Performance Appraisal class 1


Published on

Published in: Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Performance Appraisal class 1

  1. 1. Module-1
  2. 2.  Performance Appraisal (PA) refers to all those procedures that are used to evaluate the personality performance, potential of its group members 2
  3. 3.  Performance appraisal is a method of evaluating the behaviour of employees in the workspot, normally including both the quantitative & qualitative aspects of job performance. PA is the systematic evaluation of the individual with respect to his/her performance on the job & his/her potential for development. 3
  4. 4.  It Provide a basis for promotion/ transfer/ termination: Identify those employees who deserve promotion Or those who Enhance employees’ effectiveness require lateral shift (transfer) or termination, PA is used for career planning . by helping to identify their strengths and weaknesses and Inform them about expected levels of performance If employees understand their roles well, they are likely to be more effective on the job . 4
  5. 5.  Identifying training and development needs of employees is necessary to prepare them for meeting challenges in their current and future employment. Aid in designing training and development programs: Identifying skills required to be developed would help in tailor- making training and development programs. 5
  6. 6.  Remove work alienation: Counseling Employees to correct misconceptions which might result in work alienation. Remove discontent: Identifying and removing factors responsible for workers’ discontent would motivate them for better work performance. Develop inter-personal relationships: Relations between superior - subordinate can be improved through realization that each is dependent on the other for better performance and success 6
  7. 7.  Aid wage administration: Performance appraisal can help in development of scientific basis for reward allocation, wage fixation, incentives. Improve communication:Performance appraisal serves as a mechanism for communication between superiors and subordinates 7
  8. 8.  Provide information about the performance ranks basing on which decision regarding salary fixation, confirmation, transfer , promotion & demotion are taken. Provide information to diagnose deficiency in employee regarding skill, knowledge, determine training & development needs & to set new standards of work, if necessary. Provide information for correcting placement. 8
  9. 9.  Provide feedback information about the level of achievement & behaviour of subordinate. Provide information which helps to counsel the subordinate. To prevent grievances & indisciplinary activities. 9
  10. 10. 1. Validity2. Reliability3. Freedom from bias a. Legal issues of fairness b. Freedom from rating errors4. Practicality 10
  11. 11.  Establish Performance Standards: Performance standards serve as benchmarks against which performance is measured Standards should relate to the desired results of each job. Communicate the Standards : Performance appraisal involves at least two parties, the appraiser who does the appraisal and the appraisee whose performance is being evaluated. 11
  12. 12.  The appraiser should prepare job descriptions clearly; help appraisee set his goals and targets; analyse results objectively; offer coaching and guidance to appraisee whenever required and reward good results. The appraisee should be very clear about what he is doing and why. 12
  13. 13.  Performance measures may be objective or subjective . Objective performance measures are indications of job performance that can be verified by others and are usually quantitative. Subjective performance measures are ratings that are based on the personal standards or opinions of those doing the evaluation and are not verifiable by others. 13
  14. 14. Compare Actual performance with Standardsand Discuss the Appraisal,Actual performancemay be better than expected and sometimesit may go off the track Whatever be theconsequences, there is a way to communicateand discuss the final outcome 14
  15. 15.  Corrective action is of two types One puts out the fires immediately, Other strikes at the root of the problem permanently 15
  16. 16.  In order to be effective, the criteria for performance appraisal should be genuinely related to success / failure in the job and should be amenable to objective judgement MBO is an example of performance-based appraisal approach that involves setting objectives and comparing performance against those objectives. Performance Criteria Objectives give greater freedom to both management and the employees in deciding how performance is to be measured. 16
  17. 17.  Benefits of Performance Appraisal For the appraisee Better understanding of his role in the organization—what is expected and what needs to be done to meet those expectations Clear understanding of his strengths and weaknesses to develop himself into a better performer in future. 17
  18. 18.  Increased motivation, job satisfaction, and self-esteem Opportunity to discuss work problems and how they can be overcome Opportunity to discuss aspirations and any guidance, support or training needed to fulfil those aspirations Improved working relationships with supervisors . 18
