Performance Appraisal SYNOPSIS _ Introduction “10. | 10.2 Concept and Nature of Performance Appraisal 10.3 Objectives of Performance Appraisal "10.4 Uses or Importance of Performance Appraisal 10.5 Performance Appraisal Process (Elements) 10.6 Problems in Performance Appraisal 10.7. Essentials of an Effective Performance Appraisal System 10.8. Methods and Techniques of Performance Appraisal | 10.9 Performance Appraisal through MBO 10.10 360 Degree Appraisal Technique 10.11 Potential Appraisal 10.11 Performance Management 10.13 Employee Counselling e Summary °® Test Questions 10.1 INTRODUCTION din society. Parents evaluate Appraisal of performance is widely use aie their children, teachers evaluate their stuch" rune rtieved their employees. However, formal evaluation © employstime during the First World W; to have been adortet for the in the U:S. Army adopted the ‘Man the instance of as ing military personnel. During Man’ rate . oid W industrial units were evaluated on 1920-1930 hour y This early appraisal system was called merit sis of rating scores: ‘ @ the aaa the carly fifties, performance appraisal techniques began to be used for technical, professional and managerial personnel. Since then tremendous changes have taken place in the concept, techniques and philosophy of employee appraisal. These changes have been summarised in Table 10.1. J: Trends in Performance Appraisal Table 10. Former Emphasis Item Performance appraisal 1. Terminology Merit-rating 2. Purpose Determine wage increase, Development of the individual promotion, transfer, layoff | improved job performance 3. Application | For rank and file workers | For managerial and technical personnel Performance, results or accomp- lishments 4. Factors Rated | Personal traits 5, Techniques | Rating scales with emphasis | Mutual goal-setting, critical upon scores incidents, group appraisal 6 Post-appraisal Superior communicates | Superior stimulates employee 0 Interview rating to the subordinate | analyse himself and set down and seeks to have the employee accept the rating goals with the help and of the superior Source: Dale S. Beach: Personnel—The i A 7 —The Management of People at Work, Collier Macmillan Publishing Co., New York, 1975, p. pa " ent of People a 10.2 CONCEPT AND NATURE OF PERFORMANCE APPRAISAL cars appraisal is the process of assessing the performance and a site employee or of a group of employees on a given jo Sppratal or future development. According to Flippo, “Performane employees phe ipstna periodic and an impartial rat % & ntalin Pate in matters Pertaining, to his present job and his 4 better job.”' Performance appraisal and merit rating ee 1. Edwin B. Flippo: Personnel Management, p. 225.ously. But strictly speaki gsed synonym .. -Y Speaking, performance appraisal ; “der term than merit-rating. In merit-rating, the focus is oe ng the calibre of an employee so as to decide salary increment ‘On the other hand, performance appraisal focus d 10.5 The main characteristics of performance appraisal are as follows: (i) Pertormance appraisal is a process consistin, of a series of steps. These steps are described later. : (ii) It is the systematic examination of an employee's strengths and weaknesses in terms of the job. (iii) Performance appraisal is a scientific or objective study. Formal procedures are used in this study. The same approach is adopted for all jobholders so that the results are comparable. (iv) It is an ongoing or continuous process wherein the evaluations are arranged periodically according to a definite plan. (v) The main purpose of performance appraisal is to secure information necessary for making objective and correct decisions on employees. 10.3 OBJECTIVES OF PERFORMANCE APPRAISAL The main purposes of performance appraisal are as follows: (i) to provide feedback to employees so that they come to know where they stand and can improve their job performance; «. (ii) $0 provide a yalid database for personnel decisions concerning placement, pay, promotion, transfer, punishment, etc; (iii) to diagnose the strengths and weaknesses of individuals so as to identify further training needs; won i ivatio (iv) to:provide coaching, counselling, career planning and motiva' to subordinates; , i ‘eb’ (v) to develop positive superior-subordinate relations and thereby teduce grievances; VHuman Resoure, 10.6 * Managemen, n human resource management. 5 (vi) to facilitate research i (vii) to test the effectiveness of recruitment, selection, Placemen and induction programmes; appraisal aims at both judgmental and develg mental efforts. The first two objectives are judgmental where " remaining are developmental. By focussing attention onp erformanee performance appraisal reflects managements interest in the Dregne of employees. 10.4 USES OR IMPORTANCE OF PERFORMANCE APPRAISAL Thus, performance Performance appraisal is a significant element of the information ang control system in organisation. It can be put to several uses concerni the entire spectrum of human resource management functions. Some common applications of performance appraisal are given here: (i) Performance appraisal provides valuable information for personnel decisions such as pay increases, promotions, demotions, transfers and terminations. Thus, performance appraisal serves as the basis of suitable personnel policies. (ii) It helps to judge the effectiveness of recruitment, selection, placement and orientation systems of the organisation. (iii) Itis useful in analysing training and development needs. These needs can be assessed because performance appraisal reveals people who require further training to remove their weaknesses. It also identifies individuals with high potential who can be groomed up for higher positions. (iv) Performance appraisal can be used to improve performance through appropriate feedback and counselling to employees 7 serves as a means of telling a subordinate how one is doing am suggesting «necessary changes in knowledge, behaviour * attitudes, (v) Performance appraisal facilitates human resource planing» ae planning and succession planning. (vi) It promotes a positive work environment which con Productivity, tributes to basis When achievements are recognised and rewarded on thePe raformance Appraisal (vit) A competitive spirit is created and em of objective perf 07 jective performance measures, there i work environment. » Mere is improvement in improve thei! ployces are moti imP r performance. Systematic april ponte ‘ovides management an opportunity to Properly size up the employees. (viii) Systematic appraisal of performance helps to develop confid lence among employees. Appraisal records ete rotect charges of discrimination levelled by para eect from Employee grievances can be reduced. nion leaders. Table 10.2 shows the uses of performance appraisals Table 10.2: Uses of Performance Appraisals Performance Improvement: Performance feedback allows the employee, man: and personnel specialists to intervene with appropriat i ee performance. propriate actions to improve Compensation Adjustments: Performance evaluations help decision-makers determine who should receive pay raises. Many firms grant part or all of their a ae and bonuses bused upon merit, which is determined mostly ol performance appraisals. Placement Decisions: Promotions, past or anticipated performance. Often promotions are performance. Training and Development Needs: Poor retraining. Likewise, good performance should be developed. Career Planning and Development: Performance feedback guides career decisions about specific career paths one should investigate. Staffing Process Deficiencies: Good or bad performance implies strengths or weakness in the personnel department's staffing procedures. ani Informational inaccuracies: Poor performance may indicate errors in job _ information, human resource plans, orother partsof the Fe aoa sve ted to information system. Reliance 0” inaccurate information may inappropriate hiring, training, OF CO" ig decisions. Job Design Errors: Poor performance may designs, Appraisals help diagnose these errors: ppraisals that actually ual Erm, ity, Accurate performance 1 sions are eee ment eae ensure that internal placement dec Not discriminatory. | ced by’ External Challenges: Sometimes performDan’s india ther person Work environment, such as family, financial, health, oF transfers, and demotions are usually based on a reward for past performance may indicate the need for may indicate untapped potential that be a symptom of ill-conceived job factors outside the al matters. If10.8 Human Resource Mancgeney t uncovered through appraisals, the human resource department may be able to provide assistance. « Feedback to Human Resources: Good/bad performance throu, organisation indicates bow well the human resource function is pert Bhout the forming Source: William B. Werther and Keith Davis, op. cit., p. 339. 