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performance-appraisel-semester-ihrm-chapter-v.ppt
1.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e C H A P T E R 5
2.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Introduction It is the process of assessing the performance and progress of an employee of a job and his potential for future development Definition According to Flippo “performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in matters pertaining to his present job and his potential for a better job” © N. B. Scott
3.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Concepts of Performance Management – PA is a process of obtaining, analyzing and recording information about the relative worth of an employee. It has following characteristics - It is a systematic examination of an employee’s strengths and weakness in terms of the job PA is a scientific and objective process It is continuous process The main purpose of it is to secure information necessary for making objective and correct decisions on employees © N. B. Scott
4.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Objectives:- 1. To provide feedback to employees so that they come to know where they stand and can improve their job performance 2. To provide a valid database for personnel decisions concerning placements, pay, promotion, transfer etc. [[[ 3. To diagnose the strengths and weaknesses of individuals so as to identify further training needs. [ 4. To provide coaching, counseling, career planning and motivation to subordinates 5. To develop positive superior-subordinate relations and there by reduce grievances 6. To facilitate research in personnel management 7. To test the effectiveness of recruitment, selection, placement and induction programme
5.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Uses of performance Appraisal:- PA provides valuable information for personnel decisions such as increase in pay, promotion, training, termination etc. It helps to judge the effectiveness of recruitment, selection, placement and orientation system of organization It helps to improve performance through appropriate feedback It facilitates human resource planning, career planning It promotes competitive sprit to improve performance Systematic appraisal of performance helps to develop confidence among employees
6.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Need for performance appraisal:- To provide information about the performance ranks on which decision regarding salary, confirmation, promotion, transfer and demotion are taken To provide feed back information about the level of achievement and behavior of subordinate To provide information which helps to counsel the subordinate? To provide information to diagnose deficiency in employee regarding skill, knowledge, need of T&D and prescribe the means for employees growth To prevent grievance and in disciplinary activities
7.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Essentials of an effective performance appraisal system:- Mutual trust Clear objectives Standardization – criteria, form, procedure, techniques Training to evaluator Focus on job related behavior and performance Documentation Feedback and participation Diagnose the individual difference Post appraisal interview Review and appeal
8.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Process of performance appraisal: 1. Establishing performance standards / goals 2. Communicating the standards 3. Measuring performance 4. Comparing the actual with the standards 5. Discussing the appraisal 6. Taking corrective action
9.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Different methods of Performance Appraisal – There are several methods and techniques used for evaluating / assessing employees performance. These are classified as A] Traditional methods 1. Confidential Report – 2. Free from or essay method – 3. Straight ranking - 4. Paired comparisons – 5. Forced Distribution 6. Graphic rating scale 7. Checklist method 8. Critical incidents 9. Group appraisal 10.Field review B] Modern methods 1. Assessment centre 2. Human Resource Accounting 3. Behaviorally Anchored Rating Scale 4. Appraisal through MBO 5. 360 Degree appraisal
10.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e A] Traditional methods : 1. Confidential Report Prepared by employee’s immediate boss, covers strength and weakness, achievement and failure, personality and behavior of the employee 1. It is descriptive appraisal used for promotions and transfer of employees 2. It involves subjectivity as is based on impression rather than on data 3. It s credibility is very low therefore no feedback is provided to the employee being appraisal.
11.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 2. Free from or essay method – Under this method, the evaluator writes a short essay on the employee’s performance on the basis of over all impression. The description is expected to be as factual and concrete as possible. This can provide a good deal of information about employee and evaluator can explain with the help of examples. This method suffers from several drawbacks – 1. The appraisal may be loaded with flowery language 2. The quality of appraisal depends on the writing ability of evaluator 3. It is very time consuming 4. Difficult to compare two essay appraisal
12.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 3. Straight ranking - Here evaluator assigns relative rank to the employees in the same work unit doing the same job. Employees are ranked from the best to the poorest on the basis of performance. The ‘whole person’ is compared with the other ‘whole person’ without analyzing performance. Employee - A B C D E Rank - 2 1 5 4 3 It is one of the oldest and simple methods, it has several weaknesses: It involves bias and snap Judgement Difficult to rank as having varying behavior pattern it indicate only how a person stands in relation to other in the group but not how much better or worse
13.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 4. Paired comparisons – Here each employee is compared with all the others in pairs one at a time. The number of times an employee is judged better than the others determines his rank. Comparison is made on the basis of overall performance. The number of comparisons to be made can be decided on the basis of the formula - N ( N -1) 2 Where N – is number of person to be compared This method is easier and simpler than ranking method but it is subjective because appraisal is not based on specific job related performance. Secondly, it becomes very cumbersome when the number of employees to be rated is large.
