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    HRM BOOK

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    HRM BOOK

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    88 views15 pages

    HRM Chapter 8

    Uploaded by

    Klester Kim Sauro Zita
    HRM BOOK

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 15
    Chapter & MANAGEMENT OF PERFORMANCE APPRAISAL SYSTEM OBJECTIV! After this lesson, you should be able to: + Give the meaning of performance appraisal and give examples; + Know and understand the purposes of performance appraisal; State the different criteria in the development of measuring instruments + Learn how to evaluate the performance of an employee and communicate the results of the appraisal in a way that the employee will understand; and Identify the different approaches to performance management. Scanned with CamScanner gement. It is _ ‘ tive Performance appraisal is one of the major keys ee position. Performance basis for determining who should be promoted to @ ive at an objective appraisal is a process of evaluating an individual in order development because Homan resource decision. It is also important for managem™ens “e. quite difficult to Fo ere crenths al weakngase are not established ey atthe right determine whether development efforts of the ‘organization are enanagement. Ifa direction, Appraisal is truly an integral part of the total SYS" or a university iS to business corporation a government agency, a religious institu oh formance must be reach its goals and objectives, ways of accurate measurement of perfo identified, established and implemented. : jtimate desire of focused on the legitima’é © isal should fee see of integrating organizational which can be a part ncement, can t organizational and Effective performance apprai employees for progress in their professions. ©: demands and individual needs is through career advat of the performance appraisal. The appraisal serves differen' individual needs. The Purposes of Performance Appraisal 1. Strategic Purpose em should link employee activities with the organizations goals and objectives. These strategies are implemented through defining results, behavior and to some extent employee characteristics Fee teceseery for carrying out the predetermined goals and objectives: Management should then develop the measuring instruments and the feedback systems necessary for carrying out strategic purposes that exhibit d the produced results. To the characteristics engaged in the behaviors an ihieve this strategic purpose, the system must be flexible because, when goals and strategies change the results, behaviors and employee characteristics sewally need to change correspondingly. While these performance strategies are definitive of organizational effectiveness, the system focuses more on Sdministrative and developmental purposes. The performance management syst 2, Administrative Purpose Performance management information relative to performance appraisal points to the use of evaluation in decisions for salary adjustments, promotion, P tention and termination, lay off and recognition of individual performance. The purpose of the evaluation and appraisal program is usually hampered by the human element of compassion and many times supervisors and managers see the process as a necessary evil to fulfil their job requirements. The tend to evaluate everyone high or at least rate them average making the a real information relatively useless. S ‘PP! 3, Developmental Purpose The third purpose of performance management i is te who are effective in their jobs. When employees are not pees ee 7 4 126 Scanned with CamScanner they should, performance management seeks to improve their performance. ‘The feedback given during the performance evaltation process often pinpoltt the employees’ weaknesses. Ideally, however the performance management system must identify not only the deficient aspects of the employees performance but also the relative causes of these deficiencies, like lack of skills in performing the tasks, the motivational problem in the work place, and some related problems with employees holding back efficient performance. The Criteria in the Development of a Measuring Instrument n the factors to be measured \d judicious selection traits or .d as bases for evaluating the adopted. The haracteristics ‘hat the traits The value of a performance rating depends upo! and the extent of its validity and reliability. Care ani characteristics and other observable factors to be use employees’ performance are basic in designing the rating form to be instruments must measure what they intend to measure. The traits or cl must be clearly defined so that the raters will have no doubt about w! mean. 1. Validity - is the extent to which the performance measure assesses all the relevant aspects of the performance. Often it is referred to as content validity. Ratings are valid if they are accurate measures of the employees’ performance. It refers to the accuracy of the ratings in differentiating each employee in a group in terms of actual job performance. The rating scale must be able to show the degree of the employees’ efficiency in the performance of his assigned tasks or duties and responsibilities. It is not quite easy to develop the performance rating instruments because we have to set standards against which to compare results, We have to compare the employees’ records and work performance which are not usually available or available only in certain kinds of jobs. In some cases, they are not expressed in measurable terms. 2. Reliability - Rating may be considered reliable if they are consistent. They are consistent if the individual employee in a group receives essentially the same ratings when evaluated at least twice by the same rate at different times or by different raters who are familiar with the work of the employee and have observed him perform his job. ‘The same supervisor should rate the employee twice without reference to the previous ratings and compare the results later to find out ifthe rating given is almost similar or closely the same, thereby determining the consistency of the evaluation. The other test of consistency is when the supervisor and the manager rate the same person and the results are not very far from each other. 