Performance Appraisal


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Performance Appraisal

  1. 1. ::Performance Appraisals:: Presented By: Priyanka Balwa MBA-III-B
  2. 2. Performance Appraisal <ul><li>The systematic , periodic and an impartial rating of an employee’s excellence in the matters pertaining to::- </li></ul><ul><ul><ul><li>His present job </li></ul></ul></ul><ul><ul><ul><li>His potential for a better job </li></ul></ul></ul>
  3. 3. :::Objectives Of Performance appraisal::: <ul><li>Estimate gap between the actual and the desired performance. </li></ul><ul><li>Exercising organizational control. </li></ul><ul><li>Feedback to the employees regarding their past performance. </li></ul>
  4. 4. <ul><li>Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. </li></ul><ul><li>To judge the effectiveness of the other HR functions such as recruitment, selection, training and development. </li></ul><ul><li>To reduce the grievances of the employees. </li></ul>
  5. 5. ::Appraisals Assist:: <ul><li>Employee Training Needs Assessment </li></ul><ul><li>Organizational Performance </li></ul><ul><li>Succession Planning </li></ul><ul><li>TQM </li></ul><ul><li>Change organizational Culture </li></ul>
  6. 6. Process Establishing Standards Communicating Standards and expectations Measuring the actual performance Comparing with standards Providing feedback Corrective Actions
  7. 7. Pre-requisites for Performance Appraisal <ul><li>Documentation --continuous noting and documenting the performance </li></ul><ul><li>Standards / Goals --should be clear, easy to understand, achievable, motivating, time bound and measurable </li></ul><ul><li>Practical and simple format - The appraisal format should be simple, clear, fair and objective. </li></ul>
  8. 8. <ul><li>Evaluation technique – An appropriate evaluation technique should be selected </li></ul><ul><li>Communication –E xpected results should be communicated to the employees as well as the evaluators </li></ul><ul><li>Feedback – S hould be developmental rather than judgmental </li></ul><ul><li>Personal Bias --evaluators should be trained to carry out appraisals without personal bias </li></ul>
  9. 10. Purpose Of Performance Appraisal (A Survey of 100 Companies)
  10. 11. <ul><li>Payroll and compensation decisions – 80% </li></ul><ul><li>Training and development needs – 71% </li></ul><ul><li>Identifying the gaps in desired and actual performance– 76% </li></ul><ul><li>Deciding future goals and course of action – 42% </li></ul><ul><li>Promotions, demotions and transfers – 49% </li></ul><ul><li>Other purposes – 6% (job analysis and providing superior support, assistance and counseling) </li></ul>
  11. 12. Performance Appraisals as Career Development <ul><li>“ Get paid according to what you contribute” </li></ul><ul><li>Performance appraisal as Career Development leads to the recognition of the work done by the employees </li></ul><ul><li>It is a link between the organizational goals and the employees’ personal career goals. </li></ul><ul><li>Potential appraisal, a part of Performance appraisal , helps to identify the hidden talents and potential of the individuals </li></ul>
  12. 13. <ul><li>A positive feedback motivates employees to identify individual career developmental plans </li></ul><ul><li>Based on the evaluation, employees can develop :: </li></ul><ul><ul><ul><li>Their career goals </li></ul></ul></ul><ul><ul><ul><li>Achieve new levels of competencies </li></ul></ul></ul><ul><ul><ul><li>Chart their career progression </li></ul></ul></ul><ul><li>Performance appraisal encourages employees to reinforce their strengths and overcome their weaknesses.   </li></ul>
  13. 14. ::Approaches to Performance Appraisals:: <ul><li>Traditional approach </li></ul><ul><li>Traditionally, P.A. has been used as just a method for determining and justifying the salaries of the employees </li></ul><ul><li>Than it began to be used a tool for determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past performance of the employees </li></ul>
