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  1. 1. –1
  3. 3. Human Resource ManagementPerformance ManagementPerformance Managementand Appraisaland Appraisal
  5. 5. Performance Appraisal Performance Appraisal Performance Appraisal (PA) – The process of evaluating how well employees perform their jobs when compared to a set of standards, and then communicating the information to employees. – Performance Appraisal is essential to understand & improve the employee’s performance through HRD. – Performance appraisal indicates the level of desired performance level, level of actual performance & the gap b/w the two 11–5
  6. 6.  Performance appraisal may be understood as the assessment of an individual’s performance in a systematic way. The performance being measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, cooperation, Judgment, versatility, health etc.. 11–6
  7. 7.  It is the systematic evaluation of the individual with respect to his/her performance on the job and his/her potential for development” Assessment is generally not confined to past performance alone . Potentials of the employee for future performance must also be assessed. 11–7
  8. 8. Meaning Of Performance appraisal Meaning Of Performance appraisal Performance appraisal is method of evaluating the behaviors of employees in the workplace. It includes both qualitative & quantitative techniques or aspects of job performance. Performance refers to the degree of accomplishment of the tasks that make up an individual’s job. It indicates how well an individual is fulfilling the job demands. Performance is always measured in terms of results & not efforts. 11–8
  9. 9. Definition Definition Performance appraisal is the systematic, periodic & an impartial rating of an employee’s excellence in matters pertaining to his present job and his potential for a better job - Edwin Flippo 11–9
  10. 10. Definition Definition “Performance Appraisal is a formal, structured system of measuring and evaluating job related behaviour and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more affectively in the future so that the employee, organization and society all benefits” -Randall S Schuller 11–10
  11. 11.  This definition states behaviour is also a part of the assessment .Behaviour can be active or passive – do something or do nothing. Either way behaviour affects job results, employee assessment is as old as the concept of management. Performance appraisal is linked to job analysis as shown in the fig below. 11–11
  12. 12. NEED FOR PA NEED FOR PAProvide information about performance ranks.Provide feedback information about the level ofachievement & behaviour of the subordinate,Provide information which helps to counsel thesubordinate.Provide information to diagnose deficiency in theemployee regarding skill, knowledge & needs.To prevent grievances & in disciplinary activities. 11–12
  13. 13. Features Features PA is a systematic process consisting of a number of steps to be followed for evaluating and employees strengths and weaknesses It is a systematic & objective description of an employee’s strengths & weaknesses in terms of the job. PA seeks to secure information necessary for making objective & correct decisions on employees 11–13
  14. 14. PA is ongoing & continuous process where theevaluations are arranged periodically accordingto a definite plan.PA is not job evaluation.It refers to how well an employee is doing theassigned job.Job evaluation determines how much a job isworth to the organization & what is the range ofpay should be assigned to the job.Establish plan of improvement.Appraisals are arranged periodically according tothe definite plan. 11–14
  15. 15. PURPOSES OF PA PURPOSES OF PATo create & maintain satisfactory level of performance.To contribute to employee growth & development.To help the superiors to have a proper understanding about the subordinates.To guide the job changes with a help to continuous ranking.To facilitate fair & equitable compensation based on performance.To provide information for making decisions regarding layoff retrenchment etc . 11–15
  16. 16. Objectives of performance Objectives of performance appraisal appraisal Data relating to performance assessment of employees are recorded, stored and used for several purposes.They are listed below: To effect promotions based on competence & performance To confirm the services of probationary employees after the completion of probationary period. To assess the training & development needs of employees 11–16
  17. 17.  To decide on pay rise unorganized sector) To let the employees know where they stand & to guide them for their development. To improve communication between a superior & subordinate & to set goals. To ask HR programmes such as selection training & transfer are effective or not 11–17