10.5 PERFORMANCE APPRAISAL PROCESS (ELEMENTS) The performance appraisal process follows a set pattern and it Consists of the following steps (as shown in Fig 10.1): q) (2) Establishing Performance Standards: The appraisal Process begins with the setting up of criteria to be used for appraising the performance of employees. The criteria is specified with the help of job analysis which reveals the contents of a job. This criteria should be clear, objective and in writing. It should be discussed with the supervisors to ensure that all the relevant factors have been included. Where the output can be measured the criteria is clear. If work performance cannot be measured, the personal characteristics which contribute to employee performance must be determined. These characteristics include work quality, honesty, and reliability, cooperation and team- work, job knowledge, initiative, leadership, safety consciousness, attendance, learning ability, adaptability, judgement, sense of responsibility, health and physical condition, etc. These standards should be indicated on the Appraisal Form. Appraisal forms should be carefully designed and printed. In addition, who is to do the appraisal and how frequently appraisal is to be done should also be decided. In fact, performance standards will depend upon the objectives of the appraisal, i.e., to appraise actual performance on the present job or to judge potential for higher jobs. Communicating the Standards: The performance standards specified in the first step are communicated and explained Ld the employees so that they come to know what is expected of them. The reactions of employees to the standards should be obtained. If. necessary the standards may be revised or mod in the light of feedback obtained from the employees and the evaluators.appraisal enorme ; 10.9 LY Setting Performance Standards 67% ‘ 2 Foking Corrective Actions Communicative Beandarde | , Measuring Performance wn | Figure 10.1: The Performance Appraisal Process (3) Measuring Performance: Once the performance standards are specified and accepted, the next stage is the measurement of actual performance. This requires choosing the right technique of measurement, identifying the internal and external factors influencing performance and collecting information on results achieved. Personal observations, written reports and face-to- face contacts are the means of collecting data on performance. The performance of different employees should be so measured that it is comparable. What is measured is as important as how it is measured. (4) Comparing the Actual with the Standards: Actual performance is compared with the predetermined performance standards. Such comparison will reveal the deviations which may be positive or negative. Positive deviations occur when the actual performance exceeds the standards. On the other hand, excess of standard performance over the actual performance represents negative deviation. . (5) Discussing the Appraisal: The results of the appraisal are communicated to and discussed with the employees. Along with the deviations, the reasons behind them are.also analysed and discussed. Such discussion will enable an employee to know his weaknesses and strengths. Therefore, he/she will be motivated to improve. The impression the subordinate received about Performance has an impact on the subsequent performance.10.10 Human Resource Man The impact may be positive or negative dependin 1B how ¢ appraisal feedback is presented and discussed with th he employee, (6) Taking Corrective Actions: Through mutual discussions with employees, the steps required to improve performance are identified and initiated, Training, coaching, counselling, ete are examples of corrective actions that h . elp to improve performance. 10.6 PROBLEMS IN PERFORMANCE APPRAISAL (LIMITATIONS OF PERFORMANCE APPRAISAL) The main problems involved in performance appraisal are as follows: (1) Errors in Rating: Performance appraisal may not be valid indicator of performance and potential of employees due to the following types of errors: (a) Halo Effect: It is the tendency to rate an employee consistently high or low on the basis of overall impression. One trait of the employee influences the rater’s appraisal onall other traits. For example, an employee may be rated high on performance just because he/she sits on the job late in the evening. Similarly, a person who does not shave regularly may be considered lazy at work and may be underrated. This error may be minimised by rating all the employees on one trait before taking up another trait. (6) Stereotyping: This implies forming a mental picture of a person on the basis of the age, sex, caste or religion. It results in an over-simplified view and blurs the assessment of job performance, (c) Central Tendency: It means assigning average ratings tol! the employees in order to avoid commitment % involvement. This is adopted because the rater has not '0 justify or clarify the average ratings, As a result, the ratings are clustered around the midpoint. (4) Constant Error: Some evaluators tend to be lenient whil others are strict in assessing performance. In the first - performance is overrated (leniency error) while in J second type it is underrated (strictness error). This tende™(¢) () . Incompetence: Raters may fail to eva . Negative Appr . Multiple Objectives: Raters may get co . Resistance: Trade unions may resi . Lack of Knowledge: The staff ined an ce. Appraisal 10.11 may be avoided by holdin, i understand what is required ofthen” to thet the raters Personal Biss: Performance appraisal may b. . because the rater dislikes an employee. Such bins a invalid may arise on the basis of regional or religious belief: r Prejudice or interpersonal conflicts. Bias may also be the Band habits Recent experience or first impression of the r: fer t of time. the evaluation. ater may affect Spill Over Effect: This arises when past performance affect: assessment iki performance. For instance recent behaviour or performance of an employee may be oj him. This is called recency. re Lack of Reliability: Reliability implies stability and consistency in the measurement. Lack of consistency over time and among different raters may reduce the reliability of performance appraisal. Inconsistent use of measuring standards and lack of training in appraisal techniques may also reduce reliability. Different qualities may not be given proper weightage. Factors like initiative are highly subjective and cannot be quantified. luate performance k of knowledge and experience. Post accurately due to lac appraisal interview is often handled ineffectively. ses most of its coach: Performance appraisal lo: value when the focus of management is on punishment rather than on development of employees. nfused due to too many mance appraisal. ce appraisal on g its members. dustri faith bjectives of perfo st performan the ground that it involves discrimination amon ‘m Negative ratings may affect interpersonal relations an e tu relations particularly when employees/unions don in the system of performance appraisal. appraising performance oO d experienced enough tom: objectives or unclear 0} employees might not be train correct appraisal.10.12 er Group performance Important ust be valid, reliable and practical. e appraisal system m ot just about individual work. They 7 fT ee aad jusl "sg who are stressing On group Pe! fo! e. 0! is 0 sizes and sectors. led ot a Marati Suzuki which gives 40% weig! Jay and behaviour. executives say being an outstanding perform: Compani are putting im in the performance of the organisation. eC ——— 10.7 ESSENTIALS oF AN EFFECTIVE PERFORMANCE APPRAISAL SYSTEM To be effective, a performance appraisal s following requirements: (1) Mutual Trust: ‘An atmosphere of mutual trust and confidence should be created in the organisation before introducing the appraisal system. Such an atmosphere is necessary for frank discussion of appraisal. It also helps to obtain the faith of employees in the appraisal system. Performance appraisal is an emotional process involving feelings of fairness and equal treatment. The human element in it must be considered if itis to serve the individual and organisational purposes. (2) Clear Objectives: The objectives and uses of performance appraisal should be made clear and specific. The objectives should be relevant, timely and open. The appraisal system should be fair so that it is beneficial to both the individual employee and the organisation. The system should be adequately a” appropriately linked with other subsystems of human resource management. (3) Standardistton: Well-defined performance factors and criteria sl ould be developed. These factors as well as appraisal form, press mrad techniques should be standardised. It will help ‘edeoigess shnbien and comparison of ratings. The apprai Tissot measure what they are supposed tom ld also be easy to administer and economical !0 use. ystem should satisfy thepet (4) (5) (6) (7) (8) (9) rt ance Appraisal 10.13 Employees should be made fully aw: and should be involved in setting the hub standards ‘Training: Evaluators should be giv ini techniques of appraisal. They shouldbe prove A ri br . } i and skills in documenting appraisals, vonducting po een interviews, rating errors, etc. Set sppen Job Relatedness: The evaluators should focus attention on job related behaviour and performance of employees. Multi le criteria should be used for appraisal and appraisal should be dor : periodically rather than once a year. one Documentation: The raters should be required to justify their ratings. Documentation will encourage evaluators to make conscious efforts minimising personal biases. It will also help to impart accountability for ratings. Feedback and Participation: Arrangements should be made to communicate the ratings to both the employees and the raters. The employees should actively participate in managing performance and in the ongoing process of evaluation. The superior should play the role of coach and couns