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History What is Performance Appraisal Objectives Performance Appraisal Process Sources of Information Methods of Performance Appraisal Performance Criteria at different levels Implementing Meaningful Performance Appraisals Common Errors in Appraisal Process Conclusion: Towards a better PA
• • • • • Roots in the early 20th century The world's second oldest profession PA recognized by US government in 1950 This became evident in the late 1980s The UK (consistent with Europe) Employment Equality (Age) Regulations 2006, made PA popular world wide
. .A Twisty Task . Please Write a One Sentence Definition of Performance Management .
greater stock value and higher sales per employee (or productivity) than companies that didn’t. better cash flow.Quote “Researchers found that companies that used performance management programs had greater profits. stronger stock market performance.” .
” . and get rewarded for doing what they are supposed to be doing.Quotes “The function of work is to produce results.” “If people know what they are supposed to do. get feedback on how they are or are not doing it. companies will be more likely to get the results they desire.
WHAT IS PERFORMANCE? • Job performance represents the contribution that individuals make to the organization that employs them. .
. called performance appraisal.HOW IS PERFORMANCE MEASURED? • The process of measuring what each employee contributes.
” . frequently used as a basis for determining merit increases.” • “OBSERVE and EVALUATE an employee’s work in relation to PRE-SET performance standards.Definitions • “Any system of determining how well an individual employee has performed during a period of time.
Assessment should not be confined to the past alone. • Performance Appraisal (PA) refers to all those procedures that are used in a work activity to evaluate the personality performance potential of its group members.Definitions (contD…) • Performance appraisal is the assessment of an individual’s performance in a systematic way( against well defined benchmarks). . potentials of the employee for future performance must also be assessed. • Performance Management System (PMS) is a process of establishing performance standards and evaluating performance in order to arrive at objective HR decisions and to provide documentation to support personnel actions.
HR programs Communi cation Adminis trative uses Constructive criticism and guidance PA Objectives Organiza tional Maintena nce Pay scales & Pay raise Training and develop ment Documen tation Promotions .
Performance appraisal Process Establish Performance Standards Initiate Corrective Actions-if any Communicate Performance Expectations Compare Actual Prfmnce With Prfmnce Stds Measurement Of Actual Performance .
THREE AND ONE • WHO ? SUPERVISORS DO EVALUATIONS • WHAT ? COMPLETION OF JOB TASKS • WHEN ? NEW EMPLOYEES. 3-6 MONTHS • HOW ? WITH SPECIAL CARE & RESPECT .
The different sources of appraisal .
g. judge and trainer/teacher) • Motivation • Time availability • Friendship 2) Co-Workers (Peers) • Friendship bias • Leniency • High level of accuracy • Best used as a source of feedback .Sources of Information 1) Supervisors (most common) • Role Conflict (e..
expected evaluation from supervisor) 5) Client • Good source of feedback • Negativity bias . view of subordinates.g.Sources of Information (contd…) 3) Self • Lots of knowledge • Leniency effect • Good preparation for performance appraisal meeting (conducive for dialog) 4) Subordinates • Biases (e.. type of job.
Methods Of Appraisal Traditional Methods 1. 2. 360 Degree Application system 7. 4. 3. 2. Multi-person 6. Essay Method. 5. Mgmt By Objectives . 3. Written essay Critical incidents Graphic rating scales Behaviourally Anchored Rating Scale 5. Rating Scale Checklist Forced Choice Forced Distribution Confidential Reports (ACRs) 6. Modern Methods 1. Critical Incident Method 7. 4.
Team Appraisal • Most of the performance appraisals are done on an individual basis.Individual vs. . However. • Companies following TQM principles follow team appraisals as TQM sets for the team assignment of the work rather than individual assignments. modern day organizations have brought the idea of team appraisals to evaluate the performance of a team as a whole instead of appraising performance of individual employees. • This development is due to the fact that organizations are assigning work to teams rather than individuals.