  18. 18. OBJECTIVES OBJECTIVES Work-Related Objectives Career Development Objectives Communications Organizational Objectives 11–18
  19. 19. Work-Related Objectives: Work-Related Objectives: To assess the work of employees in relation to job requirements To improve the efficiency To help management in fixing employees according to their capacity, interest, aptitude and qualifications To carry out job evaluation 11–19
  20. 20. Career Development Objectives Career Development Objectives To assess the strong & weak points in the working of the employees and finding remedies for weak points through training To determine career potential To plan promotions, transfers, lay offs etc. of the employees To plan career goals 11–20
  21. 21. Communication Communication To provide feedback to employees so that they come to know where they stand ad can improve their job performance To clearly establish goals To provide coaching, counseling, career planning & motivation to employees To develop positive superior-subordinates relations & thereby reduce grievances 11–21
  22. 22. Organizational Objectives Organizational Objectives To serve as a basis for promotion or demotion To serve as a basis for wage & salary administration & considering pay increases & increments To serve as a basis for planning suitable training & development programmes To serve as a basis for transfer or termination in case of reduction in staff strength. 11–22
  23. 23. Identifying and Measuring Identifying and Measuring Employee Performance Employee Performance Performance Management System – Processes used to identify, encourage, measure, evaluate, improve, and reward employee performance. Performance – What an employee does and does not do. • Quantity of output • Quality of output • Timeliness of output • Presence at work • Cooperativeness Job Criteria – Important elements in a given job 11–23
  24. 24. Types of Performance Information Types of Performance Information Trait-based Trait-based Information Information Job Job Behavior-based Behavior-basedPerformance?Performance? Information Information Results-based Results-based Information Information 11–24
  25. 25. Potential Performance Criteria ProblemsPotential Performance Criteria Problems Deficiency Deficiency Contamination Contamination Performance Performance Criteria Criteria Objectivity Objectivity 11–25
  26. 26. Performance Standards Performance Standards Performance Standards – Expected levels of performance • Benchmarks • Goals • Targets Characteristics of Well-defined Standards – Realistic – Measurable – Clearly understood 11–26
  27. 27. STRATEGIC MANAGEMENT & STRATEGIC MANAGEMENT & PERFORMANCE APPRAISEL PERFORMANCE APPRAISELSTRATEGIES PA APPRAISER TECHNIQUESStability& sustainable Traditional SuperiorgrowthExpansion,diversificati Modern 360on,M & A AppraisalRetrenchment Traditional SuperiorLow cost leadership, Modern 360New Product, AppraiselDifferentiation.08/23/12 27
  28. 28. CONTENT OF PA CONTENT OF PAContent to be appraised is determined on thebasis of job analysis.Content to be appraised vary with the purpose ofappraisal & type & level of employees. 11–28
  29. 29. CONTENTS TO BE APPRAISEDCONTENTS TO BE APPRAISED FOR AN OFFICERS JOB FOR AN OFFICERS JOBRegularity of attendance.Self Expression.Ability to work with others.Leadership styles & abilities.Initiative.Technical skill.Technical ability.Ability to grasp new things. 11–29
  30. 30.  Ability to reason. Originality & Resourcefulness. Creative skills. Area of interest. Are of suitability. Judgment skills. Integrity. Honesty . Sincerity. Knowledge of systems & Procedures. 11–30
  31. 31. Who Conducts Appraisals Who Conducts Appraisals Supervisors who rate their subordinates Employees who rate their supervisors Team members who rate each other Outside sources Employees’ self-appraisal Multisource (360° feedback) appraisal 11–31
  32. 32. APPRAISERS APPRAISERS08/23/12 32
  33. 33. APPRAISERS APPRAISERS Who is an Appraiser?An appraiser may be any person who has thoroughknowledge about the job contentContents to be appraised.Standards of contents.Who observes the employee while performing the job. 11–33
  34. 34. Qualities of an appraiser.Should be capable of determining what is moreimportant & what is less important.Should prepare reports.Make judgments without any bias. 11–34
  35. 35. Multisource AppraisalMultisource Appraisal Figure 11–6 11–35
  36. 36. Typical appraisers Typical appraisersSupervisors.Peers.Subordinates.Employees Themselves.Users of serviceConsultants.Performance by all these parties is called 360performance appraisal. 11–36
  37. 37. Appraisers AppraisersThe appraiser may be any person who has thorough knowledge about the job content Contents to be appraised Standards of contents Who observes the employee while performing a job. He should prepare reports and make judgment without bias. 11–37
