraisal systems How do we measure performance?

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It is a step by step process It examine the employee strengths and weaknesses Scientific and objective study Ongoing and continuous process Secure information for making correct decisions on employees

Needs and Objectives:
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Provide feedback about employees Provide database Diagnose the S & W of individuals Provide coaching, counseling, career planning to subordinates Develop positive relation and reduce grievance Facilitates research in personnel management

Appraisal Benefits (cont.)

Appraisals offer employees:
 Direction  Feedback  Input  Motivation

Appraisal Benefits

Appraisals offer the company:
 Documentation  Employee  Feedback  Legal


protection  Motivation system

Why Appraisals Are Important

•Recognize accomplishments •Guide progress •Improve performance

Why Important (cont.)
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Review performance Set goals Identify problems Discuss career advancement

Steps in performance appraisal
Establishing job standards Designing an appraisal programme Appraise performance Performance interview Use appraisal data For appropriate purpose

Process of PA
Taking corrective standards Setting performance standards Communicating standards

Discussing results Comparing standards

Measuring standards

Issues in appraisal system
Formal and informal What methods? Whose performance? Who are the raters?

When to evaluate? Appraisal Design?

What to evaluate? How to solve?

What problems?

What to evaluate? (Philip Model)
H Potential L L Problem children Planned separation stars Social citizen H


How PA contribute to firm’s competitive advantages
Improving performance Values and behavior Competitive advantage Minimizing dissatisfaction And turnover Ensuring legal competence Making correct decision

Problems in performance appraisal

Errors In rating  Halo effects  Stereotyping  Central tendency  Constant error  Personal bias  Spill over effect

Problems in performance appraisal (Cont’d)
1. 2. 3. 4. 5.

Incompetence Negative approach Multiple objectives Resistance Lack of knowledge

Essentials of an effective appraisal system
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Mutual trust Clear objectives Standardizations Training Job relatedness Documentation Feedback and participation Individual differences Post appraisal review Review and appeal

Appraisals and Discrimination
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Title VII ADA Other fair employment Laws

Discrimination (cont.)
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Failure to communicate standards Failure to give timely feedback Failure to allow employees to correct performance Inconsistency in measuring performance Failure to document performance objectively

Appraisal Forms
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Define performance expectations Describe measurement tools Use a rating system Cover specific examples Set measurable goals

Measure Performance
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Measurement systems need to be: Specific Fair Consistent Clear Useful

Measure Performance (cont.)
Systems can be:  Numerical  Textual  Management by Objective (MBO)  Behavior oriented

Document Performance
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Make sure documentation is objective Document performance of all employees Provide complete and accurate information Document performance on a regular basis

Set Goals….
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Based on job requirements Realistic Measurable Observable Challenging Prioritized

Employee Input

Employees take an active role:
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Setting goals Designing action plans Identifying strengths and weaknesses Employees participate in the PA meeting

Employees:  Review performance  Think about new goals

Preparation (cont.)
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Review performance Complete written appraisal Think about new goals Schedule time and place

Start the Meeting
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Lay out agenda Talk about money Encourage input Give good news first

During the Meeting
Review performance:  Based on previous goals  Noting strengths and accomplishments  Identifying areas for improvement

Presentation Tips
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Focus on the professional Give objective examples Invite response Listen actively Create “we” mentality

During the Meeting (cont.)
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Set goals: Based on company goals Building on areas that need improvement

End the Meeting
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Encourage good performance Lay out action plan Communicate outcome of goals not met Confirm understanding

Continuous Feedback
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Formal appraisals Informal appraisals Open communication

Recognize Good Performance
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Verbal Public Tangible Monetary

Identify Poor Performance
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Act early Take the right approach Deal with employee reaction Handle continued poor performance

Discipline Poor Performance
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Recognize problems Talk with employee Follow company policy

Handle Hard Cases
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Reviewing highly emotional employees Rating former peers

Key Points to Remember

You must conduct objective appraisals on a scheduled basis. Appraisals tell employees how they’re doing and how they can improve. Appraisals help create a system of motivation and rewards based on performance.

Performance Appraisal Methods

Individual Evaluation Methods  Confidential report  Essay evaluation  Critical incidents  Checklists  Graphic rating scale  Behaviorally anchored rating scale  MBO

Critical Incident method
Ex: A fire, sudden breakdown, accident Workers A B C D E reaction informed the supervisor immediately Become anxious on loss of output tried to repair the machine Complained for poor maintenance was happy to forced test scale 5 4 3 2 1

Checklist method
•Simple checklist method •Weighted checklist method •Forced choice method

Simple checklist method:
Is employee regular Is employee respected by subordinate Is employee helpful Does he follow instruction Does he keep the equipment in order Y/N Y/N Y/N Y/N Y/N

Weighted checklist method
weights Regularity Loyalty Willing to help Quality of work Relationship 0.5 1.5 1.5 1.5 2.0 performance rating (scale 1 to 5 )

Forced choice method
Criteria 1.Regularity on the job •Always regular •Inform in advance for delay •Never regular •Remain absent •Neither regular nor irregular Most Rating Least

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 _ Dependability Initiative Overall output Attendance Attitude Cooperation Total score Continuous Rating Scale



No Interest


Very enthusiastic

Discontinuous Rating Scale

BARS( behaviorally Anchored rating scale)
Step 1. Step 2. Step 3. Step 4. Step 5. Identify critical incidents Select performance dimension Retranslate the incidents Assign scales to incidents Develop final instrument

MBO Process
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Set organizational goals Defining performance target Performance review feedback

Performance Appraisal Methods

Group Appraisal
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Ranking Paired comparison Forced distribution Performance tests Field review technique

Ranking method
Employee A B C D E Rank 2 1 3 5 4

Paired comparison method
A B C D E A + + B + C D + + + E Final Rank + 3 + + + 2 1 4 5

No of Positive evaluation Total no. of evaluation * 100 = employee superior evaluation

Forced Distribution method
No. of employees 10% 20% 40% 20% 10% Excellent poor Below average good average Force distribution curve

Field review method
Performance Dimension Leadership Communication Interpersonal skills Decision making Technical skills Motivation subordinate peers ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ superior customer ^

Performance criteria for executives

For top managers
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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
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Departmental performance Coordination among employees Degree of upward communication from supervisors Degree of clarity about corporate goals and policies

For supervisors
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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

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