Current Trends in Performance Appraisal

Elimination of ratings as rating seems to distract all efforts of organizational improvement. Identification of constraints and eradicating them. Create internal performance consultants whose duty is to define performance standards and analyse performance. Self-review provides an opportunity to every employee to comment on his / her perceptions and views on achievement of targets. Performance Appraisal continues to be a subject of interest and importance to Human Resource specialists. In 1976 Taylor and Zawacki published an article on Performance Appraisal, which makes a shift from collaborative approach (Management By Objective & Behaviourally Anchored Rating Scale) towards the more traditional performance appraisal techniques (graphic rating scale, paired comparison, ranking, checklist etc). Through 1980, researchers continued to document performance appraisal practices. Bernardin & Klatt, in 1985 noted that small firms tended to rely heavily on trait-based approaches while larger firms relied on a combination of trait, behavioural and result-based techniques. They noted that one in five organizations did not give employees the opportunity to review the performance appraisal results. Thomas & Bretz, in 1994 reported that performance information is most likely to be used for employees development or to administer merit pay. Other common administrative uses include promotions, lay-offs, transfer, termination etc. Hall, Posner and Hardener, in 1998 identified common objectives of performance appraisal as reviewing past performance, rewarding past performance, goal setting for future performance and employee development.

Current trends in Performance Appraisal

Day-to-day feedback and bi-monthly feedback sessions. Manager as a coach instead of appraiser. Performance management as a function of training & development. 1

Recent trends in Performance appraisal

The common methods of performance appraisal today are:

1) 90o Appraisal: The employee evaluates himself and shows his strengths and achievements or his boss evaluates him. (Self or Boss) 2) 180o Appraisal: The employee and the boss evaluate his performance on a monthly basis. (Self and Boss) 3) 270o Appraisal: The method wherein the employee is evaluated by 3 persons, himself, boss and co-workers. 4) 360o Appraisal: Also known as multi-rater feedback, where feedback about employees performance comes from a Supervisor/superior, co-worker, client/customer, subordinates and the self-assessment of the employee himself) 5) 720 Appraisal: As the name itself suggests, in this method, the 360o appraisal method is practiced twice. First the 360o appraisal is done, where the performance of the employee is analysed and having a good feedback mechanism, the boss sits down with the employee again a second time and gives him feedback and tips on achieving the set targets.

Recent trends in Performance appraisal

6) Rank & Yank strategy: Also known as in or out policy the rank and yank strategy refers to the performance appraisal model in which the employees are first ranked from Best to Worst and these rankings are used to identify and separate poor performers from the good performers. Then the action plans for improvement of the poor performers are discussed and they are given a certain time to improve their performance, after which the appropriate HR decisions are taken. Some of the prominent corporations which follow this strategy are Ford, Microsoft and Sun Microsystems. 7) Balance score card: It is a tool to measure the performance of the employees which was developed by Robert Kaplan and David Norton. It not only measures the performance of employees but also includes: a) Financial Perspective: Includes measures such as operating income, return on capital employed etc. b) Customer perspective: Includes measures such as customer satisfaction, customer retention, etc. c) Business process perspective: Includes measures like cost incurred on the employee, quality of output etc. d) Learning & growth perspective: Includes parameters such as employee satisfaction, employee retention, skills, etc. There is a logical connection between learning and growth arising in a better business process, which in turn leads to an increased value to the customer and eventually in improved financial performance of the organisation.

Recent trends in Performance appraisal