3. Acceptability -refers to whether the people who use the performance measure accept it. Many very elaborate performance measures are extremely valid and reliable yet many managers and supervisors do not want to use them as they consume so much time. Other employees may not want to be evaluated with the set of rating instrument, as they have to submit a lot of paper work to prove their ratings. 127 Scanned with CamScanner —_——————— ee Specificity ~ is te extent to which the performance measure BiVeS Se Buidelines to employees about-what is expected of them a ee ese expectati Gfidty is relevant (0 developmental purposes of ee eat Ifthe measure does not specify what the employee must do to help the company achieve its strategie Boals, it becomes difficult to achieve its strategic purpose. The instrument must be able to pinpoint the employees’ performance problems or it becomes impossible for the employees to correct their performance. The development of a performance appraisal system must be Properly studied by the HRD and the instruments must be pilot-tested on the basis of the above criteria. The panel of the committee must be involved in the test run. of the instrument. Developing and Administering an Appraisal Plan Performance appraisal is a line responsibility to be met with the assistance of the human resource management and his staff. Any plan will be worthless if it lacks the support of top management, if supervisors are poorly trained in systematic appraisal or are not convinced of its value, if discussions of results are badly handled, or if appraisals are not properly used for the purpose which they are intended. These and other difficulties often’ prevent the successful operation of the systematic program. ‘There are certain guidelines in developing and understanding an appraisal plan using the following steps: 1. Secure full agreement of line managers about the need for a formal performance appraisal plan and for the purpose in which it will be used. A choice has to be made among several types of appraisal plans. 2. Secure plans of their companies and existing literature on the subject to develop a plan best suited for the needs of the particular organization. The HRD should study all other plans and make a careful analysis as to their suitability into the organization. Complicated plans should be avoided. 3. Enlist the cooperation of the supervisor in drawing up the appraisal plan. Discuss the factors to be used and the uniform descriptions or instructions to be followed. 4, Make sure that the purposes and nature of the performance appraisal plan are explained to those who will make the appraisal. These are the first level supervisors and department heads and those who will be affected by the appraisal. 5. Provide training to those who will use the instruments, Training will provide enough knowledge on how the rating scale will be used to avoid biases and provide uniform appraisal of the employees. 6. Develop and achieve line and staff coordination. There should exist a mutual checking of employees’ performance appraisal in order to be consistent and !0. provide uniform within and between departments, x 128 Scanned with CamScanner 7. Arrange for periodic discussion of the performance appraisal. Supervisors and their subordinates should discuss the good points, the difficulties and the lapses in the performance appraisal. Supervisors should encourage better performance, The employee has the right to know his standing in the organization and to know his progress in his performance. 8. The appraisal system should be carefully used in selecting employees for possible promotions, 9. Provide for challenges and review of performance appraisal. The grievance Procedure should be put in place if the employee is not satisfied with the rating given to him. In case there is a company union, the union representative should be entitled to challenge personnel decisions. - A systematic performance appraisal plan helps supervisors to thoroughly review the performance of their employees, and this probably is the greatest value in any organization. Line managers should participate from the start of the development of the program, for it is their line responsibility to evaluate employee performance. Approaches to Performance Management There are various approaches to the development of performance instruments that could be used by different organizations depending on their goals and objectives. Some performance instruments focus on employee attributes, behavior, and results and some are focused on overall comparison of individual performance. Other organizations focus on quality and quantity of work performed and some observable characteristics in the performance of their jobs. The following are the approaches used by various organizations: 1. Comparative Approach The comparative approach of performance measurement consists of techniques that require the rater to compare the individual's performance with that of others. This approach usually uses some overall assessment of the individual's Performance or worth, and seck to develop some ranking of the individual within a given work group. The following are the techniques under this approach: a. Ranking ~This method provides a comparison of the relative qualities of performance among all the employees in a group or unit. The employees to be rated are ranked from the most efficient to the less capable in each traits or quality used judging the employees’ performance. Some of the traits or qualities are: quality of work, dependability, judgment, attendance and attitude towend the job. The employees are ranked for each trait and as many times as there are traits on which the employees are to be rated. Thus the employee may be ranked first in quality of work accomplished, second in reliability, third i, judgment and so on. Scanned with CamScanner Name Dept. i Last First MI Job performance: i loyee? How satisfactory is the present job performance of this employee’ ; a ity of work, | Note: Consider such item as general productivity, quality © TY specific job knowledge, safety, industry, dependability, 0° Perseverance. : Number of employees ranked _-__— } This employee's rank (No. 1 in high) Sara Leave Blank___ (—_—_—) Ranked by _/__—_-______—— Date: Form for Rank Order Method of Rating, ._ Forced Distribution Technique - this system uses a five pointjob performance _ scale in rating employees who are doing similar jobs. Under this method, it is assumed that a normal group or