  14. 15. Traditional Approach… <ul><li>A past oriented approach </li></ul><ul><li>Focused only on the past performance of the employees </li></ul><ul><li>Did not consider the developmental aspects of the employee performance </li></ul>
  15. 16. Modern approach <ul><li>Performance appraisal processes are more formal and structured. </li></ul><ul><li>Apart from the routine HR Functions, Modern approach to performance appraisals includes a feedback process </li></ul><ul><li>This improves the communication between superior-subordinates The modern approach to is a future oriented approach and is developmental in nature . This recognizes employees as individuals and focuses on their development.   </li></ul>
  16. 17. Balanced Scorecard <ul><li>The balanced scorecard provides a list of measures that balance the organizations internal and process measures with results, achievements and financial measures. </li></ul><ul><li>The two basic features of the balanced scorecard are: </li></ul><ul><ul><ul><li>A balanced set of measures based on. the four perspectives of balanced scorecard </li></ul></ul></ul><ul><ul><ul><li>Linking the measures to Employee Performance </li></ul></ul></ul>
  17. 18. The 4 key areas:: <ul><li>The financial measures – </li></ul><ul><ul><ul><li>P rofits, </li></ul></ul></ul><ul><ul><ul><li>increase in the market share, </li></ul></ul></ul><ul><ul><ul><li>return on investments and </li></ul></ul></ul><ul><ul><ul><li>other economic measures as a result of the actions taken. </li></ul></ul></ul><ul><li>The customers’ measures – </li></ul><ul><ul><ul><li>customer satisfaction, </li></ul></ul></ul><ul><ul><ul><li>the customer’s perspective about the organisation, </li></ul></ul></ul><ul><ul><ul><li>customer loyalty, </li></ul></ul></ul><ul><ul><ul><li>acquiring new customers. </li></ul></ul></ul><ul><ul><ul><li>Number of customer complaints, </li></ul></ul></ul><ul><ul><ul><li>The time taken to deliver the products and services, </li></ul></ul></ul><ul><ul><ul><li>improvement in quality etc. </li></ul></ul></ul>
  18. 19. <ul><li>The internal business measures – These are the measures related to the organization’s internal processes which help to achieve the customer satisfaction . </li></ul><ul><ul><ul><li>Infrastructure, </li></ul></ul></ul><ul><ul><ul><li>The long term and short term goals and objectives, </li></ul></ul></ul><ul><ul><ul><li>Organizational processes and procedures, </li></ul></ul></ul><ul><ul><ul><li>Systems and the human resources. </li></ul></ul></ul><ul><li>The innovation and learning perspective – </li></ul><ul><ul><ul><li>organization's ability to learn, </li></ul></ul></ul><ul><ul><ul><li>Innovations and improvements </li></ul></ul></ul><ul><ul><ul><li>Key competencies </li></ul></ul></ul><ul><ul><ul><li>Value added and the revenue per employee. </li></ul></ul></ul>
  19. 20. Methods of Performance appraisals <ul><li>Traditional Methods </li></ul><ul><ul><ul><li>ESSAY APPRAISAL METHOD </li></ul></ul></ul><ul><ul><ul><li>STRAIGHT RANKING METHOD </li></ul></ul></ul><ul><ul><ul><li>PAIRED COMPARISON </li></ul></ul></ul><ul><ul><ul><li>CRITICAL INCIDENTS METHODS </li></ul></ul></ul><ul><ul><ul><li>FIELD REVIEW </li></ul></ul></ul><ul><ul><ul><li>CHECKLIST METHOD </li></ul></ul></ul><ul><ul><ul><li>GRAPHIC RATING SCALE </li></ul></ul></ul><ul><ul><ul><li>FORCED DISTRIBUTION </li></ul></ul></ul>
  20. 22. <ul><li>Modern Methods </li></ul><ul><ul><li>Assessment Center </li></ul></ul><ul><ul><li>Human Resource Accounting </li></ul></ul><ul><ul><li>Behaviorally Anchored Rating Scales </li></ul></ul><ul><ul><li>MBO </li></ul></ul><ul><ul><li>360 Degree Appraisals </li></ul></ul>
  21. 23. Appraisal as Employee Motivation Mechanism <ul><li>Inaccurate Performance Review + Increased Salary = De-motivated Employee </li></ul><ul><li>Accurate Review + No Change in Salary = De-motivated Employee </li></ul><ul><li>Accurate Review + Increased Salary = Highly Motivated Employee </li></ul>