  19. 19.  Identification of performers and non- performers and their development towards better performance Opportunity to prepare employees for assuming higher responsibilities. Opportunity to improve communication between the employees and management Identification of training and development needs Generation of ideas for improvements Better identification of potential and formulation of career plans 19
  20. 20.  Improved performance through out the organization Creation of a culture of continuous improvement and success Conveying the message that people are valued. 20
  21. 21. TRADITIONAL MODERN Graphic rating scale  Behaviorally anchored Ranking method rating scales Paired comparison method Forced distribution method  Assessment center Checklist method  Human resource accounting Essay or free form appraisal  Management by objectives Group appraisal  Psychological appraisals Confidential reports 21
  22. 22.  Confidential report Essay evaluation Critical incidents Checklists Graphic rating scale Behaviorally anchored rating scale Forced choice method MBO. 22
  23. 23.  Ranking , Paired comparison, Forced distribution,Other methods, Performance tests, Field review technique. 23
  24. 24.  Confidential Report Descriptive report Prepared at the end of the year Prepared by the employee’s immediate supervisor, The report highlights the strengths and weaknesses of employees . Prepared in Government organizations Does not offer any feedback to the employee. 24
  25. 25.  Essay Evaluation The rater is asked to express the strong as well as weak points of employee’s behavior The rater considers the employee’s : Job knowledge and potential Understanding of company’s programs, policies, objectives etc Relation with co- workers and supervisors Planning, organizing and controlling ability Attitude and perception 25
  26. 26. This method has the following limitations: Highly subjective. Supervisor may write biased essay. Difficult to find effective writers. A busy appraiser may write the essay hurriedly without assessing properly the actual performance of the worker. If the appraiser takes a long time it becomes uneconomical from the view point of the firm  Used in the companies like BPL, Bata, Wheels India, Birla & others.. 26
  27. 27.  Manager prepares lists of statements of very effective and ineffective behavior of an employee. These critical incidents represent the outstanding or poor behavior of the employees. The manager periodically records critical incidents of employee’s behavior . 27
  28. 28.  Critical Incident Technique Example: July 20 - Sales clerk patiently attended to the customers complaint. He is polite, prompt, enthusiastic in solving the customers’ problem July 20 - The sales assistant stayed 45 minutes beyond his break during the busiest part of the day. He failed to answer store manager’s call thrice. He is lazy, negligent, stubborn and uninterested in work. 28
  29. 29.  Negative incidents may be more noticeable than positive incidents. Supervisors have a tendency to unload a series of complaints about incidents. Results in very close supervision which may not be liked by the employee. The recording of incidents may be a chore for the manager concerned who may be too busy or forget to do it 29
  30. 30.  A checklist is a set of objectives or descriptive statements about the employee and his behavior. If the rater believes that the employee possesses a listed trait, the item is checked A rating score equals the number of checks 30
  31. 31.  Simple checklist method Weighted checklist method Forced choice methodSimple checklist method: Is employee regular Y/N Is employee respected by subordinate Y/N Is employee helpful Y/N Does he follow instruction Y/N Does he keep the equipment in order Y/N 31
  32. 32. weights performance rating (scale 1 to 5 ) Regularity 0.5 Loyalty 1.5 Willing to help 1.5 Quality of work 1.5 Relationship 2.0 32
  33. 33. Was developed because graphic rating scales allowed supervisors to rate everyone high The rater must choose from a set of descriptive statements about employee Supervisors check the statements that describe the employee, or they rank the statements from most to least descriptive Forced choice can be used by superiors, peers, subordinates, or a combination of these 33
  34. 34. Criteria Rating Regularity on the job Most Least• Always regular• Inform in advance for delay• Never regular• Remain absent• Neither regular nor irregularUsed in the companies like WIDIA, CEAT, Modern threads & others. 34
  35. 35.  The rater may rate his employees at the higher or lower end of the scale earlier. The normal distribution curve is used.  Used in the companies like Usha, SPL, JCT & others. 35
  36. 36.  This is the simplest and most popular technique for appraising employee performance . The typical rating scale system consist of several numerical scales, each representing a job related performance criterion such as dependability, Initiative, out put attendance , attitude, co-operation, and the like. Each scale ranges from excellent to poor. The rater checks the appropriate performance level on each criterion, then computes the employees total numerical score. Graphic Rating Scale form is used to evaluate the performance of the employees A variety of traits may be used in this device, the most common being quality and quantity of work. 36