workers doing similar jobs fall into some such levels as Superior, Above Average, Average, Below Average and Poor, The common group percentage would be 5-20-50-20-5. This means that 5 of his subordinates are superior, 20 are above average, 50 are average, 20 are below average and 5 are poor. Paired Comparison Method - Under this method the name of each employee who is to be rated is written on the card. Each employee to be rated is then off _ paired with every other employee in the same unit. In the process, the person ating the employee determines which of the two employees in each pair is superior in terms of the trait being considered. The pairing may be made for such traits as quantity of work output, quality of work done, cooperation, and job attitude. The pairing is repeated for each trait and for all employees in the unit, Cards are used for convenience in pairing, each card bearing the name of an employee. To determine the ranking of the employee, a tally is scale. The employees are evaluated individually and the rater circles the number” that signifies how many traits or characteristics the individual has, The highest points five (5) representing superior, four (4) above average, three (3) average, two (2) below average and one (1) as poor. if |. The Checklist Method - This rating method factors with corresponding definitions for ev. Scanned with CamScanner in the left hand column of the form such as quantity of work done, quality of work, attitude towards work, judgment, reliability, cooperation, punctuality and others. The rater checks the statements that most nearly describe the Performance of the employee being rated during the rating period. Some companies using this method assign point values for each trait or factor, making a combination of the descriptive phase and the numerical scale. Each statement may be given a corresponding weighted point. The sum of these weighted points corresponding to the statements checked constitutes the employees’ scores, 2. Behavioral Approach The behavioral approach of performance management attempts to define the behavior an employee exhibits to be effective in the job. The various techniques define these behaviors and then require managers to assess the extent to which an employee exhibits them. a. The Critical Incident - The Critical Incident approach requires managers to keep a record of specific examples of effective and ineffective performances on the part of each employee. Itis a narrative report of incidents or occurrences that involve the employee. These incidents are used to give feedback on employees about what they do very well and those that they do poorly. The observation reports could be tied up with the companys’ strategy for effective performance and productivity. The problem related to this technique is that managers have to log weekly or daily the incidents and compare.employees with one another. b, The Behavioral Anchored Rating Scale - This builds on the critical incidents approach. It is designed to specifically define performance dimensions by developing behavioral anchors associated with different levels of performance. In developing the behavioral anchored rating scale, the manager gathers a large number of critical incidents that represent effective and ineffective performance dimensions. The manager and the employee agree on particular incidents and use these anchors in the rating of the employees’ performance. The advantage is that they can increase inter-rater reliability by providing precise and complete definition of the performance dimensions. The disadvantage is that it can provide a biased recall of the incident. c. The Organizational Behavior Modification - This entails managing the behavior of the employees through a formal system of behavioral feedback and reinforcement. It builds on the behaviorist’s view of motivation, which holds that the individuals’ future behavior is determined by past behaviors that have been positively reinforced. It has the following components: They define a set of key behaviors necessary for job performance. . * They use a measurement system to assess whether these behaviors are exhibited. * The manager informs the employees of those behaviors and sets goals for » achievement. * Feedback and reinforcement are provided to the employee. Scanned with CamScanner El 3. The Result Approach measural an a eo approach focuses on managing the objectives, fcydb or work group, This approach assumes that subjectivity a9 Be SOR ne measurement process and that results ae the closest indicator ou n to the organizational effectiveness. We will examine two agement systems that use results: by Objectives is used in a. Management by Objectives (MBO) ~ Management formance management, most companies who believe in results as bases of per! Under this system, the top management defines the companys’ strategic goals and objectives and passes it on to the next level of management and down the line. The manager and subordinates agree on performance indicators and these performance goals are then the points that will be evaluated at the end of a specified period, A good MBO evaluation criterion is when the manager and the supervisor first agree and make clear goals and procedures to follow in a work or a task to be done to get into the realization of the strategic goals. The management provides all necessary support and subordinates make the necessary commitment toward the accomplishment of the set goals and objectives. b. Productivity Measurement and Evaluation System (PROMES) -the goal of this system of measurement is to motivate the employees to go for a higher level of productivity. It is a means of measuring and feeding back productivity information to personnel. The following are the steps in the accomplishment of this evaluation process: The manager and subordinates identify the product and the process of accomplishing the evaluation, plus the level of quality of performance. The indicators are established and will be made’as bases for management evaluation. The staff establishes the contingencies and possible problems related to indicators and the level of evaluation associated with them. ‘A feedback system is developed providing the employees and work group with information about their specific levels of performance on each of the indicators. Problems of Management Appraisal Whatever performance appraisal the organization