purpose of appraisals should be development judgemental. The feedback message must contail with examples and suggestions for improvement. Individual Differences: While designing the appraisal system, individual differences in organisations should be recognised. Organisations differ in terms of size, nature, needs and environment. Therefore, the appraisal system should be tailor- made for the particular organisation. The needs of ratees is terms of feedback, mobility, confidence and openness sho also be considered. . an interview with the isal, Post Appraisal Interview: After app!! vo supply feedba ck, employee should be arranged. Itis se yees work and to know the difficulties under whic Nould adopt @ interview ane S to identify their training needs. problem-solving appro# e e counselling for improving performanc , eller. The overall al rather than in comments1014 ‘femur Rerures Miinapemen When star employees chum oot great results, you might be tempted ty pgp them on the back and ask them to rep doing whatever it i they're doigg. | However, your job as a manager ts to understand the behaviours thar diye. | those results and ensure they are in line with your company’s values. Here arp two ways to do that: a Give Separste Ratings for Behaviour and Results: When you combine the te you can exsy gov employers 2 ps fee Rel Behaviour wea theye producing positree catcomes Assessing separately erstires that you can pire fais behaviour ratings without obscuring the business results (10) Review and Appeal: A mechani tor review of ratings should te prowaded The review muy be made by 4 committee consisting of ine ctevetives and personnel experts The committee will toc whether the raters are unueually strict or lenient. It may cootrappate Cationgs with operating results and may require the raters to give spexitk examples of tangible proot Differences if any are discussed and dinsent i recorded. Provision must be made for an appeal is case Uke ernployee/ratee is not satisfied with the raliege. Table 10.5 shows the emential of a good appraisal system Tobe 19.) Eonemanade of Gnd Appraisal System L Kao 10 wndernad ond ademessotee 2 Oper wd particigutoe— amen emplenyers te geal setting process and provide Seeds, 3 Walid aend eeituatiee 4 Beit ee ecemine, (4, srward shoud follow satielactory performance 5 Commas + fullow-ap mechenmen for uieantying empleryer’s growth next & Pemedicaly severed and egdated Extabhained with the suppert of ail line peuple whe adeninestes the #6610.8 ral methods and techniques are used fo rformance- They may be classified into, shown in Figu mance Appraisal 10.15 METHODS AND TECHNIQUES OF PERFORMANCE APPRAISAL T evaluating employee re 10.2. ‘wo broad categories as Performance Appraisal a tional Methods [iim [Modem Methods] v — fidential Report : Panne pay LL, Assessment Centre : Fo ‘ ght Ranking 12. Human Resource Accounting ‘ eral Comparison 13. Behaviourally Anchored + fae Rating Scales 5, Forced Distribution 14. Appraisal through MBO 6 Graphic Rating Scales 15, 360 Degree Appraisal 7, Checklist Method 8. Critical Incidents 9, Group Appraisal 10. Field Review Figure 10.2: Methods or Techniques of Performance Appraisal (1) Confidential Report: This is a traditional form of appraisal used (2) in most government organisations. A confidential report is a report prepared by the employee's immediate superior. It covers the strengths and weaknesses, main achievements and failure, personality and behaviour of the employee. It is descriptive appraisal used for promotions anc transfers of employees. But it involves a lot of subjectivity because appraisal is based on impressions rather than on data. No feedback is provided to the employee being appraised and, therefore, its credibility is very low. The method focusses on evaluating rather than developing the employee. The employee who is appraised never knows his weaknesses and the opportunities available for overcoming them. Free Form or Essay Method: writes a short essay on the employee’ p' of overall impression. The description is and concrete as possible. An essay can Under this method, the evaluator erformance on the basis expected to beas factual provide a good deal of10.16 (3) (4) Human Resource Man, agem rent information about the employee especially if the evaluator j, asked to give examples of each one of his judgements, But thi method suffers from several drawbacks. First, it involves bias evaluation is not based on specific performance dimension, related to the job. Secondly, the quality of appraisal depends a the writing ability of the evaluator rather than on emplo . formance. Thirdly, it is a very time consuming method of hly, it is not possible to compare two essay heir length and contents. Y per appraisal. Fourt appraisals due to variations in t Straight Ranking Method: In this technique, the evaluator assigns relative ranks to all the employees in the same work unit doing the same job. Employees are ranked from the best to the poorest on the basis of overall performance. For instance, if five persons A, B, C, D and E are to be ranked, the ranking may be as follows: Employee Rank A 2 B 1 Cc 5 D 4 E 3 Straight ranking is one of the oldest and simplest methods. It is time saving and a comparative evaluation technique of appraisal. But there are several weaknesses in this method. First, it involves bias and snap judgement because appraisal is not based on specifically defined measures of job-related performance. Secondly, ranking of individuals having varying behaviour patterns or traits is difficult especially when a large number of persons are to be rated. Thirdly, the method only indicates how a person stands in relation to others in the group but does not tell how much better or worse he is than another. Paired Comparisons Method: Thisis a modified form ofstie™ ranking. Herein, each employee is compared with all the others in pairs one at a time. The number of times an employee judged better than the other determines his rank. Com iance Appraisal 10.17 js made on the basis of overall performance. TI . The number of comparisons to be made can i following formula: be decided on the basis of the Nov = 2 where N is the number of perso: ms to b i is illustrated as follows: ne compared This waihicd A B c D 7 ame A - = _ ; ; ; B + - _ ; . ; Cc + + _ ¥ . ' D - 7 _ _ . ‘ * - 7 = = a 5 Herein, plus (+) sign implies the employee is considered better and minus (-) sign means worse than the other employee in the pair. C gets the highest number of plus signs, therefore, his rank is the highest and so on. Jer than the ranking Paired comparison method iseasier and simp method. But it is subjective because appraisal is not based on specific job related performance. Secondly, it becomes very cumbersome when the number of employees tobe rated islarge. 5 ibuti od: In this technique, the rater is 8 ee oy distrib ar the form of a normal required to distribute his ratings in a frequency distribution as shown in Figure 10.3. The purpose 1s to eliminate the rater’s bias of central ranking technique is used. This ™! eats ee a wre paired co} parisons. But inthis volved in s! method employees ar¢ place 1 ranked within @ category The questionable assumption an Peformance ie10.18 (6 Human Resource iy, 7 ratings, The rater may resent the Testriction Placeg on th freedom of choice. fe No. of Employees Poor Poor Average Good Excellent Figure 10.3: Forced Distribution Curve Graphic Rating Scales: It is a numerical scale indicating di degrees of a particular trait. The rater is given a printed each employee to be rated. The form contains several relating to the personality and performance of employees, Intelligence, quality of work, leadership skills, judgement, et are some of these characteristics, The rater records his j on the employee’ trait on the scale. The numerical Points given to an employee are added up to find out his overall performance and standing in the group. Rating scales are of two types, viz, continuous and discontinuous. In continuous scale, the degrees of a trait are measured in numbers Tanging from 0 to 5 whereas ina discrete or discontinuous scale appropriate boxes or squares are used. Figure 10.4 contains Tating scales. form for Poor Average — Good Excellent Quantity of Work 0 1 Quality of Work Sor Job Knowledge | —.