  38. 38. Self-Appraiser Self-Appraiser Itis a common practice today , with the employees being given a role in evaluating their own performance. The employee is best equipped to evaluate his performance because he understands his strengths and weaknesses the best. 11–38
  39. 39. Superiors Superiors It is the responsibility to ensure that his subordinates perform their jobs well Hence, the authority to evaluate the employee performance has traditionally with the supervisor. Even today, the supervisor has a very important role to play in the appraisal of his subordinates. 11–39
  40. 40. Peers Peers Peer evaluation is a very sensitive area as it may lead to false and unhealthy appraisals, because of the competition among peers. Peer appraisal has to be used to assess the communication & interpersonal skills of the employee, which can affect the team performance. 11–40
  41. 41. Customers/ Clients Customers/ Clients The performance of an employee has a direct & immediate impact on his customers either internal or external. 11–41
  42. 42. Basic Performance Appraisal ProcessBasic Performance Appraisal Process Establishing Standards Communicating Standards to Employees Measuring Actual Performance Comparing Actual with Standards Discussing Reports with Employees Taking Corrective Action 11–42
  43. 43. Performance Standards Performance Standards Performance Standards – Expected levels of performance • Benchmarks • Goals • Targets Characteristics of Well-defined Standards – Realistic – Measurable – Clearly understood 11–43
  44. 44. Terms Defining Standards on One CompanyTerms Defining Standards on One Company 11–44
  45. 45. Methods of performance appraisal Methods of performance appraisalTraditional Methods Modern Methods Confidential Report Graphic Scales Straight Ranking  Assessment Centre Paired Comparisons  Human Resource Grading System Accounting Forced Distribution  Management by Check List Method Objectives Critical Incident Method  360 Degree PA Free Essay Method Group Appraisal Field Review Nominations Work Sample Tests 11–45
  46. 46. Confidential Report Confidential Report This method is used in government departments and public enterprises. These reports differ from dept to dept & from level to level CR is written for a unit of one year and relates to the performance, ability & character of the employee during that year. CR is not data based but subjective 11–46
  47. 47.  No feedback is provided to the employee bring appraises and therefore its credibility is very low This method focuses on evaluating rather than developing the employee. The employee who is appraised never knows his weakness and the opportunities available for overcoming them. In recent years, due to pressure from courts & trade unions, details of a negative confidential report are given to the appraiser. 11–47
  48. 48. Graphic Rating scales Method Graphic Rating scales Method Comparing individual performance to an absolute standard. Judgments about performance are recorded on a scale. Oldest & widely used. Also known as linear rating scale or simple rating scale. Appraisers given printed forms which contain the various objectives, the qualities to be rated like analytical ability, creative ability, initiative, leadership qualities, emotional stability etc in case of managerial personnel. 11–48
  49. 49. Graphic Rating scales Method Graphic Rating scales Method The qualities in respect of workmen could be quantity and quality of work, job knowledge, attitude, dependability, initiative etc. The rating scale used could be continuous rating scale or discontinuous rating scale. In continuous scale, the points are in a particular order. For e.g 0 to 5 i.e. 0,1,2,3,4,5 where 5 is the highest. 11–49
  50. 50. Unsatisfactory Poor Fair Average Good Excellent 0 1 2 3 4 5 Quantity of Work 0 1 2 3 4 5JobKnowledge 0 1 2 3 4 5 Attitude 0 1 2 3 4 5Dependability 0 1 2 3 4 5Cooperation 0 2 3 4 5 1 CONTINUOUS RATING SCALE 11–50
  51. 51. Graphic rating scales Method Graphic rating scales Method In discontinuous scale , the appraiser assigns the points against each quality or character. The points given by the rater to each character are added up to find out the overall performance. The employees are then ranked on the basis of the total points assigned to them. 11–51
  53. 53. Straight Ranking Method Straight Ranking Method The employees are ranked from best to worst on some characteristics. The rater first finds the employee with the highest performance & employees with the lowest performance. The rater then selects the next highest and next lowest and so on until all the employees in that group are rated. Relatively easy and inexpensive but reliability and validity open to doubt. Another limitation is the size of the difference between the various ranks is not well defined. 11–53
