ASSIGNMENT ON

SUBMITTED BY
ABHISEK DUTTA
1020102

Introduction:

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A performance appraisal, employee appraisal, performance
review, or (career) development discussion is a method by which the
job performance of an employee is evaluated (generally in terms of
quality, quantity, cost, and time) typically by the corresponding manager
or supervisor. A performance appraisal is a part of guiding and managing
career development. It is the process of obtaining, analyzing, and
recording information about the relative worth of an employee to the
organization. Performance appraisal is an analysis of an employee's
recent successes and failures, personal strengths and weaknesses, and
suitability for promotion or further training. It is also the judgement of an
employee's performance in a job based on considerations other than
productivity alone.

Aims
Generally, the aims of a performance appraisal are to:

• Give employees feedback on performance

• Identify employee training needs
• Document criteria used to allocate organizational rewards
• Form a basis for personnel decisions: salary increases, promotions,
disciplinary actions, bonuses, etc.
• Provide the opportunity for organizational diagnosis and
development
• Facilitate communication between employee and administration
• Validate selection techniques and human resource policies to meet
federal Equal Employment Opportunity requirements.
• To improve performance through counseling, coaching and
development.

Methods
A common approach to assessing performance is to use a numerical or
scalar rating system whereby managers are asked to score an individual
against a number of objectives/attributes. In some companies, employees
receive assessments from their manager, peers, subordinates, and
customers, while also performing a self assessment. This is known as a
360-degree appraisal and forms good communication patterns.

The most popular methods used in the performance appraisal process

include the following:

• Management by objectives
• 360-degree appraisal
• Behavioral observation scale
• Behaviorally anchored rating scales

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Trait-based systems, which rely on factors such as integrity and
conscientiousness, are also commonly used by businesses. The scientific
literature on the subject provides evidence that assessing employees on
factors such as these should be avoided. The reasons for this are twofold:

1) Because trait-based systems are by definition based on personality

traits, they make it difficult for a manager to provide feedback that can
cause positive change in employee performance. This is caused by the
fact that personality dimensions are for the most part static, and while an
employee can change a specific behavior they cannot change their
personality. For example, a person who lacks integrity may stop lying to a
manager because they have been caught, but they still have low integrity
and are likely to lie again when the threat of being caught is gone.

2) Trait-based systems, because they are vague, are more easily

influenced by office politics, causing them to be less reliable as a source
of information on an employee's true performance. The vagueness of
these instruments allows managers to fill them out based on who they
want to/feel should get a raise, rather than basing scores on specific
behaviors employees should/should not be engaging in. These systems
are also more likely to leave a company open to discrimination claims
because a manager can make biased decisions without having to back
them up with specific behavioral information.

Management by objectives:

Management by Objectives (MBO) is a process of defining objectives

within an organization so that management and employees agree to the
objectives and understand what they are in the organization.

The term "management by objectives" was first popularized by Peter

Drucker in his 1954 book 'The Practice of Management'.[1]

The essence of MBO is participative goal setting, choosing course of

actions and decision making. An important part of the MBO is the
measurement and the comparison of the employee’s actual performance
with the standards set. Ideally, when employees themselves have been
involved with the goal setting and choosing the course of action to be
followed by them, they are more likely to fulfill their responsibilities.

Unique features and advantage of the MBO process

The basic principle behind Management by Objectives (MBO) is for

employees to have a clear understanding of the roles and responsibilities
expected of them. They can then understand how their activities relate to
the achievement of the organization. MBO also places importance on
fulfilling the personal goals of each employee.

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Some of the important features and advantages of MBO are:

1. Motivation – Involving employees in the whole process of goal

setting and increasing employee empowerment. This increases
employee job satisfaction and commitment.
2. Better communication and Coordination – Frequent reviews and
interactions between superiors and subordinates helps to maintain
harmonious relationships within the organization and also to solve
many problems.
3. Clarity of goals
4. Subordinates tend to have a higher commitment to objectives they
set for themselves than those imposed on them by another person.
5. Managers can ensure that objectives of the subordinates are linked
to the organization's objectives.

360-degree appraisal:

In human resources or industrial/organizational psychology, 360-degree

feedback, also known as multi-rater feedback, multisource
feedback, or multisource assessment, is feedback that comes from all
around an employee. "360" refers to the 360 degrees in a circle, with an
individual figuratively in the center of the circle. Feedback is provided by
subordinates, peers, and supervisors. It also includes a self-assessment
and, in some cases, feedback from external sources such as customers
and suppliers or other interested stakeholders. It may be contrasted with
"upward feedback," where managers are given feedback by their direct
reports, or a "traditional performance appraisal," where the employees are
most often reviewed only by their managers.

The results from 360-degree feedback are often used by the person
receiving the feedback to plan training and development. Results are also
used by some organizations in making administrative decisions, such as
pay or promotion. When this is the case, the 360 assessment is for
evaluation purposes, and is sometimes called a "360-degree review."
However, there is a great deal of controversy as to whether 360-degree
feedback should be used exclusively for development purposes, or should
be used for appraisal purposes as well (Waldman et al., 1998). There is
also controversy regarding whether 360-degree feedback improves
employee performance, and it has even been suggested that it may
decrease shareholder value (Pfau & Kay, 2002).