-——]7 —_—_—_, Dependability > > 1 Abie CT 7 — 4 Continuous Rating Scale Avinae [ ie CC] Cc] Cc Nolmterest Indifferent Interested Enthusiastic Very Entbwissie Discrete or Discontinuous Rating Scale Figure 10.4: Rating Scalespedjoone® Appraisal 10.19 ‘The rating scale method is widely used as it is easy to understand and use. It allows a statistical tabulation of scores and a ad comparison of scores among the employees is possible. It i economical to design and administer rating scales, ‘The al 10 h is multi-dimensional as several significant dimensions of the jov can be considered in evaluation. But the rating is general arbitrary and subjective because specific job related verformance criteria are not considered. Secondly, it is assumed that each trait is equally important for all jobs. Thirdly, the descriptive words used in rating scales, ie., dependable’ may have different meanings to different raters. There is an implication that high rating on one factor can compensate for low score on other factor. Fourthly, the method imposes a heavy burden on the rater, He has to evaluate performance on several factors each having five degrees. In practice, ratings tend to cluster on the high side. A supervisor often tends to rate his subordinates high to avoid criticism from them. To minimise this bias, the rater may be asked to give reasons to justify his rating. (7) Checklist Method: A checklist isa list of statements that describe the characteristics and performance of employees on the job. The rater checks to indicate if the behaviour of an employee is positive or negative to each statement. The performance of an employee is rated on the basis of number of positive checks. There are three types of checklists that can be used : (i) Simple checklist (Table 10.4) wherein equal importance is given to each statement, (ii) Weighted checklist (Table 10.5) in which weights are assigned to different statements to indicate their relative importance, and (iii) Forced choice checklist (Table 10.6) wherein five statements are given for each trait, two most descriptive statements, two least descriptive statements and one neutral statement, The rater is required to check one statement each from the most descriptive and least descriptive ones. The aim is to minimise the rater’s personal bias. Table 10.4: Simple Checklist ; Is the employee regular on the job? Te “ ‘ Is the employee respected by his subordinates? Yes ” ‘ 1s the employee always willing to help his peers? te No Does the employee follow instructions properly? .. ine es 5. ; Does the employee keep the equipment in order?10.20 lL oF eR __Regularityonthejob Maat eT ar | Human Re luman Resource My / Table 10.5 : Forced Choice Block aay Always regular v Informs in advance for absence/delay v Never regular Remains absent Neither regular nor irregular Table 10.6: Weighted Checklist Traits Weights Performance Ratings (Scale I to 5) Attendance 05 Knowledge of the job 10 Quantity of work 10 Quality of work 15 Dependability 15 Interpersonal relations 20 Organisational loyalty 15 Leadership potential 15 (8) Checklist method is a descriptive technique and it provides concrete examples of evaluation, But it is a time-consuming and expensive method as a different checklist must be developed for each job category, Secondly, it is difficult to assemble, analyse and weight several statements that properly describe job related behaviour and performance. The statements maybe interpreted differently by different raters. The rater may not know which statement contributes most to successful performance. Trained raters are required, Critical Incidents Method: In this method, the supervisor keeps* written record of critical events and how different employees behaved during such events, The rating of an employee on his positive/negative behaviours during these events. he critical incidents are identified after thorough study of the job discussion with the staff, For example, a fire, a sudden breakin of machinery, a serious accident, etc. may be identified a anaz > (9) sce Aperaisal 10.21 incidents for the working of a factory. Table 10.7 i behaviour of five workers during machine ice the Table 10.7 : Critical Incident Score Reaction Informed the supervisor immediately w Became anxious of loss of output Tried to repair the machine vw oe Complained of poor maintenance ‘Was happy to get forced rest 1 Critical incidents method helps to avoid vague impressions and eneral remarks as the rating is based on actual records of pehaviour/performance. The feedback from actual events can be discussed with the employee to allow improvements. The rater can fully defend his ratings on the basis of his record. But this method suffers from several problems. First, it is very time consuming and cumbersome for the superior to maintain a ch employee during every major event. Secondly, quoting incidents after considerable time lapse may evoke negative emotions from employees. Thirdly, subjective judgement of supervisor is involved in deciding critical incidents and ‘desirable’ response to an event. Fourthly, the supervisor may commit errors in recording behaviours of different employees during a short duration event. Fifthly, critical incidents occur infrequently and therefore, 4 continuous record of performance might not be available. Lastly, the employees are likely to become concerned with what he supervisor recor rather than with daily job routine. Group Appraisal Method: Under ¢ . h evaluators assesses employees. This grouP consists : t e immediate supervisor of the employee. other supervisors ans dose contact with the employees work, head of the depart and a personnel expert. The group determines performance for the job» measures formanc! employee, analyses the causes of poor pe suggestions for improvements in future. The ae * oh method is that it is simple ye thorough. written record for ea his method, 4 group of10.22 (10) Field Review Method: In this method, a training office « The errors involved in traditi in performance appraisal, + Herbert E. and John ; Jan.-Feb,, 1965, Human Resource yy, 2nagemen " evaluators personal bias is minimised. But it js a very time consuming process. + . T from the human resource department interviews line SUPErvisors to evaluate their respective subordinates. The interviewe, prepares in advance the questions to be asked. By answerin these questions a supervisor gives his opinions about the leve} of performance of his subordinate, the subordinate’s work progress, his strengths and weaknesses, promotion Potential, etc. The evaluator takes detailed notes of the answer which are then approved by the concerned supervisor, These are then placed in the employee's personal service file. This system relieves the supervisor of the need for filling in appraisal forms. The supervisor's personal bias is reduced due to the active involvement of the human resource officer. The ratings are usually classified into three categories, i.e, outstanding, satisfactory and unsatisfactory. This is, however, a time-consuming method. The success of this method depends upon the competence and sincerity of the interviewer. The traditional methods given here all focus more on the traits of an | employee than on his job performance. In the absence of predecided | performance criteria or standards, the personal bias or subjectivity of the | evaluator affects the ratings.' | One study? of appraisal in General Electric Co., USA revealed that the traditional approach to performance appraisal caused the following responses: | (i) The very nature of the appraisal system led to criticism. (ii) Criticism exercised a negative impact on goal attainment. | | (iii) Criticism increased antagonism and defensiveness among employees resulting in inferior performance. (iv) Praise had little effect one way or the other. | The traditional systems of appraisal are based on judgement role of de supervisor, if ms jonal systems have been described under the heading’ pro “Split Roles in Performance Appraisal” Harvard Business Rev?yon In order to overcome these weaknesses, same new techniques of performance appraisal have been developed. ‘The modern techniques are described here: 1) Assessment Centre Method: An assessment centre isa group ot ewployees drawn from different work units. These employees work together on an assignment similar to the one they would be handling when promoted. Evaluators observe and rank the performance ofall the participants. Experienced managers with proven ability serve as evaluators. This group evaluates all employees both individually and collectively by using simulation techniques like role playing, business games and in basket exercises. Employees are evaluated on job-related characteristics considered important for job success, The evaluators observe and evaluate employees as they perform jobs. Assessments are : done generally to determine employee potential for promotion. / The evaluators prepare a summary report and feedback is administered on a face-to-face basis to the employees who ask for it. Table10.8 shows the ten common errorsin designing and usingassessment centres. Table 10.8 : Ten Common Errors in Designing and Using Assessment Centr Explanation/Example Insufficient support from top management or potential assessors, underestimating the time and effort required to develop and use the centre, unresourcing, no agreement on how to use the results. 