  54. 54. Paired Comparison Method Paired Comparison Method The appraiser ranks the employees by comparing one employee with all other employee in the group, one at a time. Each employee is assigned a capital letter like A,B,C,etc & one separate sheet used for each employee. For each plotted pair, write the letter of the employee who has done a superior overall job and assign a certain percentage of the total positive evaluation. 11–54
  55. 55.  If a department has two outstanding employees and six average employees and if this method is correctly used, the two employees will get a much higher percentage of positive comparison than the other six. Number of comparisons = N (N-1) / 2. For large number of employees, it is time consuming. 11–55
  56. 56. Grading System Grading System Certain features like analytical ability, co- operativeness, dependability, job-knowledge, etc are selected for evaluation. The employees are given grades according to the judgment of the rater.The grades may be such as: A-outstanding; B-very good; C-satisfaction D-average; E-below average The actual performance of every employee is rated with various grades in mind 11–56
  57. 57. Forced Distribution Method Forced Distribution Method Is developed to prevent the raters from rating too high or too low. Under this method, the rater after assigning the points to the performance of each employee has to distribute his ratings in a pattern to conform to normal frequency distribution. Requires the raters to spread their employee evaluations in a prescribed distributions 11–57
  58. 58. Forced Distribution on a Bell-Shaped CurveForced Distribution on a Bell-Shaped Curve 11–58
  59. 59. Forced Distribution Forced Distribution– Performance appraisal method in which ratings of employees are distributed along a bell-shaped curve.– Drawbacks • Assumes a normal distribution of performance. • Resistance by managers to placing individuals in the lowest or highest groups. • Providing explanation for placement in a higher or lower grouping can be difficult. • Is not readily applicable to small groups of employees. 11–59
  60. 60. Check List Method Check List MethodA check list is a list of statements that describes the characteristics and performance of employees on the job.Three types: Simple Check List Weighted Check List Forced Choice Checklist 11–60
  61. 61. Simple Check List Simple Check List Under this method the supervisor are provided with printed forms containing descriptive questions about the performance of employees The supervisor has the answer in yes or no. After ticking these questions the forms are sent to Personnel Dept where final rating is done 11–61
  62. 62. Check list for operators.. Check list for operators Is the employee hard working? Yes/No Does he/she possess adequate knowledge about the job? Yes/No Is his/her attendance satisfactory? Yes/No Does he/she maintain his/her equipment in good Condition? Yes/No Does she/he cooperate with coworkers? Yes/No Does he/she keep his/her temper? Yes/No Does he/she obey orders? Yes/No Does he/she observe safety preparations? Yes/No Does he/she complete the work? Yes/No Does he/she evade responsibility? Yes/No 11–62
  63. 63. Weighted Check List Weighted Check List It is used particularly with the objective of avoiding scope for personal prejudices. In this method, weights are assigned to different statements to indicate statements to indicate their relative importance. It involves a very lengthy & time consuming procedure. 11–63
  64. 64. Weighted Checklist Weighted ChecklistTraits Weights Performance Scale Ratings {1 - 5}1. Regularity 0.52. Knowledge of the Job 1.03. Dependability 1.54. Interpersonal relations 2.05.Loyalty 1.56. Leadership Potential 1.5 11–64
  65. 65. Forced Choice Checklist Forced Choice Checklist In this checklist, 5 statements are given for each trait, two most descriptive statements, two least descriptive statements & one neutral statement. The rater is required to tick one statement each from the most descriptive and least descriptive ones. Aim- to minimize the rater’s personal bias. This approach is known as the forced choice method because the rater is forced to select statements which are ready made 11–65
  66. 66. Forced Choice Check List- Sample Forced Choice Check List- Sample1. Regularity Most Least a. Always regular b. Informs in advance for absence or delay c. Never regular d. Remains absent without prior notice e. Neither regular nor irregular 11–66
  67. 67. Critical incident method: Critical incident method: In this method, the performance is rated the basis of certain events or incidents which may have really happened recording these incidents avoids biases and Judgment is easy. e.g. refused to cooperate with co workers refused to undergo future training refused to obey orders Showed presence of mind in saving a worker when there was accidental fire He helped fellow employees in solving their problems 11–67