  37. 37.  Employee name_________ Dept_______ Rater’s name ___________ Date________ ------------------------------------------------- ----------------------- Exc. Good Acceptable Fair Poor 5 4 3 2 1 _ Dependability Initiative Overall output Attendance Attitude Cooperation Total score 37
  38. 38.  Behaviorally Anchored Rating Scale Combination of rating scale and critical incidence Steps Collect critical incidents Identify performance dimensions. Reclassification of incidents. Assigning scale values to incidents Producing the final instrument
  39. 39.  MBO emphasizes collectively set goals that are tangible, verifiable, and measurable Focuses attention on goals rather than on methods Concentrates on Key Result Areas (KRA) Systematic and rational technique that allows management to attain maximum results from available resources by focusing on achievable goals 39
  40. 40.  Arranging organizational goals in a means- ends chain Engaging in joint goal setting This process has the following steps: Identify KRAs Define expected results Assign specific responsibilities to employees. Define authority and responsibility relationship Conducting periodic progress review Conducting annual performance review
  41. 41.  Ranking method: The evaluator rates the employee from highest to lowest on some overall criteria. Ex :if there are 30 workers in a work group the most efficient employee may be ranked as number one and the least efficient employee as number thirty.Advantages: Easy and inexpensive Disadvantages: Not well defined Raters bias 41
  42. 42.  Employee Rank A 2 B 1 C 3 D 5 E 4 42
  43. 43.  Paired comparison method : Each worker is compared with all other employees in a group For several traits paired comparisons are made, tabulated and then rank is assigned to each worker This method is not applicable when the group is large. This method results in each employee being given a positive comparison total and a certain percentage of the total positive evaluation. 43
  44. 44.  A B C D E Final Rank A - - - + + 3 B + - - + + 2 C + + - + + 1 D - - - - + 4 E - - - - - 5 No of Positive evaluation Total no. of evaluation * 100 = employee superior evaluation 44
  45. 45.  The rater is asked to appraise the employee according to predetermined distribution scale. Two criteria used for rating are: job performance and promotability. A five point performance scale is also used without mentioning any descriptive statements. The worker is placed between two extremes of ―good‖ and ―bad‖ performance. 45
  46. 46.  Group Appraisal Employee is appraised by a group of appraisers. The group consists of Immediate supervisor of the employee Other supervisors who have close contact with the employee’s work. Manager or head of the departments. Consultants or Clients. Used in the companies like Kinetic Honda, Blue star, Birla VXL & others. 46
  47. 47.  Field Review Technique The appraiser goes to the field and obtains the information about work performance of the employee by way of questioning the said individual, his peer group, and his superiors 47
  48. 48.  Conducted to assess employees’ potential. Psychological Appraisals consists of: ◦ In-depth interviews ◦ Psychological tests ◦ Consultations and discussions with the employees ◦ Discussions with superiors, subordinates and peers, etc. 48
  49. 49.  Evaluation is conducted in the areas of: ◦ Employees intellectual abilities ◦ Emotional stability ◦ Motivational responses ◦ Reasoning and analytical abilities ◦ Interpretation and judgement skills ◦ Sociability ◦ Ability to foresee the future, etc. 49
  50. 50.  Let the Employee Know Where He Stands To help employees do a better job by clarifying what is expected of them. To plan opportunities for development and growth To strengthen the superior- subordinate working relationship by developing mutual agreement of goals. To provide an opportunity for employees to express themselves on performance related issues. 50
  51. 51.  360 Degree Appraisal 360 degree feedback, also known as multi-rater feedback, is the most comprehensive appraisal where the feedback about the employees’ performance comes from all the sources that come in contact with the employee on his job. Organisations are increasingly using feedback from various sources such as peer input, customer feedback, and input from superiors. Different forms with different formats are being used to obtain the information regarding the employee performance. 51
  52. 52.  360o Appraisal System It is a systematic collection and feedback of performance data on an individual or group, derived from a number of stakeholders Data is gathered and feed back to the individual participant in a clear way designed to promote understanding, acceptance and ultimately behavior . 52
  53. 53.  According to a wall street journal headline, ―Teams have become commonplace in U.S. Companies‖. Most of the performance appraisal techniques are formulated with individuals in mind i.e. to measure and rate the performance of the individual employee. Therefore, with the number of teams increasing in the organisations, it becomes difficult to measure and appraise the performance of the team. The question is how to separate the performance of the team from the performance of the employees. A solution to this problem that is being adopted by the companies is to measure both the individual and the team performance. Sometimes, team based objectives are also included in the individual performance plans. 53