1. Poor Planning 2 Inadequate Job Analysis Assessment centre activities and procedures must be closely linked to job demandsto be content valid and legally defensible ; Weakly Defined Dimensions Dimensions to be rated by assessors (e.g. oral communication skill, prioritiuation) must be clearly defined and closely related to the job analyus 4 Por Ere Exercises should be job related and allow the demonstration of sills on the Gimenons to be rated Clear and consistent mstrachons and standards tor admunastering exercises mast be developed and wed every time the centre is rat.10.24 5, No Pretest Evaluations 6. Unqualified Assessors 7. Inadequate Assessor Training 8, Inadequate Candidate Preparation 9. Sloppy Behaviour Documentation 10. Misuse of Results Hiner Resour Prior to use, exercises and be tried out and findtmea Proced ey sey Assessors sus be one to tWo | assesses and should th evel, being assessed, sme cnet Assessors must be trained toy dimensions to be rated, to neersang the behaviour properly, and to prepa 22d reports. * ty Candidates should be thoroughly b,: assessment centre procedure ie " participation. aed Assessors must document candidate carefully and objectively rather than ifr an overall opinion of the candidate, Centre results should be used only for tg previously stated purpose (e.g. selection or development). Assessment centre results shoud be combined with information from othe selection devices to make the most accursz decisions about candidates. Source: C. Caldwell, G.D. Thornton III, and M.L. Gruys, “Ten Classic Assessment Cam Errors : Challenges to Selection Validity,” Public Personnel Managemen, Vit = 2003, pp. 73-88. An assessment centre generally measures interpersonal sis communicating ability, ability to plan and organise, etc. Peon interviews and projective tests are used to assess work monies. career-orientation and dependence on others. Pape! al tests are used to measure intellectual capacity. Assessment centres are not only a method ofappasli to determine training and development needs of empl is? provide data for human resource planning. This cai used to select students for entry level positions. al evil! get an equal opportunity to prove their merit. They - pit by a team of trained assessors under similar condit™ yo! personal bias is reduced, But this is a time COM it expensive method, Further the candidates whores report from the assessment centre may feel demo te ve? to make this method effective, it is necessary ' wce Appraisal 10.25 performan clearly, to obtain top management support, to conduct job analysis, to train the assessors, and to periodically evaluate and revise the assessment programme (Fig. 10.5). Develop Policies for Feeding Back Data _l Design Physical in Top Manage- nt Commitment Facilities _¥_ FED: Detailed sob | | [Select Exercises and Analysis Participants x ine Dimensions to be Assessed Figure 10.5: An Assessment Centre Model Assessment centres are used for the following purposes : (i) To measure potential for first level supervision, sales and upper management positions; and also for higher levels of management for development purposes; (ji) To determine individual training and development needs of employees; (iii) To select recent college students for entry level positions; (iv) To provide more accurate human resource planning information; (v) To make an early determination of potential; Tab, (vi) To assist in implementing affirmative action goals. © 10.9 gives a summary of assessment centre programme activities.a 10.26 Source: W.C. Borman, ‘Validity of Behavioural Assessment for Predicting (13) ls Structured Interview: Assessors aka series of questions targe cd level of achievement motivation, potential for bein, atthe . Cold Calls: Subject has an opportunity to learn alittle ab |. Interviews: Two of the three cold-call prospects agree to come in for. Human Resource ‘Table 10.9: Summary of Assessment Centre Programme 00 * be Ba ellstan commitment to the army. 2 Out three must phone each of them for the purpose of getting them tp a tad office. Assessor role players have well-defined characters (promecny tt the The subject's job is to follow up on what was learned in the cold-call Minteriey and to begin promoting Army enlistment to these People. A third ‘ik prospect also appears for an interview with the subject. 2 ._ Interview with Concerned Parent: Subject is asked to Prepare for and, interview with the father of one of the prospects he or she interviewed previ 7 . S-minute Speech about the Army: Subject prepares a short talk about an Amy career that he or she delivers to the rest of the group and to the assessor In-basket: Subject is given an in-basket filled with notes, Phone messages ind letters on which he or she must take some action. Military Recruit: Performance,’ Journal of Applied Psychology, 67, No. 1 (1982), pp. 3-9. (12) Human Resource Accounting Method: Human resources a valuable asset of any organisation. This asset can be valuedia terms of money. When competent, and well-trained employees leave # Organisation the human asset is decreased and vice verse. Unie this method, performance is judged in terms of costs a contributions of employees. Costs of human resoures ot of expenditure on human resource planning, recruit selection, induction, training, compensation, etc. Conttiv® of human resources is the money value of labour prod a or value added by human resources. Difference bewe® and contribution will reflect the performance of em?!” Behaviourally Anchored Rating Scales (BARS): This oe combines graphic rating scales with critical inciden's™ ig BARS are descriptions of various degrees of behavion af” ‘0 specific performance dimensions. Critical 2% gi Performance and the most effective behaviour for sent are determined in advance, The rater records if job behaviour of 8 an ares ese 0 io ith B Int employee and comp’ a pels his way, an employee's actual jojrmal judg constructing (a) (b) (c) (a) Always shows under- oe. Appraisal 10.27 ed against the desired behaviou i BARS are as follows ; es tneieeye Sawai in Identify Critical Incidents. Persons wi : . ith job to be appraised (job hcra/tuperton deat " = examples of both effective and ineffective job behaviour ie Select Performance Dimensions: The persons then ch io the behavioural incidents into a smaller set ( voually five to of performance dimensions. iweto e Incidents: Another group of knowledgeable h incident to the dimension that it best for which there is less than 75 per cent first group are not retranslated. Assign Scales to Incidents: The second group rates each incident on a seven or nine point scale. Rating is done on the basis of how well the behaviour described in the incident represents performance on the appropriate dimensions. Means (averages) and standard deviations are then for the scale values assigned to each incident. In incidents that have standard deviations of 1.5 or less (ona seven point scale) are indluded in the final anchored scales (Fig. 10.6). could be expected to explain to patient that the nurse is supposed to roll up the bed and show ten) Retranslate th persons assign eac describes. Incidents agreement with the standing, sensitivity, SUP- port, courtesy, tact and co- operation in interaction with others. Usually shows under- standing, sensitivity, sup- Port, courtesy, tact and co- operation in interaction with others. Eko shows under- ontins sensitivity, sup- opener tact and co- Peration in interaction With others, Figure 10.6: Be Source ; ¢: Hammer, W.C. & Schmidt, K.F (E4s.) patient how to call the nurse. could be expected to remain calm and polite when confronted by an abrupt visitor offering assistance to help with the problem. could be expected t0 feel for ‘weaker’ subordinates occasionally and trade her easy t more difficult ones. could be expected t staff dealings could be expected 1 co-worker OF supervisor could be expected to b problems and not to help othe! ct could be expe spetystomers 19 become frustrat ec concerned with ownHuman Resource M 10.28 enero Final Instrument: A subset of the incide (e) De the retraslation and standard deviation cy tha i used as a behavioural anchor for the final perform, - dimensions. A final BARS instrument typi cally comm a series of vertical scales (one scale per dimension) ri endorsed by the included incidents. Each in heen cident ig positioned on the scale according to its mean value, BARS method has several advantages. First, the ratings are likely to be accurate because these are done by experts. Secondly the method is more reliable and valid as it is job specific and identifies observable and measurable behaviour. Thirdly, Fatings are | to be more acceptable due to employee participation, Fourthly the method provides a basis for setting developmental Goals for employees as it differentiates between behaviour, performance and results. Lastly, the use of critical incidents is useful in providing feedback to the employee being rated. BARS method, however, suffers from weaknesses, First, it isvery time-consuming and expensive to develop BARS for every job. Second, behaviours used are more activity-oriented than results- oriented. Several appraisal forms are required to accommodate different types of jobs in an organisation. Despite its intuitive appeal, this method is not necessarily superior to the traditional methods of appraisal. 10.9 PERFORMANCE APPRAISAL THROUGH MBO (GOAL SETTING APPROACH) The concept of management by objectives (MBO) was developed by Peter Drucker in 1954. He called it ‘management by objectives and control. Since then MBO has became an effective and operation ined i performance appraisal and a powerful philosore ‘aging. Itis also know: i i sett Approach tp nas Work Planning and Review or God!performance Appraisal "In other words, MBO embers” In » MBO Involves i wes clear, time bound and mutually agreed ot a Performance themain steps involved in Performa; Io challenging yet (2) Defining Performance ‘Targets: On the goals, performance standards for each Every subordinate writes down his own are work-related and career-oriented, The manager also writes down the goals he/she thinks the subordinate should strive for. The two then discuss them, reach an agreement and put the agreed goals in writing. Thus, employees at all levels are actively involved in goal-setting. Clear attainable goals help channel energies in the right direction and let the employee know the basis on which he will be judged. The goals are periodically reviewed and revised to keep them up-to-date. basis of organisational employee are defined. Performance goals which The level of performance considered smth iw achieve the Boal is defined. Measure checkpoints are establist ed ome Progress towards the goals. Action plans mai Sdn amin the goals are also decided through mutual con a aitacton an employee and his superior. Joint pel set tooush MBO. Planning are essential elements of apprais isal through MBO. Tle 10,10 depicts the unique features of appraisal through MBO Table 10,10: Unique Features of Appraise! jectives = : Hanns als eo . _ " i) Clee re me oweit organ! e. oo p. 55-56. sectives, 1969 "George §, Odiorne Management by Objectives “ 7 isational goals an10,30 2. Evaluation Process (a) Periodic reviews of performance rather than onk Human Resource Ma a 7 () Goals/targets determined before the Appraisal per; begins. lod (d) Checkpoints set up to measure progress, (¢) Focuson results to be achieved rather than omactvities 'Y Yearly review. Yearly (b) Focus of review on performance or results achieved rather than on personal traits, 3. Role of Employee (a) An employee active participant in goal setting ang performance appraisal processes rather than @ passive observer. (6) Plays a key role in all job related decisions, 4.Nature of Control (a) Focus on future rather than on past or Present. (b) Appraisal interview has a problem-solving approach, (0) Frequent feedback for self-control. 