  68. 68. Free Essay Method Free Essay Method This method requires the manager to write a short essay describing each employees performance during rating period. This format emphasizes evaluation of overall performance, based on strengths/ weaknesses of employee performance rather than specific job dimensions. By asking supervisors to enumerate specific examples of employee behavior, the essay technique minimizes supervisory bias & the halo effect BPL, Birla 3M, Bata- follow this method 11–68
  69. 69. Group Appraisal Group Appraisal Employees are rated by an appraisal group, consisting of their supervisor, 3 or 4 other persons who have some knowledge of their performance. Supervisor- explains to the group the nature of his subordinates duties. Group then discusses the stds of performance for that job, and actual performance of the employee and the causes of their particular level of performance Offers suggestions for future improvements 11–69
  70. 70. Field Review Method Field Review Method An expert from the personnel dept interviews line supervisors to evaluate their respective subordinates. The expert questions the supervisor & obtains all the important information on each employee and takes notes in his note book. There is no rating form with factors or degrees, but overall ratings are obtained.Employees classified into 3 categories Outstanding; satisfactory; unsatisfactory 11–70
  71. 71. Nominations Nominations Appraisers are asked to identify the exceptionally good and exceptionally poor performers, who are then singled out for special treatment 11–71
  72. 72. Work Sample Tests Work Sample Tests Employees are given, from time to time, work related tests which are then evaluated. 11–72
  73. 73. MODERN METHODS MODERN METHODS BARS Assessment Centre Human Resource Accounting Management by Objectives 360 Degree PA 11–73
  74. 74. Behaviorally Anchored Rating Scales {BARS}Behaviorally Anchored Rating Scales {BARS} It combines the benefits of critical incidents & graphic rating scales by anchoring a scale with specific behavioral examples of good or poor performance. 11–74
  75. 75.  3 steps in implementing a BARS System. Determination of relevant job dimensions by the Determination of relevant job dimensions by the manager & the employee manager & the employee Identification of behavioral anchors by manager Identification of behavioral anchors by manager and employee for each job dimensions and employee for each job dimensionsDetermination of the scale values to be used & groupingDetermination of the scale values to be used & grouping Of anchors for each scale value, based on consensus Of anchors for each scale value, based on consensus 11–75
  76. 76. How to construct BARS How to construct BARS Step 1: Collect Critical Incidents Step 1: Collect Critical Incidents Step 2: Identify Performance Dimensions Step 2: Identify Performance Dimensions Step 3: Reclassification of Incidents Step 3: Reclassification of IncidentsStep 4: Assigning Scale Values to the IncidentsStep 4: Assigning Scale Values to the Incidents Step 5: Producing the Final Instrument Step 5: Producing the Final Instrument 11–76
  77. 77. Sample of BARS system Sample of BARS systemDimension: Planning & Organizing Scale Value Anchor5 [ ] Excellent Develops a comprehensive plan, documents well, obtains approval & distributes to all concerned4 [ ] Good Lays out all plans and allows for slack. Satisfies customer time constraints and overruns are infrequent3 [ ] Average Revises due dates as project progresses & investigates customer complaints. Does not report slippages in plan2 [ ] Below Average Poor plans & unrealistic time schedules are common. Cannot plan for more a day or two ahead1 [ ] Unacceptable Seldom completes a project and does not bother. Fails due to lack of planning and is not interested in improving 11–77
  78. 78. Assessment Centre Assessment Centre This method of appraising was first applied in the German Army in 1930. It is a system, where assessment of several individuals is done by various experts by using various techniques. Techniques- in basket, role playing, case studies, stimulation exercises, transactional analysis etc Idea- to evaluate managers over a period of time, by observing & later evaluating their behavior across a series of select exercises. An assessment centre generally measures interpersonal skills, communication skills, ability to plan & organize, self confidence, resistance to stress, mental alertness etc 11–78
