PERFORMANCE APPRAISAL

Definition

Performance appraisal is a systematic evaluation of individual with respect to his/her performance on the job and his/her potential for development.

Objectives

Provide basis for promotion, transfer, termination Enhancing employees effectiveness Identifying employees training and development needs Removing work alienation Developing interpersonal relationship Aiding wage administration Exercising control Improving communication

Developing A Performance Appraisal System

1. Determine overall approach to PA

What

are the objectives of PA ? What benefits are anticipated from introducing PA ?

2. Where and how should PA be introduced ?

Organisation-wide
Set

up a project team

3. Decide who is to be covered 4. Decide on whether the same approach should be adopted at each level

Set up project team Define role of HRD Decide whether to use outside consultants Define performance management process and documentation Plan implementation programme

Define performance management process and documentation

Identification of key performance areas ( KPAs ) and target setting through periodic discussions between each employee and his boss Identification of qualities required for the present and future jobs in the company Self Appraisal by the appraise Performance Analysis to identify factors that have facilitated and factors that have hindered performance

Performance Discussion and counselling to understand each other and assist each other Identification of training needs Action planning and goal setting for future Final assessment by the supervising officer for administrative purposes

1. Identification of Key Performance Areas

Key Performance Area - These are the areas within the ORGANIZATION FUNCTIONS, where an individual or group, is logically responsible / accountable for the results.

Examples of KRAs, KPAs, KPIs

KRA 1 - RECRUITMENT/ SELECTION KPA 1 - RECRUITMENT KPI 1 - Average time taken per employee 2 months KPA 2 -SELECTION [ KPI = average cost per new employee RS 10,000]

KRA 2 - WORKFORCE PLANNING/ DIVERSITY

KPA 1 ABSENTEEISM [ KPI = absent rate at 5%] KPA 2- TURNOVER [ KPI = turnover rate at 7%] KPA 3- DIVERSITY [ KPI = 3 FEMALES TO BE INDUCTED INTO MANAGEMENT CADRE

KRA 3- PERFORMANCE MANAGEMENT KPA 1 - PERFORMANCE APPRAISALS [KPI = all staff to be appraised at least once annually] KPA 2 -SUCCESSION PLANNING [ KPI = 8 POTENTAL staff to be identified and talent managed]

2. Identification of qualities required for the present and future jobs in the Company.

3. Self Appraisal by the appraise.

Self appraisal is the self evaluation where the employee himself gives the feedback or his views and points regarding his performance.

The employee himself critically analyses the performance, his strengths, weaknesses, accomplishments, problems faced, the training and development needs (if any) etc.

4. Performance Analysis

This is used to identify the factors that have facilitated and the factors that have hindered performance. The Appraise reflects about his performance and identifies factors that helped him doing whatever he has done and the factors that prevented him from doing better. He classifies these factors into a. factors within his control b. factors outside his control ( difficulties ). He then gives the analysis to supervising officer.

5. Performance Discussion and Counselling

After Performance Analysis is done the appraise should reflect about his performance and prepare notes of his assessment. Fix a time for review discussion. Appraise Perspective : To know about perceptions , expectations, assessment of his boss & also to communicate about difficulties and ask for support. To know his strength and weakness.

Appraiser perspective : Opportunity to understand his subordinate. Helps him to identify mechanisms for development and performance improvement.

6. Identification of Training and Developmental Needs.

The PA would generally lead to the identification of developmental needs. If it is lack of capabilities, development of capabilities through training , on-the-job coaching.

If there is lack of motivation, it should be dealt during counseling.

7. Final Assessment

By this stage the Appraiser would have gone through understanding of his subordinates, his accomplishments , strengths and weakness, developmental needs. The final assessment should be shown to the employee.

The session should be flexible.

All the ratings should go to Personnel Department along with the developmental needs form for administrative and other actions.

Why PA May Fail

Unclear Language Mgr not taking PA seriously Lack appraisal skills Mgr not prepared

Mgr not honest or sincere

No on-going feedback Ineffective discussion Mgr Lacks Infor.

Insuff. Rewards

Methods of Performance Appraisal

1. 2.

Traditional Methods Modern Methods

Traditional Methods

Graphical Rating Scales Raking Method Paired Comparison Method Forced Distribution Method Checklist Method Critical Incidence Essay Appraisal Group Appraisal Confidential Reports

Graphic Rating Scale

It compare s individual performa nce to absolute standard.

Parameters Attitude Job Knowledge Quality of Work Dependability Initiative Cooperative Quality of Work Coordination

Ratings

In this method, an employees quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on-the-job performance of the employees.

For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory.

Ranking Method

This is one of the oldest and simplest techniques of performance appraisal. In this method, the appraiser ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation.

Paired Comparison Method

The appraiser ranks the employees by comparing one employee with all other employees in the group, one at a time.

A B C D E

A -

B A -

C A C -

D A D C -

E A E E E -

Forced Distribution Method

To eliminate the element of bias from the raters ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. 10% - Excellent and Unsatisfactory 20% - Good and Below Average 40% - Average

Checklist Method

The rater is given a checklist of the descriptions of the behaviour of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees.

Wadia Industries Ltd., Performance Appraisal Form Name of employee : Department :

1.

Designation: Y/N

Is the employee punctual in attending the office ?

2.

Does the employee behave courteously with his supervisors ? Y/N Does the employee maintain sound customer relationship Y/N Is the employee sincere in doing job ? Does he behave well with public outside ? Y/N ? Y/N

3.

4.

5.

Critical Incident Method

In this method of performance appraisal, the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behaviour as and when they occur.

Duties

Targets

CI Mobilised Rs. 12 Rs. 7 lakhs Rs. 5

DEPOSIT MOBILISATION Rs 1o lakhs lakhs Rs.3 lakhs from business lakhs CUSTOMER SERVICE Not Mobilised Rs. 2 lakhs from individuals

Rs. 4 lakhs from Educational Institution

Prompt in disposing customers 5 mins for deposit Thrown the pass book

Essay or Free Form Appraisal

This traditional form of appraisal, also known as Free Form method involves a description of the performance of an employee by his superior.

The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator.

Group Appraisal
Done by group of appraisers.

It is done by immediate supervisor of the employee, HOD, and consultants