5.Role of Evaluator (a) Serves as a coach and counseller. (3) (4) (b) Supportive rather than judgemental role. (0) Seeks development of an employee rather than finding faults. Performance Reviews: Frequent performance review meetings between the manager and the subordinate are held. Initially, monthly reviews may be used and then extended to quarterly reviews. In the review meetings, progress is assessed, weaknesses and constraints are identified and steps to be taken to improve performance are decided. Subordinates actively participate in this process. This leads to self-control by the employee. Feedback: After every performance review, feedback on performance is communicated to the employee so that he can regulate and improve upon his own performance. On the basis of performance review rewards are decided. New goals and performance targets are determined for the next period. 10.9.1 Advantages of Goal Setting Approach (MBO) MBO is superior to other methods of performance appraisal. It offers the following benefits : (1) Ends-means Chain: MBO makes goals more explicit and focus attention on key result areas. Targets set at every level a1 integrated with those at the next higher level. This helps toens™* that activity of every person is ultimately contributing towar organizational goals.Appraisal 10.31 pole Clarity: By providing clear targets of performance, MBO helps to avoid role ambiguity and role conflict, Every individual understands his area of work and the role one has to play in the o rganisation. Responsibility for results is clearly defined and there is no misunderstanding as to performance goals. Objective Appraisal: The targets developed in MBO provide an objective . criteria for evaluating performance. An employee knows in advance the results expected and the basis on which performance will be judged. Frequent performance review sessions help to identify problems early and more clearly. After identifying deficiencies in performance, individual self- improvement programmes can be undertaken. Judgemental role of the superior is avoided and subordinates are provided the opportunity for self-appraisal. @) QB (4) Motivation and Commitment: Active Participation of subordinates in goal-setting and performance reviews helps to satisfy ego and self-actualisation needs. Close linkage between overall goals and individual goals leads to integration of individual with the organisation. Job satisfaction and morale of employees tend to be higher. (5) Management Development: Continuous feedback and opportunities for self-control help to develop the leadership potential of lower level executives. Support and counsel of the superiors also foster career development. MBO is a problem- solving rather than a tell and sell approach. (6) Coordination: Harmony between objectives at different levels Provides a sense of common direction to all. Frequent interactions between the subordinates and superiors help to reduce internal conflicts which arise when managers compete for scarce resources. It becomes easier to initiate and implement Organisational change. 109.2 Limitations of MBO Appraisal MBo Suffers from the following drawbacks : My Difficulty in Goal Setting: It is often difficult to set truly verifiable 8oals for all jobs. Moreover, in the urge to specify goals in Measurable terms, managers may ignore important qualitative10.32 (2) (3) (4) (5) Human Resource My nag femen, goals. Short-term immediate goals may oyer- Tide long.te, goals. Blue-collar workers are often unable to se t their job poate Boals Problem of Participation: Traditional hierarchical structures. authoritative attitudes do not allow active Participatio and subordinates in goal-setting. In practice, leadership style of in of managers may not be compatible with participative goal-s, any Participation may lead to a ‘tug of war’ wherein the subordinate tries to set lower targets whereas the superior insists on higher targets. Lack of Understanding: MBO often fails due to lack of knowl about the philosophy and process of MBO. Unknowlegeable persons overstress the structure rather than the Philosophy. Lack of top management support and hasty implementation also cause failure. Failure to carefully monitor the system is also a problem, Time-consuming and Expensive: MBO programme involves considerable time, energy and expenditure. It is difficult to administer because continuous interaction between superior and the subordinate is required. A manager may become so engrossed in performing assigned activities that he/she looses sight of the goal. This is called ‘the activity trap’ Inflexibility: MBO can be self-defeating if it fails to take into consideration the deeper emotions of people. Rating of every individual on the basis of specific targets may make it difficult to compare the ratings. MBO is no doubt superior to traditional methods of performance evaluation. But its successful use requires several precautions. Fist, the support and commitment of top management is essential Secondly, training is required in interpersonal relations, participative decision-making, and other aspects. Thirdly, good job descriptions must be prepared for different jobs to goal-setting by subordinates. Fourthly, superiors must have in subordinates to establish reasonable goals. Fifthly, the tee must be on solving-problems rather than on criticising performance. Sixthly, the organisation structure and style must be compatible with participative manag ement. | Seventhly, regular feedback must be provided to permit "| improvement._— . Appreisal - 10.33 onditions are more likely to be satisfied at hi r T i , goal setting approach to appraisal is morenta o 1, technical and supervisory personnel than for bee peter These © pherefore, anageria collar workers. 360 DEGREE APPRAISAL TECHNIQUE 10- i onde make appraisal more objective, transparent and participative macepts such as self-appraisal, peer appraisal, subordinate appraisal ct y customers (both internal and external) were and appraisal by ; uced. These led ultimately to thé introduction of 360° feedback ste in the United States. , em involves evaluation of a manager by everyone above, alongside and below. Structured questionnaires are used to collect responses about manager from his bosses, peers and subordinates. Several parameters relating t performance and behaviour are used in the questionnaires. Fach manager is assessed by a minimum of fifteen colleagues, at least two of them being his bosses, four of them peers, and six of them subordinates. The responses are presented collectively to the assesees in the form of charts and graphs. Comments and interpretations are presented later. Counselling sessions are arranged to solve the weaknesses identified in the 360 degree assessment. Several corporations like General Electric, Reliance Industries, Crompton Greaves, Godrej Soaps, Wipro, Infosys, Thermax, ete. are making use of this technique. Table 10.11 shows the advantages and disadvantages of 360 degree appraisal. 1; Evaluation of 360 Degree Appraisal Disadvantages Table 10.1 Advantages 1. Greater self-awareness of the top man- 1. The system may be utilised to agers reveals streng ths and weaknesses humiliate people. in their managing styles. Hleagi 2 The gap between self assessment and the | 2 Responsé frome —_ : Views of one's colleagues is redu be biased. i in . When peer group assessment is included | 3. Linking rewards to findings © 4 teamwork thrives. prove to be unfair. f o Pet about organisatoinal culture and | 4. Ignores performance in terms ; iance are brought to light. " gous th of Empower Ss eee ath ssees may deny the truth © rment is facilitated. 5. Asse negative feedback. 6 Infexi exible managers are forced to initiate Self-change10.34 Human Resource Mang semen The 360 degree assessment programme is effective when used from the top down. The fact that the manager at the top has also been administered the test convinces everyone and they are willing to go through it as well. Steps Involved in 360° Appraisal Toul ‘Top management communicates the goals of and need for 360° appraisa} Employees and managers are involved in the development of the appraisal criteria and appraisal process. 