  79. 79. Human Resources Accounting Human Resources Accounting It deals with cost of and contribution of human resources to the organization. Cost of the employee includes cost of man power planning, recruitment, selection, induction, placement, training, development, wages & benefits etc. Employee contribution is the money value of employee service which can be measured by labour productivity or value added by human resources. 11–79
  80. 80.  Employee performance can be taken as positive when contribution is more than the cost Performance can be viewed as negative if cost is more than contribution. + Performance- measured in terms of percentage of excess of employee contribution over the cost of employee - Performance calculated in terms of percentage of deficit in employee contribution compared to cost to the employee 11–80
  81. 81. Management By Objectives Management By Objectives Also called as Goal Setting Approach Requires the managers to set a specific measurable goals with each employee and then periodically discuss his progress to wards these goals Always refers to a comprehensive, organization wise goal setting and appraisal programme that consists of the following steps: 11–81
  82. 82. STEPS STEPSi. Set the Organization’s Goalsii. Set departmental Goalsiii. Discuss Departmental Goalsiv. Define Expected Results {Set Individual Goals}v. Performance Reviewvi. Provide Feed Back 11–82
  83. 83. 360 Degree Performance Appraisal 360 Degree Performance Appraisal A 360 degree appraisal system aims at a comprehensive & objective appraisal of employee performance In a 360 degree appraisal system, the employee’s performance is evaluated by his supervisor, his peers, his internal/external customers, his internal/external suppliers and his subordinates. This system reduces the subjectivity of a traditional supervisor appraisal 11–83
  84. 84. 360 Degree Performance Appraisal 360 Degree Performance Appraisal It is also comprehensive because the feedback is given by the peers, customers, suppliers & subordinates of the employee, who are more directly affected by his behavior and performance, apart from the boss. 11–84
  85. 85. Supervisors Supervisors Supervisors include superiors of the employee, other superiors having knowledge about the work of the employee & department head or manager. Immediate superiors appraise then performance which in turn is reviewed by the departmental head/,manager. 11–85
  86. 86. Peers Peers Peer appraisal may be reliable if the work group is stable over a reasonably long period of time and performs tasks that require interaction. Little research has been conducted to determine how peers establish standards for evaluating others or the overall affect of peer appraisal on the group’s attitude. 11–86
  87. 87. Subordinates Subordinates The concept of having superiors rated by subordinates is being used in most organizations today. 11–87
  88. 88. Self-Appraisal Self-Appraisal If individuals understand the objectives they are expected to achieve and the standards by which they are to be evaluated, they are to a great extent in the best position to appraise their own performance. Employee development means self development, employee who appraise their own performance may become highly motivated 11–88
  89. 89. Users of Services // Customers Users of Services Customers Employee performance in service org relating to behaviors, promptness , speed in doing the job and accuracy can be better judged by the customers or users of services. 11–89
  90. 90. Limitations of performance Limitations of performance appraisal appraisal Leniency or severity : A manager may be too lenient towards an employee rating or too severe (strict). Central tendency : Average/middle range of rating may be employed for all employees Halo error: One aspect of the individual influences the performance rating. E.g. an employee going very late & works even after working hours may be favored & promoted Rater effect: Favoritism, stereotyping, biases, sex, age, race and friendship are the reasons. 11–90
  91. 91.  Primacy & recency effects : early stages of career performance or recent performance are count. Spill over effect : past performance rating influences current performance rating. Status effect: depending on the hierarchy or the job title, performance is rated. Perception effect: strong beliefs / prejudice e.g. regional favoritism. Performance dimension effect : error in the measurement of performance. 11–91
  92. 92. Uses of Performance Appraisal Uses of Performance Appraisal Performance Appraisal (PA) – The process of evaluating how well employees perform their jobs when compared to a set of standards, and then communicating the information to employees. – Informal Appraisal • Day-to-day contacts, largely undocumented – Systematic Appraisal • Formal contact at regular time intervals, usually documented 11–92