  54. 54.  Also known as the ―Up or out policy‖, the rank and yank strategy refers to the performance appraisal model in which best-to-worst ranking methods are used to identify and separate the poor performers from the good performers. Then the action plans and the improvement opportunities of the poor performers are discussed and they are given to improve their performance in a given time period, after which the appropriate HR decisions are taken. Some of the organisations following this strategy are Ford, Microsoft and Sun Microsystems. 54
  55. 55.  BPO sector offers handsome initial salary, good growth and many other benefits to its employees. Keeping in relatively a new sector in the Indian industry, but has established itself well and is growing at a rapid rate. mind the attrition rates in the sector, the performance measurement and appraisal processes are of extreme importance in BPO’s. It is often used as one of the tools to retain the employees. 55
  56. 56.  BPO employees have the advantage of getting performance based incentives. In most of the BPO organisations, there are well designed schemes for awarding the performance based incentives to the individuals and/or the teams as a whole. An incentive on the completion of the defined targets is a common practice in BPO’s. 56
  57. 57. The general parameters for the measurement of employees’ performance are: Speed i.e. process performance, Accuracy and Productivity of each process, 57
  58. 58. HRA : Deals with cost of and contribution of human resources to the organization. Positive employee performance: contribution ↑ cost ↓ Negative employee performance: contribution ↓ cost ↑ 58
  59. 59. Getting PA from the computers based upon the data stored in the computer about the employee.Assessment Centre: Individuals from various departments are brought together to spend 2 or 3 days. Observers rank the performance of each and every participant in order of merit. 59
  60. 60.  Since assessment centers are basically meant for evaluating the potential of candidates to be considered for promotion. 60
  61. 61. I. Judgment errors: 1. First impressions(primacy effect) 2. Halo errors 3. Horn effect (down grades other aspects of employee’s performance because of a single performance dimension ) 4. Leniency 5. Central tendency 6. Contrast error (Compare people against one another instead of against an objective ) 7. Recency effect 61
  62. 62. II. Poor appraisal forms: 1. Vague & unclear rating scale 2. Ignore important aspects of job performance 3. Additional & irrelevant performance 4. Too long and complexIII. Lack of rater preparednessIV. Ineffective organizational policies & practices 62
  63. 63.  Trait based system Behaviour based system Result based system 63
  64. 64. 1.Loyalty to Company– v.low low avg H V.H2.Communication ability –3.Co-operativeness -- 64
  65. 65.  Greets customer in a pleasant and friendly manner. Is unable to explain technical aspects of a product to a customer. Getting approval from the supervisor1=never 4=frequently2=rarely 5=almost always3=sometimes 65
  66. 66.  No.of units produced this month ------ No.of units produced that were rejected & scrapped by quality control-------- No.of units produced that were rejected & returned for repair -------- No.of days absent in this month without certified medical cause------- 66
  67. 67.  Frank Henderson is the manager of General Electric’s Appliance Division. Each April, he must evaluate all his subordinates to decide who is to receive a merit increase for the upcoming fiscal year. But each year these employees complain about how they are evaluated, how merit money is dispersed and what criteria are used for the evaluations. 67
  68. 68.  However, during the past two years there has been a tremendous emphasis on quality of production. A review of the merit recipients reveals that these people were the ones who had the best quality records. But many of the employees felt that quality should not be the determining factor. At an employee forum, one of the senior members remarked: “How can Frank now reward quality? What happened to production numbers?” 68
  69. 69. Another employee agreed and stated: “This quality game is okay for some, but what about overall production? It seems to me that if I will only be rewarded for quality, then I should produce a few items but make them perfect.” After hearing such criticism, Frank was quite upset. He wasn’t trying to cause chaos in his evaluations, nor was he attempting to hurt anyone. Unfortunately, what was originally intended to be an appraisal system had just become a nuisance. 69
  70. 70. 1. What is the major problem with Frank’s appraisal system?2. Describe a performance appraisal system that you could recommend to Frank for evaluating a worker on the production line.3. If no changes are made in the current system that Frank is using, what do you expect will occur regarding future production performance of the employees?4. What does this case tell us about the impact of performance appraisals on employee motivation? 70
  71. 71. THANK YOU 71