Appraising Performance (Chapter $) 5 Lk LENE al PATI 5.2.1. Meaning of Potential Appraisal Potential appraisal is a crucial fur Appraising human potential in a scientific and « way for enhanced corporate performance. P capacities and qualities in a person which manifests wry i the job. Potential refers to the abilities present but not curenty sue A new system of developing employees for occupying higher positions in an organisation is called potential appraisal, r 191 ystematic manner paves ‘otential represents latent Potential appraisal refers to the appraisal i.e. identification of the hidden talents and skills of a person. The person might or might not be aware of them. It is a future-oriented appraisal whose main objective is to identify and evaluate the potential of the employees. The time for a potential appraisal is not fixed. It is under the discretion of the manager to hold the assessment activity. Many organisations consider and use potential appraisal as a part of the performance appraisal processes. In organisations that subscribe to HRD, the potential (career enhancement possibilities) of every employee is assessed periodically. Such assessment is used for developmental planning as well as for placement. It is assumed under this system that the company is growing continuously. 5.2.2. Process of Good Potential Appraisal Steps required to be followed while introducing a potential appraisal system are shown in figure 5.2. 1) Role Descriptions: Organisational roles and functions must be defined clearly. To this end, job descriptions must be prepared for each job. Qualities Needed to Perform Roles 2) Qualities Needed to Perform Boles: Bese ono desertion, the roles to. be played by people Figure 5.2: Process of Good must be prepared (i.e., technical, Potential Appraisal managerial jobs and behavioural dimensions).193 192 (Unit MBA Second Semester (HRM) MDU ‘Appraising Performance (Chapter 5) 3) Rating Mechanisms: Besides listing the functions and qualities, the 5.2.3. Techniques of Potential Appraisal 3 potential appraisal system must list mechanisms of judging Potential appraisal helps to identify what can happen in future so that it qualities of employees such as: can be guided and directed towards the achievement of individual and i) Rating by Others: The potential of a candidate organisational growth and goals. The techniques of potential appraisal by the immediate supervisor who is acquail candidate's work in the past, especially his could be ratec ted with the grea flows ene 1) Self-Appraisal: In this appraisal employee himself gives the feedback or his views and points regarding his performance. Usually this is done with the help of a self-appraisal form where the employee rates himself on various parameters, tells about his capabilities ii) Teste: Managerial and behavioural dimensions can be measured rough a battery of psychological tests. mpl i s 5 through a battery of psychologi fecesanat eel training needs, if any, talks about his accomplishments, strengths, ises weaknesses, problems faced, etc. Self-appraisals are beneficial when ‘managers seek to increase employees’ involvement in the review Sames: Simulation games and exertis ces gamer, betes etc.) could be used t0 business games, in-basket, role play. uncover the potential of @ candidate. iv Is: Performance records and of a candidate on his : ee ee nod be examined “carefully on various 2) Peer Appralsal: This appraisal provides information that Timension’ such as initiative, creativity, risk taking ability, ete» some degree from ratings by a superior, since peers often see Which might play # key role in discharging his duties in a new different dimensions of performance. Peers can readily identify job. : leadership el skills alongwith other strengths and ; weaknesses of their co-workers. One advantage of isals is 4) Organising the System: After covering the above preliminaries, oe the belief that they furnish more accurate and Walid information than [HR manager must set up a system that will allow the introduction © sppralala braieeiom the scheme smoothly incorporating answers to some complex super 3) Manager/Supervisor Appraisal: This appraisal has traditi af i traditi #"Frow much weightage to accord to merit in place of seniority in been the method of evatuating-a subordinate’s performance, In mary Pane ;. __imsiances they are in the best position to perform this function, il) How much weightage to accord to each of the performance j although it may not always be possible for them to do so. Reviews dimensions ~technical, managerial, behavioural qualities? j guperiors generally are more objective and provide a broader ; ; - tive of employ iii) What are the mechanisms of assessing the individual on | romaine employee performance than do appraisals by i different indicators of his potential, and with what degree of Process. fers to questions such as: reliability? 