14.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 5. Forced Distribution - In this method, the rater is required to distribute his rating in the form of a normal frequency distribution as in fig. The purpose is to eliminate the rater’s bias or central tendency. Here also ranking technique is used. This method is highly simple to understand and easy to apply. Secondly it helps to reduce bias involved in straight ranking and paired compared. But in this method employees are placed in a certain category and not ranked within a category. The method is based on same distribution of good and poor performance. The rater does not explain why an employee is placed in a particular category. Specific job related criteria is not used in rating
15.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e
16.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 6. Graphic rating scale It is numerical scale indicate different degree of a particular trait. The rater distributes a printed forms for each employee to be rated. The form contains several characteristics relating to the personality and performance of employees - Intelligence, quality of work, leadership skills, Judgement etc. The rater records his Judgement about employees traits on the scale. The numerical points given to an employee are added up to find out his overall performance. Rating scale is of two types – continuous and discontinuous. In continuous scale the degree of traits are measured in number ranging from 0 to 5 where as in a discontinuous scale appropriate boxes are used.
17.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Continuous scale 0 1 2 3 4 5 Discontinuous scale Poor Average good Excellent It is easy to understand and use It is economical to design and administer and rating scale Drawbacks: It is arbitrary and subjective – specific job related performance criteria are not considered It is assumed that each trait is equally important for all job Descriptive word are used in rating scale It imposes heavy burden on rater
18.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 7. Checklist method It is list of statement that describes the characteristics and performance of employees on the job. The rater checks to indicate if the behavior of an employee is positive or negative to each statement. The performance of employee is rated on the basis of number of positive checks. There are simple, forced choice and weighted checklists This method is descriptive technique and provides concrete examples of evaluation Drawbacks: Time consuming and expensive Difficult to assemble, analyze and weigh several statement properly
19.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 8. Critical incidents In this method the supervisor keeps a written record of critical events (good/ bad) and how different employee depends upon on his positive / negative behaviors during these events. These critical incidents are identified after thorough study of the job and discussion with the staff e.g. a fire, a sudden breakdown of machinery, a serious accidents etc. may be identified as critical incidents for the working of a factory This method helps to avoid vague impression and general remark as the rating is based on actual records of behavior performance. The feedback from actual events can be discussed with the employee to allow improvements.
20.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e worker Reactions Score A Informed the supervisor immediately 5 B Became anxious of loss of out put 4 C Tried to repair the machine 3 D Complained of poor maintenance 2 E Was happy to get forced rest 1
21.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Drawbacks: It is very time consuming and cumbersome for the supervisor to maintain a written records of each employee Quoting incident after considerable time lapse may evoke negative emotion from employee. Subjective Judgement of supervisor is involved in deciding critical problem The superior may commit errors in recording behavior of different employee during short duration
22.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 9. Group appraisal - Under this method a group of evaluators assess employees. This group consists of the immediate supervisor of the employee, other supervisors having close contact with the employees work, head of the department and personnel expert. The group determines the standard of performance for the job, measures actual performance of an employee, analyzes the cause of poor performance and offers suggestion for improvement in future. The advantage of this method is that it is simple yet more thorough. Due to multiple evaluators personal bias is minimise but it is very time consuming process.
23.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 10. Field review - In this method, a training officer from the personnel department interviews line supervisor to evaluate their subordinates. The supervisors prepares questionnaire in advance to be asked. By answering these questions a supervisor give his opinions about the level of performance of his subordinates, the subordinates work process, his strengths and weaknesses, promotional potential etc. These are then placed in the employees personal service file. The supervisor’s personal bias is reduced due to active involvement of the personnel officer. The ratings are usually classified in to three categories- outstanding, satisfactory, and unsatisfactory. This is time consuming method and success depends upon the competence and sincerity of interviewer.