Performance Appraisal Methods • Individual Evaluation Methods – Confidential report – Essay evaluation – Critical incidents – Checklists – Graphic rating scale – Behaviorally anchored rating scale – MBO .
confidential report • Evaluation of Characteristics e. loyalty. attendance • Traditional Method • Prepared without employee’s notice • Performance briefing in different criteria on a regular basis • Characteristics should be easily understandable • Rating scale of report should be maintained as a qualitative reporting . potential.g.
Essay Method Employee is described in a number of broad categories like: Overall impression Strengths and weakness The strength of this method lies in the writing skills and analytical skills of the rater. • • .
Critical Incident method Ex: A fire. 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 . sudden breakdown.
•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 Most •Always regular •Inform in advance for delay •Never regular •Remain absent •Neither regular nor irregular Rating Least
Good Acceptable Fair Poor 5 4 3 2 1 _ Dependability Initiative Overall output Attendance Attitude Cooperation Total score Continuous Rating Scale .Graphic Rating Scale • • Continuous Rating Scale Discontinuous Rating Scale Employee name_________ Deptt_______ Rater’s name ___________ Date________ -----------------------------------------------------------------------Exc.
Discontinuous Rating Scale Indifferent Enthusiastic Attitude No Interest Very enthusiastic Interested .
Identify critical incidents Select performance dimension Retranslate the incidents Assign scales to incidents Develop final instrument . Step 2.BARS( Behaviorally Anchored rating scale) Step 1. Step 5. Step 3. Step 4.
MBO Process • • • • Set organizational goals Defining performance target Performance review Feedback .
” • Setting goal is difficult in MBO. understand what they are. . and work hand-tohand towards the achievement of the set objectives.Management By Objectives • “Management by Objectives (MBO) is a process of agreeing upon objectives within an organization so that management and employees agree to the objectives.
Management By Objectives (MBO) contd… • evaluate employee job performance in terms of the extent to which the employee achieved each of his or her goals during a specified period of time – Goals can be both objective and subjective – Commonly used for managers and professionals .
Five step MBO process Organizational Objectives Reviewed Achievers Rewarded Set Employee Objectives Performance Evaluated Progress Monitored .
Current Global Trends in PA • Trend towards a 360-Degree feedback system • Problems in implementation are anticipated and efforts are being made to overcome them • Team Performance Appraisal • Rank and Yank Strategy • TQM an Performance Appraisal .
Challenges • Determining the evaluation criteria • Lack of competence • Errors in rating and evaluation • Resistance .
Group Appraisal –Ranking –Paired comparison –Forced distribution –Performance tests field review technique –360º performance appraisal .
Ranking method Employee Rank A B C D 2 1 3 5 E 4 .
of evaluation * 100 .Paired comparison method A B A + B C D + + E Final Rank + 3 + 2 C D + - + - - + - + + 1 4 E - - - - - 5 No of Positive evaluation = employee superior evaluation Total no.
of employees 10% poor 20% 40% 20% good 10% excellent below average average Completion of work .Forced Distribution method No.
Field review method Performance Dimension Leadership Communication Interpersonal skills Decision making Technical skills Motivation subordinate peers superior customer ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ .
It is also known as multi-rate feedback. . multisource feedback & multi-source assessment. It is done either by interview method or questionnaire.360º PERFORMANCE APPRAISAL A developmental and/or performance appraisal tool which utilizes multiple-source feedback from people who work most closely with the employee.
Who Does 360º PA? .
leading to increase self-awareness. It encourages self-development. . It increases understanding of the behaviours required to improve personal and organisational effectiveness.Why to use 360º PA? It provides the individual with an opportunity to learn how different colleagues perceive them.
. It increases communication within the organisation.Contd… It promotes a more open culture where giving and receiving feedback is an accepted norm. It can be a powerful trigger for change.