  22. 24. Arguments Against Performance Appraisal <ul><li>Disparities between the theory and its application </li></ul><ul><li>PA is a bitter process for most of the employees </li></ul><ul><li>Creates emotional pressures and stress for the employees </li></ul><ul><li>PA is often looked upon as a tool to control the employees by the superiors which dampen the intrinsic motivation of the employees. </li></ul><ul><li>PA process increases the dependency of the employees on their superiors </li></ul>
  23. 25. Performance appraisal … <ul><li>… . process encourages accountability, approvals and discourages the spirit of creativity and initiative by employees and also Demotivates them </li></ul><ul><li>… are conducted by managers who are often not trained to be appraisers. </li></ul><ul><li>… .This obstructs the genuine feedback , leading to incorrect and unreliable data regarding the performance of the employees </li></ul><ul><li>Example:: BPOs’, Government Organizations Etc </li></ul>
  24. 26. MANAGING WITHOUT PERFORMANCE APPRAISALS <ul><li>The &quot;appraisals and review meetings&quot; , continuous accountability and check can cause emotional stress for the employees. Therefore, it is recommended to create such a work culture where </li></ul><ul><ul><ul><li>the employees are made responsible for their own performance and development </li></ul></ul></ul><ul><ul><ul><li>the manager’s / superior’s suggestions, inputs are encouraged and incorporated in the actions. </li></ul></ul></ul>
  25. 27. <ul><li>Changing pay practices--P eriodic cost of living increases, rewards on some accomplishments, tem bonuses, profit and gain sharing </li></ul><ul><li>Motivating people—Challenging work, Reminding them about their personal goals </li></ul><ul><li>Creating an organization with a culture that </li></ul><ul><ul><ul><li>Encourages creativity, </li></ul></ul></ul><ul><ul><ul><li>Fosters innovative efforts and productivity, </li></ul></ul></ul><ul><ul><ul><li>Teamwork, </li></ul></ul></ul><ul><ul><ul><li>Reformulating strategic plans and assumptions but can be effectively put into place without the need of performance appraisals </li></ul></ul></ul>
  26. 28. Performance Appraisal For Employees at Different Levels <ul><li>For top level management </li></ul><ul><li>Degree of organizational growth and expansion </li></ul><ul><li>Extent of achievement of organizational goals </li></ul><ul><li>Contribution towards the society </li></ul><ul><li>Profitability and return on capital employed </li></ul>
  27. 29. <ul><li>For middle level managers </li></ul><ul><li>Performance of the departments or teams </li></ul><ul><li>Co-ordination with other departments </li></ul><ul><li>Optimal use of resources </li></ul><ul><li>Costs Vs. revenues for a given period of time </li></ul><ul><li>The communication with superiors and subordinates </li></ul>
  28. 30. <ul><li>For front line supervisors </li></ul><ul><li>Quantity of actual output against the targets </li></ul><ul><li>Quality of output against the targets </li></ul><ul><li>Number of accidents in a given period </li></ul><ul><li>Rate of employee absenteeism </li></ul>
  29. 31. Global Trends In Performance Appraisal Program <ul><li>The focus of the performance appraisals is turning towards career development </li></ul><ul><li>Trend towards a 360-degree feedback system </li></ul><ul><li>The problems in the performance appraisal processes are being anticipated and efforts are being made to overcome them. </li></ul><ul><li>Rank and Yank Strategy or “Up or Out Strategy </li></ul><ul><li>Team Performance Appraisal </li></ul>
  30. 32. Points to be Remembered <ul><li>What is the purpose of performance appraisals? </li></ul><ul><li>How should the self appraisal be used? </li></ul><ul><li>How should the ratings be given if there has been a change of supervisor or manager during the period of the appraisal? </li></ul><ul><li>How can input/feedback be collected for the appraisal process? </li></ul><ul><li>What if the employee refuses to agree or/and accept the review? </li></ul><ul><li>How do you deal with an average or a non-performer? </li></ul>
  31. 33. <ul><li>:::Don't let employees come into the Performance Appraisal blindly or leave blindly, without a sense of direction or accomplishment!::: </li></ul>
  32. 34. :::Thankyou:::