3. Employees are trained in how to give and receive feedback. Employees are informed of the nature of the 360° appraisal instrument and process. The 360° system undergoes pilot testing in one Part of the organisation, 6 Management continuously reinforces the goals of the 360° appraisal and is ready to change the process when necessary. nN > w Source: Milliman |, etal, “Companies Evaluate Employees from All Perspectives” Personnel Journal, November 1994, pp. 99-103. As depicted in the Figure 10.7, the employee is at the core of this system and on the 4 corners are the different entities that play important role in the employee's work namely his/her superior, subordinate(s) and the peers both from within the department as well as from other departments in the organisation. Thus, the 360 degree appraisal has four integral components :! Figure 10.7 : Four Integral Components of 360 Degree Appraisal (i) Self-appraisal. (ii) Superior’s Appraisal. ——____ 1. Pradeep Kumar : “The 360-Degree Appraisal” The Hindustan Times, December 22, 1998:nce Appraisal 10.35 " gubordinates Appraisal. “ peer Appraisal. (iv +i Jook at each one of them in detail. Now steer raisal: Self-appraisal is a very important part of the 360 () degree appraisal because it gives the employee absolute freedom to objectively look at his/ her strengths and areas of development along with an opportunity toassess the performance. Surprisin: ay enough, in a well-established system employees use the self- appraisal very effectively and organisations also find that employees often are their own strongest critiques and display very high degree of objectivity. Self-appraisal also provides the opportunity to the employee to express his/her career moves for the future. (2) Superior’s Appraisal: This undoubtedly continues to be the heavy-weight component of the appraisal system. In the 360 degree appraisal system, the focus is to provide constructive feedback on employee's performance in the review period. Another very significant element of the superior’s appraisal is to put career aspirations of the employee in proper perspective. On the one hand, superior must communicate to the employee in clear way what the organisation plans for the employee. On the other hand, if the employee has entirely unrealistic aspirations then also it is superior’s responsibility to share with the employee the realistic picture of his/her strengths, development areas, experience, qualifications and the Organisation's ability to provide growth. Subordinate’s Appraisal: The subordinate appraisal plays a very ‘Mportant role in the 360-degree appraisal system. First of all, it 'Sa very clear expression from the organisation that it encourages SPenness and that feedback is a two-way process. Secondly, it is systemic Tecognition of the fact that an employee’ subordinates ws Play 4 vital role in his own performance. The purpose of peetdinates appraisal is to get first hand assessment of how of fa ordinates perceive their superior to be in terms of style Ctioning, etc. It is, however, very critical to design the (3)1036 Human Resource Managemen subordinate-appraisal or upward-appraisal as it is sometimes called, in a proper way. (4) Peer Appraisal: Another distinctive feature of the 360 degree appraisal is the peer appraisal. It is significant because peers Play a critical role in the life of any employee in the organisation, First thing about peer appraisal is to select the right peers for Betting the appraisal done. They must include peers both from within the department as well as from the other departments which are directly connected with the working of employee's department. The concept of internal customers comes handy here. 3-5 internal customers should normally be chosen for peer appraisal. Peer appraisal must strive to get the feedback on employee's working style and may include ability to appreciate other peoples view, Thus, these four components complete the 360 degrees, each one representing 90 degrees of the overall appraisal. 360 degree appraisal is a logical and systematic way of looking at appraisals in the current context, A word of caution, however, is that because it is a fad at the moment and others are talking about it, should not be the only reason for your organisation to go for the 360 degree appraisal. The factors to keep in mind before attem pting to introduce 360 degree appraisal may include the level of maturity in your Organisation, history of appraisal, current stage of appraisal, organisational climate and culture, top management's commitment to openness and willingness to receive feedback and clarity about the usages of the inputs received from the 360 degree appraisal. So, be patient and spend more time on assessing your organisation’ readiness to accept this new system. Table 14.12 shows the various Performance Dimensions. Table 14.12: Performance Dimensions Performance Dimensions. Subordinates Peers Supervisors, Customer! Administrative Leadership ° “vy Communication v v Inter-personal v v v Decision-making v v Technical Y v Yce Appraisal 10.37 motivation v v Y mn orientation Y 0 ve of 90 Dare Fedak by Waker W Tome ome massing HE Value of 360 Degree Feedback by Walter W. To . Tomow, et. al., Jossey soit cs, London. gare a serious t business affecting the he yealthy hi career vo ey So whatever is put on maid a Cat ich Mietatite r inputs have to be fair and objective and re al lings 2d pectin. not based on s have become one of the most popular HR Interventions. so eee appro ‘behind the process is that it provides employees the opportunity to i not only in India but also across the world. Anemployee’s i comes to depend on others judgem ents and these ot ; : Pete same work asthe individual in question ee ee te i aka ee e dangerous situation two things ca ppen : appraisals may. (Cather eel bm hea ee ee guts of the one being Source: The Hindustan Times, April 5, 2005. Tuble 10.13 shows the advantages and disadvantages appraisal tools. Table 10.13: Advantages and Disadvantages © a "Advantages oe ae hating, (i) Simple to uses (ji) Provides # (0) Standards ™#Y be fe ch unclear (ii) Halo effect. of the various quantitative rating for ¢4' employee. central tenden' , leniency: bias a be the main d problems: Al - erates (i) Simple to uses (ji) Avoids Ratings may still not b e central tendency and other precise. problems of rating scales. ore de uaranne 3 tion Monee Results in more precise Method than does alternative ranking.10.38 4. Forced Results in predetermined number Distribution of people in each group. Method - ty 5. Critical Incident (i) Helps specify what is ‘right’ and Method ‘wrong’ about the employee's performance; (ii) Forces managers to evaluate subordinates on an ongoing basis. 6. BARS (i) Participation of employees in developing the BARS leads to more accurate gauge; (ii) The critical incidents help ‘anchor’ and clarify the scale. 7. MBO Tied to jointly agreed upon performance objectives. es 10.11 POTENTIAL APPRAISAL Potential appraising is different from assessing performance, Potential refers to the abilities present but not currently utilised. It is the tent capacity to discharge higher responsibilities in future Toles. On the other hand, performance implies the extent to which the requirements of the presently held job are being met by the employee. The potential of employees can be judged by : (i) Reviewing present performance, (ii) Analysing Personality traits, (iii) Relooking at past experience. (iv) Considering age and qualifications. (v) Explaining unused knowledge and skills of an employee. 1, Drive to excel, 3. Enterprising Spirit. 4. Dynamic sensors, Four X Factors. of High Potentials 2. Catalytic learning capability.10.40 whom the employees had close i 2x2 Human Resowce ‘Mana; ‘Bement interactions does the final gradi + ” an matrix (Fig. 10.8) is used to show the combination ‘ 9 performance and potentia ue (1) (2) (3) (4) High| Problem Children Paes | “| Planned Solid Citizens I Low Low ¢— Performance —» High Figure 10.8: Performance and Potential Low Potential-Low Performance: Employees rated low on both performance and potential are treated as question marks, are advised to improve their performance. Failure to improve performance may lead to planned separation. High Potential-Low Performance: Employees with high potential but low performance are considered problem children. They are shifted to other jobs to enable them to improve their performance. In case they fail to improve their performance, they are categorised as question marks. Low Potential-High Performance: Employees with low potential but high performance.are called solid citizens. They are encouraged to do better in their present jobs. High Potential-High Performance: Employees who score high on both potential and performance are called stars. They are assisted to make rapid progress in their careers. Companies often judge potential on the basis of past performance. But what makes someone successful in a particular role today might not tomorrow due to changes in company’s strategy or in the competitive environment. Performance is an objective parametet but potential is not. High potentials are expected to have basic oy traits like the ability to learn, to work in a team and to thinkstrateg}@")-ce Appraisal 2 PERFORMANCE MANAGEMENT 10.41 10.1 formance management is the integration of Meri with broader human resource systems as 2 means of aligning 5 joyees’ work behaviours