5) Feedback: The system must provide an opportunity for every : employee to know the results of his assessment. He should be gages ‘set their goals to helped to understand the qualities actually required for performing eons es eee for measurement. of their performance and the role for which he thinks he hes the potential, the mechanisms names fo Mand deciding the course of action to be followed. Other used by the organisations to appraise his potential and the resufts of eet for, ee include appraisal by results, target coaching, work such an appraisal. A good potential appraisal system must also oa ing ae review, performance objective setting, and mutual logical testing is a field characterised continuously provide opportunities for the employees to know his strengths and weaknesses. These are done through periodic Ipmeftg (eral eaadiesco| by i fcr the Iporsceanell opertaurt’or (ial eee Tests: Psycholog managers concerned. This should enable the employee todevelop construct( ‘samples of behaviour in order to assess Psychological realistic self-perceptions and plan his own career and development. eae ee Tea eee and emotional functioning, about a 2 ical term for the science behi ind94 Unit) : MBA Second Semester (HRM) MDU psychological testing is psychometrcs. Psychometric testis also known as psycho-miotor skill/ability test. Iisa devise that is used nut about individual efferences i. personal characteristics, underlying actions, possible furure behaviour, how good" you are at . fusure behaviour, how ‘good’ you something compared with other groups of people, 6) Management Games: Simulations tha nt act fitvations are Known a5 busines or mangement gues, These simulations attempt to duplicate selected factors in a specific situation, which are then manipulated by the participants. Business games involve two or more hypothetical organisations competing in a given product market. The participants are assigned such roles as Managing Director, General Manager, Marketing Manager, etc. They make decisions affecting price levels, production volume and inventory levels. The results of their decisions are manipulated by a computer programme, with the results simulating those of an actual business situation. Participants are able to see how their decisions affect the other groups and vice versa. These games help in appraisal of employee’s performance. 7) Leadership Exercises: The vital aspects of a leader include being ‘able to identify the individual strengths of oneself and others, using these strengths for the good of the group, appreciating the dynamics Of the group and knowing the proper times to iead and when. 19 Stow someone else to take the reins. Leadership exercises provide ’n opportunity to enhance these abilities. There are various leadership exercises like: % i) Stand by Your Quote: This exercise i used to create Teadership awareness and discussion. Hang variows leadership quotes up on the wall. Ensure that the print © large and that eee are large spaces between each quote. Each quote should focus on different leadership aspects. i flow each ii) Leadership Race: The leadership rate helps to all 2 person to realise what leadership traits they have and, more rportantly, what they.need to work on- ‘Accurately appraising the leadership skills of acyone Ace hip role is critical, so choosing the Te cass of te swell. Tat for the success of the COMPANY ea cratcise helps in appraisal of employees, ‘Therefore, potential should be included as ® ‘appraisal in organisations. Appr 5.2.4. Advanta: ” 2.4. es of i is Pete apr i well st Fotenial Appraisal © functions, such as human resource planni rae ane planning, promotionfiermination decisions and employes aioe nod development However itis mainly wed for. > Ssimine sod 1g Pertormance (Chapter 8) 1) Employee Development: Potential appraisal is a powerfu employee development. Whether managers reatiac Wort they soe accustomed to making potential assessments. Every time s manager recommends or fails to recommend an employee for a promotio: potential assessment has, in fact, been made. a 2) Assessment of Individuals: Potential apprai Assessment : Potential appraisal helps to assess Indiv i ems ofthe highest evel of wok the inva wl able to handle comfortably and successful re wi being over-stretched ene i 3) Providing Assistance to Organisation: Potential appraisal provides assistance to the organisation in discharging its responsibility of selecting and developing managers for the future to ensure its continuous growth. 5.2.5. Disadvantages of Potential Appraisal ©) Disadvantages of potential appraisal are as follows: 1) Future-Oriented: Potential is about the future while performance deals with the past. Good jn the past in a given job need not be a good indicator of the likely performance in funure in a ‘role that the individual has not performed. 2) Biasness of Boss: Biasness of the boss who is just one level above may creep into potential appraisal. 3) Competencies Related: Potential is related to competencies while performance related to KPAs (Key Performance Areas) and other Tasks assigned to the individual. Potential is about assessing people against competencies required for higher level roles. 44) Requires Support: Performance on a given job is partly depend Gur the support provided by the organisation including his Reporting Officer and Reviewing Officer and their judgment may be more reflective of the situation in which the performer has rather than his actual capabilities.196 (Unit-IIl) MBA Second Semester (HRM) MDU 5.2.6. Difference between Potential Appraisal & Performance Appraisal Performance Appraisal | Performance is the resultant behaviour of the subordinate on the task which can be observed or evaluated. Performance is related to key performance areas and other tasks assigned to the individual. Potential Appraisal 1) Potential refers to employees’ abilities to fit into future role. 2) Potential is about assessing people against competencies required for higher level roles. _ 3) Biases of the boss who is just one level above may creep into potential appraisal. Performance Appraisal is free from biasness. 4) In potential appraisal job profile of the employee is modified. The existing job profile is appraised. 5) Potential appraisal is a future- Performance appraisal includes both past and future-oriented appraisal.