How to implement 360º PA? DEFINE SKILL MODEL EXPLAIN THE PUROSE OF THE PROCESS DISTRIBUTE QUESTIONNAR IES DISCUSS WITH EMPLOYEE PROCESS QUESTIONNARI ES COMPLETE QUESTIONNAI RES PROVIDE FEED BACK .
of employees Time consuming Time consuming Multi-person compares employees with one another MBO 360° apprisl Focuses on end goals. less timebehavior assessed consuming than others BARS Focus on specific n measurable job behaviors Time consuming.Performance Appraisal Methods Method Written essay Advantage Simple to use Disadvantage More a measure of evaluator’s writing ability than of employee’s actual performance Time consuming. results oriented More thorough . diff to dev measures Unwieldy with large no. lack quantification Critical incidents Rich egs behaviorally based Graphic Provide quantitative Do not provide depth of job rating scales data.
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 .
II.Implementing Meaningful Performance Appraisals I. Gather documentation Develop the written appraisal III. Conduct the appraisal interview session .
e) Others’ observations Review supervisor. manager.Implementing Meaningful Performance Appraisals (cont’d) I. Examples: Time clock reports for attendance and tardiness. and awards d) Measurement tools Check documents that support performance rating. Gather Documentation a) Personal observation Observe actual performance and judge results b) Feedback documentation Use performance notes made throughout the year c) Personnel File Examine past performance reviews. discipline records. co-worker comments . etc.
Develop Appraisal Guidelines for writing appraisals a) Set aside dedicated time Gather performance documentation and eliminate interruptions b) Evaluate performance based on expectations Review established expectations. note specific contributions and accomplishments f) Avoid personal and subjective statements No exaggerations. job description. no character attacks . performance goals c) Rate how well expectations were met d) Give honest ratings Acknowledge strengths and address ongoing problems e) Provide specific examples Avoid generalities.Implementing Meaningful Performance Appraisals (cont’d) II.
Conducting the Appraisal Interview session – Common Mistakes a) Manager is ill-prepared b) Employee is not given adequate notice c) Discussion is rushed or interrupted d) Employee is not given the opportunity to comment e) Manager’s tone is punitive or condescending .Implementing Meaningful Performance Appraisals (cont’d) III.
Conducting the Appraisal Interview session .Implementing Meaningful Performance Appraisals (cont’d) III.Maximizing the review 1) Be prepared o Determine discussion direction o Anticipate objectives o Gather supportive documentation Set the right tone o Establish a supportive environment o Private location – Maintain confidentiality o Quiet and undisturbed – eliminate distractions o Level playing field – Avoid superiority o Timing – choose a quiet time o Demonstrate Respect o Timeliness – Conduct reviews by due date o Appointments – Don’t act like the employee’s time is less valuable o Advance notice – Allow the employee to be prepared o Icebreaker – Start on a friendly and relaxed note 2) .
evasive. not brutal.Maximizing the review o Have the best mindset o Tone – Professional and supportive o Focus – Future goals and objectives o Open-mindedness – Seek explanations o Emotions – Calm and centered 3) Communicate Effectively – Avoid communication roadblocks – Vague. poor listening skills. derisive or derogatory language. strong emotions. Conducting the Appraisal Interview session .Implementing Meaningful Performance Appraisals (cont’d) III. be honest. one-way conversation – Improve communication skills – be clear and concise. be an active listener and natural .
4. Use specific and measurable expressions. Avoid comparing the employee to yourself or others. 5. 7. Allow the employee to share his/ her perspectives before you share yours. 3. . Spend time planning for improvement. Be positive and use action oriented behavioral terms. Balance negatives with positives.Appraisal Interviews Following points are to be noted while conducting appraisal interviews: 1. Place the employee at ease with small talk. 6. start with a positive. 2.
a) Potential Emotional Reactions Emotional Distress b) c) Hostility Defensiveness d) Denial .During the Appraisal Process: Interview IV.
but not aggressive o How can you handle it? o Be patient o Offer privacy o Suggest rescheduling o Other ideas? .During the Appraisal Process: Interview IV.employee becomes tearful or angry. Potential Emotional Reactions a) Emotional Distress .