with the Organisation's goals, Performance we agement should be an ongoing, interactive Process designed to nance employee capability and facilitate Productivity. The ~ formance management cycle is illustrated in Fig. 10.9, Performance appraisal Fig. 10.9: Performance. Management Cyde Source: Cynthia D. Fisher, op. cit., p. 421. There is no one way to manage performance. Whatever system is adopted needs to be congruent with the culture and principles that Pervade the organisation. However, most systems of performance Management have several parts: (1) Defining Performance: It is desirable to carefully define Performance so that it supports the organisation’ strategic goals. Setting clear goals for individual employees is 4 critical component of performance management. (2) Appraisal Process: It is important to conceptualise an appraisal Process that will be steady across the organisation and ed with the culture of the organisation. There are many Maine *PPraising employee performance, and the system adopted has '0 be one that will work in the context of the particular ©rganisation involved.10.42 Human Resource Managemen, (3) Measuring Performance: Measuring performance does not need to be narrowly conceived but can bring together multiple types of performance measured in various wayS- The key is to measure often and use the information for midcourse corrections. (4) Feedback and Coaching: To improve performance, employees need information (feedback) about their performance, along with guidance in reaching the next goal. 3 EMPLOYEE COUNSELLING ss in which a counsellor provides help d guidance. There are many occasions in work situations when @ worker feels the need for guidance and counselling. The term ‘counselling’ refers to the help given by a superior to his subordinate in improving the Jatter’s performance. It isa process of helping the employees to achieve better adjustment with his work ically mature individual, and help environment to behave as derstanding with others so that dealings with in achieving a better un them can be effective and purposeful. Thus, the basic objective of counselling is overall development of the employee. According to Keith Davis, Employee counselling involves a discussion of an emotional problem with an employee with the general objective of decreasing it. Features of Employee Counselling (i) Counselling is a two way communication process between the superior (counsellor) and subordinate (counsellee). (ii) Counselling deals with close interaction between the two where the counsellor listens to all the emotional challenges or problems that counsellee is undergoing in the organization. 10.1 Counselling is a two-way proce to the workers by way of advice an (iii) ‘The effectiveness of counselling depends upon how much faith and trust does the employee (counsellee) have in counsellor (man ager/supervisor). The counsellor has to be very good in reading the emotions and tactfully handling them. For this, the manager may have to be put on skill training by the organization. successful counsellor is a successful communicator who can read the employee's emotions.suance pprausal ) The general aim of counselling is to h 1043 sroblems of the employees and establish ra the emotional him at the first instance. Gradually, the lose relationship with his feelings and seek help from the soma will unlock has not sought any help from the sounail or. If the employee no use. Counselling is effective only when ine counselling is of the advice from counsellor on his emotion r counsellee wants counsellor is willing to offer it. al disorders and the {iv ‘The counsellor offers assistance in makii his/her potential fully and inculcates a mutation environment better, personal and inter-personal relati work better for improving performance. ionships v 40,13.1 Types of Employee Counselling order to be successful, counsellors use various skills and techniques J , increase people’s awareness of problems and to decide on appropriate ions. Some of the most effective methods counsellors use to achieve se purposes are as follows: (1) Non-Directive Counselling: Non-directive or client-centred counselling is the process of skilfully listening and encouraging a counsellee to explain bothersome emotional problems, understand them and determine the course of action. The central point in such type of counselling is the counsellee and not the counsellor. This technique is mostly used by professional counsellors but managers can also practice it in thei: organisation. The role of a counsellor is simply to listen to the person and try to understand the feeling and encourage [0 discover and follow improved course of action. The counsellor should not reassure or suggest faction rather a the feelings without any judgm should also avoi blame or praise oF doubts during otherwise the role o! i possible that the person and the very purpose of si un counselor throughou interview shou and und stand discerning questions, restate ideas, C?" flui why these feelings exist- There exists 410.44 (2) (3) Human Resource Managemen 7 relationship between the counsellor and counsellee that requ; minute attention to every detail in the overall situation shires Directive Counselling: As the name suggests, direct counselling is a process directing the employees to solve oe emotional problems through advice, reassurance communicati on and release of tension. The counsellor deals with the emotional problem of the employee patiently, then decides with the employee what to do and then motivates the employee to do it The counsellor takes an active part in discussing every aspect of the problem and help in devising the solution and suggest the ways to get it. It is assumed that the counsellors superior to counsellee and knows what to do. Co-operative Counselling: Employers make limited use of non- directive counselling because it requires professional counsellors and is costly. On the other hand, directive counselling is often not accepted by modern, independent and democratic employees. This is why organisations use counselling which falls between the two extremes of directive and non-directive counselling. This moderate, or middle-of-the-road approach, is called ‘co-operative counselling. Itis called ‘co-operative’ because it uses the co-operative efforts of both the counsellor and the counsellee. It is neither entirely counsellor-centred nor counsellee-centred, but requires that both of them come forward with their varied knowledge, perspectives and insights to resolve the counsellee’s problems in a work-together setting. Co-operative counselling is neither counsellor centered nor counsellee centered but rather both counsellor and co mutually co-operate to apply their different knowledge perspectives and values to the problem. Keith Davis fines operative counselling as “a mutual discussion of an oe emotional problem and co-operative effort to set up com that will remedy it” 4 Co-operative counselling starts with the listening techinidr . non-directive counselling but as the interview pro roe th counsellor plays a much more important and positive intl he/she plays in non-directive technique. The counsellor ioye® the discussion and discusses the problem with the ¢ Pfrom the broader pete ofthe organisat 10.45 ; ous perspectives bef , Sation yarious persp lore the employ thisthrowing . Hi Ces for co pa Co-operative counsel ling applies four fu ison, net} je. reassurance, Communication, re] Tons of counsel clarified thinking. It has no room for advice Of tension aa needed, the counsellor refers the em ‘ies If Teorientation is counsellor. If direct action is regret te '0 a professional action but he does so in his capacity as ennase takes the not as a counsellor. rect superior and Se ee 2 io oc yee SUMMARY }, Performance appraisal is the process of assessin i performance of a person on the present job and his one ri Gartahe the jobs in future. It serves several purposes. igher level Performance appraisal provides an objective basis for taking personnel decisions. . Establishing performance standards, communicating standards, measuring performance, comparing it with the standard, discussion and corrective actions are the steps in performance appraisal. 4 Halo effect, stereotyping, central tendency, constant error, personal bias, spillover effect, inconsistency, incompetence, negative approach, multiple objectives, and resistance are the main problems in appraisal. Mutual trust, clear cut objectives, standardisation, training, job relatedness, documentation, feedback, participation, individual differences, post-appraisa interview, review and appeal are the essentials of a sound appraisal system. ‘ay pei i ed Confidential report, free form, straight ranking, paired oT vl distribution, graphic rating scales, checklist, critical incidents gov? FP l. and field review are the traditional techniques of performance @PI a Assessment centre, human resource accounting, behaviourally scales and MBO are the modern techniques. The 360 degree appraisal involves appraisal of an employee subordinates and peers. Appraisal of potential is important. It con Perf . skills. Performance, experience, and un anti al problem with a Employee counselling involves 4 discussion of it employee with the general objective of decreasing * There are three types of counselling in industty” ive counselling and co-operative a by self, superior be based on personality traits, pastEmotional Black Male