Behavioural Observation Scales:

Behavioral observation scales (BOS) were developed for first line foremen.
BOS are similar to behavioral expectation scales (BES) in that both are
based on a job analysis procedure known as the critical incident

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technique. However, the BOS differ from BES in that, in developing BOS,
(a) a group of individuals is observed and rated on a five-point scale as to
the frequency with which they engage in the behavior described by each
incident/statement, (b) a total score for each individual is determined by
summing the observer's responses for each behavioral item, and (c) an
item analysis (or factor analysis, depending upon the sample size) is
conducted to select the most discriminating items. Those items with the
highest correlations with the total score on a scale are retained to form
one behavioral criterion or scale (BOS).

Behaviorally Anchored Rating Scales (BARS) are scales used to rate

performance. BARS are normally presented vertically with scale points
ranging from five to nine. It is an appraisal method that aims to combine
the benefits of narratives, critical incidents, and quantified ratings by
anchoring a quantified scale with specific narrative examples of good,
moderate, and poor performance.

Benefits of BARS

BARS are rating scales that add behavioral scale anchors to traditional
rating scales (e.g. graphic rating scales). In comparison to other rating
scales, BARS are intended to facilitate more accurate ratings of the target
person's behavior or performance. However, whereas the BARS is often
regarded as a superior performance appraisal method, BARS may still
suffer from unreliability, leniency bias and lack of discriminant validity
between performance dimensions.

Developing BARS

BARS can be developed using data collected through the critical incident
technique[6], or through the use of comprehensive data about the tasks
performed by a job incumbent, such as might be collected through a task
analysis. In order to construct BARS several basic steps, outlined below,
are followed.

1. Examples of effective and ineffective behavior related to job are

collected from people with knowledge of job using the critical
incident technique. Alternatively, data may be collected through the
careful examination of data from a recent task analysis.
2. These data are then converted in to performance dimensions. To
convert these data into performance dimensions, examples of
behavior (such as critical incidents) are sorted into homogeneous
groups using the Q-sort technique. Definitions for each group of
behaviors are then written to define each grouping of behaviors as a
performance dimension

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 3. A group of subject matter experts (SMEs) are asked to retranslate
the behavioral examples back into their respective performance
dimensions. At this stage the behaviors for which there is not a high
level of agreement (often 50%- 75%) are discarded while the
behaviors which were retranslated back into their resepctive
performance dimensions with a high level of SME agreement are
retained. The retranslation process helps to ensure that behaviors
are readily identifiable with their respective performance
dimensions.
4. The retained behaviors are then scaled by having SMEs rate the
effectiveness of each behavior. These ratings are usually done on a
5 to 9 point Likert-type scale.
5. Behaviors with a low standard deviation (for examples, less than
1.50) are retained while behaviors with a higher standard deviation
are discarded. This step helps to ensure SME agreement about the
rating of each behavior.
6. Finally, behaviors for each performance dimensions- all meeting
retranslation and criteria will be used as scale anchors.

CONTENTS OF PROCEDURE:

1. Identify performance criteria:

• The number of appraisal criteria for each position is from 3 – 10 criteria.

• The standards set should be clear, easily understandable and in
measurable terms
• The appraisal criteria can be changed but must be the authority for
approval and must be implemented for the relevant level before applying.
• HR department and managers/ supervisor will set up weight of each
criteria and must be approved directors.

2. Communicating performance criteria:

• HR department should inform this procedure to all level of management

and employees.
• The employees should be informed and the standards should be clearly
explained in order to help them understanding their roles and to know
what exactly is expected from them.
• Performance criteria should also be communicated to the appraisers or
the evaluators and if required.

3. Measuring performance

Prepare.

HR dept should prepare all materials, notes agreed tasks and records of
performance, achievements, incidents, reports etc – anything pertaining
to performance and achievement.

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Inform the appraisee:

• To ensure the appraisee is informed of a suitable time and place and

clarify purpose and type of appraisal.
• Give the appraisee the chance to assemble data and relevant
performance and achievement records and materials.

Review and measure

HR dept and managers / supervisors review the activities, tasks,

objectives and achievements one by one, keeping to distinct separate
items one by one.

Agree an action plan

• An overall plan should be agreed with the appraisee, which should take
account of the job responsibilities and review strengths and weaknesses.
• The plan can be staged if necessary with short, medium and long term
aspects, but importantly it must be agreed and realistic.

4. Comparing with desired criteria

• The actual performance is compared with the desired or performance

criteria.
• The result can show the actual performance being more than the
desired performance or, the actual performance being less than the
desired performance depicting a negative deviation in the organizational
performance.

5. Discussing results

The result of the appraisal should be communicated and discussed with

the employees.

• The feedback should be given with a positive attitude as this can have
an effect on the employees’ future performance.
• The purpose of the meeting should be to solve the problems faced and
motivate the employees to perform better.
• The results, the problems and the possible solutions are discussed with
the aim of problem solving and reaching consensus.

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