During the Appraisal Process: Interview IV. Potential Emotional Reactions b) Hostility .employee channels his/her emotions into aggression o How can you handle it? o Be patient o Offer privacy o Suggest rescheduling o Other ideas? .
employee makes excuses o How can you handle it? – Listen objectively – Be compassionate – Reinforce expectations – Other Ideas? .During the Appraisal Process: Interview IV. Potential Emotional Reactions c) Defensiveness .
employee insists your evaluation is incorrect o How can you handle it? – Listen objectively – Investigate as necessary – Provide supportive documentation – Other ideas? . Potential Emotional Reactions d) Denial .During the Appraisal Process: Interview IV.
2. 4. 3. 6. Focus comments on the task rather than the person. Combine feedback with goals for improvement. . Remain nonjudgmental. 5. Provide clear examples to support points. Describe behaviors in an unemotional manner. Focus on what is observed rather than underlying causes.Giving Employee Feedback 1.
Halo Error/Horn Error Personal bias Central Tendency Common Errors in the Appraisal Process Appraiser discomfort Lack of objectivity Employee anxiety Leniency / Strictness Recent behavior bias .
Halo / Horn Error • Halo error .Occurs when manager generalizes one positive performance feature or incident to all aspects of employee performance resulting in higher rating • Horn error .Evaluation error occurs when manager generalizes one negative performance feature or incident to all aspects of employee performance resulting in lower rating .
Appraiser Discomfort • Performance appraisal process cuts into manager’s time • Experience can be unpleasant when employee has not performed well .
appearance. and personality are difficult to measure • Factors may have little to do with employee’s job performance • Employee appraisal based primarily on personal characteristics may place evaluator and company in untenable positions .Lack of Objectivity • In rating scales method. commonly used factors such as attitude.
Being unduly critical of employee’s work performance • Worst situation is when firm has both lenient and strict managers and does nothing to level inequities .Giving undeserved high ratings • Strictness .Leniency / Strictness • Leniency .
Recent Behavior Bias • Employee’s behavior often improves and productivity tends to rise several days or weeks before scheduled evaluation • Only natural for rater to remember recent behavior more clearly than actions from more distant past • Maintaining records of performance .
and increased compensation may hinge on results .Employee Anxiety • Evaluation process may create anxiety for appraised employee • Opportunities for promotion. better work assignments.
Central Tendency • Error occurs when employees are incorrectly rated near average or middle of scale • May be encouraged by some rating scale systems requiring evaluator to justify in writing extremely high or extremely low ratings .
or stereotyping. race or age to affect ratings they give • Effects of cultural bias. can influence appraisals • Other factors – Example: mild-mannered employees may be appraised more harshly simply because they do not seriously object to results .Personal Bias (Stereotyping) • Managers allow individual differences such as gender.
Reasons Appraisal Programs Sometimes Fail Lack of top-management information and support Unclear performance standards Rater bias Too many forms to complete Inadequate preparation on the part of the manager Employee is not given clear objectives at the beginning of performance period Overemphasis on uncharacteristic performance Organizational politics or personal relationships judgments Manager may not be trained at evaluation or giving feedback No follow-up and coaching after the evaluation .
Strategies to Better Understand and Measure Job Performance Improve Appraisal Formats Select the Right Raters Understand Why Raters Make Mistakes .
Training Raters to Rate More Accurately Rater-error training to reduce psychometric errors Performance dimension training Performance-standard training .
aptitude. 6) Ensure that evaluators have ample opportunity to observe and rate performance if ratings must be made. or attitude. 5) Use a formal. 2) Use objective and uncontaminated data whenever they are available. 7) Avoid ratings on traits such as dependability. religion.Prescriptions for Legally Defensible Appraisal Systems 1) Ensure that procedures for personnel decisions do not differ as a function of the race. 3) Provide a formal system of review or appeal to resolve disagreements regarding appraisals. sex. 8) Provide documented performance counseling prior to performance.-based termination decisions. standardized system for personnel decisions. drive. national origin. . or age of those affected by such decisions. 4) Use more than one independent evaluator of performance.
The End Thanks for your attention .