  93. 93. Uses of Performance Appraisal Uses of Performance Appraisal T & D needs of the employees can be determined Org effectiveness can be improved by improving the individual performances of the employees PAS forms the basis for compensation management in org Can be used for transfers, promotions and other career planning activities of individual employees 11–93
  94. 94. Uses of Performance Appraisal Uses of Performance Appraisal An effective PAS also helps in succession planning in the org An assessment of the value of the human resources helps in org planning. Helps in evaluating and auditing the existing plans, processes and systems in the org. 11–94
  95. 95. Uses of Performance Appraisal (cont’d) Uses of Performance Appraisal (cont’d) Performance Performance Appraisal AppraisalAdministering WagesAdministering Wages Giving Performance Giving Performance Identifying Strengths Identifying Strengths and Salaries and Salaries Feedback Feedback and Weaknesses and Weaknesses 11–95
  96. 96. Feedback as a System Feedback as a System Evaluation EvaluationDataData of Data of Data Feedback Feedback System System Action Based on Action Based on Evaluation Evaluation 11–96
  97. 97. Appraisal Interview HintsAppraisal Interview Hints Figure 11–12 11–97
  98. 98. Essentials of an Effective Appraisal SystemEssentials of an Effective Appraisal System Mutual Trust &  Job relatedness confidence  Feed back Reliability  Individual differences Validity  Post Appraisal Specific Objectives Interview Standardization  Review & Appeal Training to Appraisers 11–98
  99. 99. Performance Management System Performance Management System Effective PMS systems are: – Consistent with the strategic mission of the organization – Beneficial as development tool – Useful as an administrative tool – Legal and job-related – Viewed as generally fair by employees – Effective in documenting employee performance 11–99
  100. 100. Performance Appraisals and the Law Performance Appraisals and the Law PA is used as basis of so many HR Decisions like promotions, dismissals, transfers etc Appraisal system is a common target of legal disputes by employees, involving charges of unfairness and personal biases Recommendations have been made to assist the employers in conducting PA and to avoid legal suits. Recommendations are based on the court judgment. 11–100
  101. 101. Performance Appraisals and the Law Performance Appraisals and the Law Legally Defensible Appraisal Procedures – Every org should have a formal standardized performance appraisal system. All the HR decisions should be based on this system. – Employees should be aware and knowledgeable about all specific performance stds. – All the employees should be given opportunity to review their appraisal results. – Supervisor should be trained to use the appraisal instruments properly 11–101
  102. 102. Performance Appraisals and the Law Performance Appraisals and the Law Legally Defensible Appraisal Procedures – Appraisal criteria based on job analysis – Absence of disparate impact and evidence of validity – Formal evaluation criterion that limit managerial discretion – Formal rating instrument linked to job duties and responsibilities – Personal knowledge of and contact with ratee – Training of supervisors in conducting appraisals – Review process to prevent undue control of careers – Counseling to help poor performers improve 11–102
  103. 103. Performance Appraisals and the Law Performance Appraisals and the Law Legally Defensible Appraisal Content – Job analysis should be conducted to establish the performance appraisal contents. – Appraisals based on traits should be avoided unless these can be defined in terms of observable behavior. – Specific job related performance dimensions should be used rather than global measures. – Subjective ratings should be used only as one component of the overall appraisal process – Performance dimension should be assigned weights to reflect their relative importance in calculating the composite performance score. 11–103
  104. 104. Performance Appraisals and the Law Performance Appraisals and the Law Legally Defensible documentation of appraisal results – Written documentation for extreme ratings should be maintained and it must be consistent with numerical ratings – All the raters should follow consistent documentation requirements – A written documented record of all information and reasons bearing on any HR decisions should be properly maintained. 11–104
  105. 105. Performance Appraisals and the Law Performance Appraisals and the Law Legally Defensible appraisers – The raters should be trained in or thoroughly instructed in how to use an appraisal system – The raters should have substantial daily contact with employees they are rating. – Whenever possible, have more than one rater conduct the appraisal and conduct all such appraisal & conduct all such appraisals independently. 11–105
  106. 106. 11–106