decides to use, there are s related to its implementation. The organizational culture among our Filipino. problém: : problem in the strict implementation of the performance managers reveals some appraisal system. ome managers are reluctant to appraise their subordinates. People want 0 know their abilities and how well they are performing. The disillusionment that is Scanned with CamScanner still so widespread with respect to managerial performance appraisal comes from the practice of measuring and evaluating, and this causes controversies and misgivings. ‘The problem appears from the things being measured, the standard used and the manner of measurement being done. ‘ Another problem of measurement appraisal is the assumption of traits that is open to question. The connection between performance and possession of specific traits is doubtful. Traits appraisal substitutes someones’ opinion of the individual for what an individual really is. Many supervisors look at these traits ratings as only paperwork exercises that must be done because it is the company policy. Others believe that trait appraisal is vague and confusing, since raters could not observe all the time the employees’ traits and characteristics. Traits evaluation provides few intangible things. There are many possible sources of errors in the performance of the appraisal process. One of the major sources of error is the lack of careful understanding of the rates on the real purpose of management appraisal. There is no simple solution to completely eliminate these errors, but making raters aware through training is usually helpful. To correct some of the fears in the management appraisal system, the following errors should be studied very carefully: 1. Problems of Varying Standards - The manager should avoid using different standards among employees performing similar jobs. This could trigger anger from employees. 2. Recent Effect - the error in which the rater gives greater weight to recent events when appraising an individual performance. This is very true when employees are about to be evaluated; they are early in coming to work and are more prudent in the performance of the assigned tasks. 3. Central Tendency - occurs when employees are incorrectly rated near the average or middle scale. The supervisors who play safe in giving performance ratings usually commit this error. 4. Rater’s Bias - occurs when the rater’s value distorts the rating. It may be unconsciously or quite unintentionally. If a manager has a strong dislike of a certain ethnic group, this bias is likely the result. Regional groupings, age, sex and other arbitrary classifications may be reflected in appraisal if they are not properly designed. Review of the next level manager may help correct this problem. 5. Halo Effect - occurs when a manager rates an employee high or low on all items because of one characteristic. For example, if a worker has few absences, the supervisor might give her a high rating in all other areas of work including quantity and quality of output because of her attendance. The manager may not really think about the employee's other characteristics separately. 6. Contrast Error - it is the tendency to rate people relatively with other people 133 Scanned with CamScanner 7 es oT et ce eee et sae aes ee ar sil than the performance standards. The rating should reflect performance 'gainst the job requirement not against other people. qr te Performance Management Appraisal Feedback Feedback on employees’ performance is an important component of performance management, After jetta ts a completed, it is important to communicate u ae to the employees so that they have a clear understanding of how they stand in the eyes of their immediate superiors and the organization. It is imperative that managers and supervisors discuss their appraisals with employees. § The following should be undertaken to give employees feedback: 1. Feedback as a System a. Data ~are factual informiation regarding observed actions or consequences _ of actions. These are facts that report what happened. 4 b. Evaluation ~ is the way the feedback system reacts to the fact and requires - performance standards. c. Action - a system in which data and ‘evaluation influence action. The } manager gives specific suggestions regarding future actions the employee must take. 2. The Appraisal Interview The appraisal interview presents an opportunity for the manager to talk } ‘about the employees’ potential and also their weaknesses. It could be an emotional experience for the manager and the employees because manager _ must communicate both the praises and the constructive criticisms in the evaluation. In this process, the manager should emphasize more on counselling and development rather than the poor performance of the employees. It should be handled tactfully as employees may feel resentment and conflicts may result which could be reflected in future work relationship. | Effective Performance Management System Regardless of what appraisal system isused, an understanding of what performance management is supposed to do is critical. When performance appraisal is used to develop employees as resources for the companys’ profitability and advancement and Ss instruments for employees’ development, then it will work to the advantage of both management and employees. The key is not which evaluation or appraisal form Wa5 | used, but whether managers and employees understand the purposes. An effective performance management system must be: i | 1. Consistent with the strategic mission and goals of the organization. a 2. Beneficial as a development tool. Scanned with CamScanner 3. Useful as an administrative tool of management 4, Legal and job related. 5. Generally fair and acceptable by the supervisor and the employees. 6. Useful as documentary evidence in all personnel actions. Viewed from this perspective performance management evaluation and appraisal is still considered as a tool effectively developed for a functional organizational system, directed to its growth and development. Organizations, formal or informal need a system of appraisal and an instrument of control. It is therefore important ‘for organizations or companies to develop a well-studied appraisal system that is accepted by the workers and managers and approved by top management. Scanned with CamScanner a

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