24.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e B] Modern methods The traditional methods all focus more on the traits of an employee than his performance. In absence of pre-decided performance criteria or standards, the personal bias or subjectivity or the evaluator affects on ratings. In order to overcome these weaknesses some new techniques of performance appraisal have been developed- 1. Assessment centre- An assessment centre is group of employee drawn from different work unites. These employees work together on an assignment similar to the one they would be handling when promoted. Evaluators observe and rank the performance of all the participants. Experienced manager with proven ability serve as evaluator.
25.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e This group of evaluators evaluates all employees both individually and collectively by using simulations technique like role playing, business games and basket exercises. The evaluators observe and evaluate employee as they perform jobs. Assessments are done generally to determine employee potential for promotion. The evaluators prepare a summery report and feedback is administered on a face to face basis to the employees. This method measures generally – inter personal skill, communication ability, ability to plan and organize etc. This method helps – to determine training and development need of employee and provides data for HRP. It helps to select students for entry level position. All of them get equal opportunity to prove their merit. They are evaluated by a team of trained assessors This method is – a time consuming and expensive. Candidates who receive a negative report may feel demoralized.
26.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 2. Human Resource Accounting H R is a valuable asset of any organization. This asset can be valued in terms of money. When competent and well trained employee leaves an organization, the human asset of the organization get decreased. Under this method performance is judged in terms of costs and contributions of employees. Costs of human resources consists of expenditure on HRP, recruitment, selection, induction, training, compensation etc. contribution of HR is the money value of labour productivity or value added by HR. Difference between cost and contribution will be the performance of employee
27.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 3. Behaviorally Anchored Rating Scale This method combines graphic rating scales with critical incidents method. BARS are descriptions of various degree of behavior relating to specific performance dimensions. Critical areas of job performance are determined in advance. The rater records the observable job behavior of an employee and compares these observations with BARS. In this way employee’s actual performance is judged against the desired behavior. The steps involved in constructing BARS are- 01.dentifying critical incidents: A person to be appraised, describes with specific examples of both effective and ineffective job behavior 02. Select performance dimensions: Cluster the behavior incident into a smaller set of performance dimensions 03. Retranslate the incidents Another group of experts assign each incident to the dimension that it best describes if there is 75% agreement with the first group
28.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 04. Assign scale to incidents The second group rates each incident on a seven or nine point scale. Rating is done on the basis of how well the behavior described in the incident represents performance on the appropriate dimensions. Means and standard deviations are then calculated for the scale value assigned to each incident. Incidents that have standard deviations of 1.5 or less (on seven point scale) are included in the final anchored scale 05.Develop final instrument A subset of the incidents that meets both the retranslation and standard deviation criteria is used as a behavioral anchor for the final performance dimensions. A final BARS instruments typically comprises a series of vertical scale that are endorsed by the included incidents. Each incident is positioned on the scale according to its mean value Advantages: The rating likely to be accurate because these are done by experts The method is more reliable and valid as it is job specific and identifies observable and measurable behavior. The rater’s bias is reduced. Ratings are likely to be more acceptable due to employee participation The use of critical incidents is useful in providing feedback to the employee being rated. Weakness: It is very time consuming and expensive to develop BARS for every job Behaviors used are more activity oriented than result oriented. Several
29.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 05. Appraisal through MBO This concept of management by objective MBO was developed by Peter Drucker in 1954. He called it ‘management by Objective and self control’. It is also known as “work planning and review” or “goal setting approach” to appraisal. It has been defined as “ a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual’s major areas of responsibility in terms of results expected of him and use these measure as guides for operating the unit and assessing the contributions of each of its members” MBO Process: 1. The main steps involved in MBO are as- 2. Set organizational goals 3. Define performance targets 4. Performance reviews 5. feedbacks
30.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e 360 Degree appraisal Appraisal by colleague, superior, subordinate, and friends
31.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Problems in performance appraisal or limitations A] Errors in rating Halo effect - It is the tendency to rate an employee consistently high or low on the basis of overall impression. One trait of the employee influences the rater’s appraisal on all other traits. stereotyping – This implies forming a mental picture of a person on the basis of his age, sex, cast or religion central tendency – it means assigning average rating to all the employees in order to avoid commitment or involvement. The ratings are clustered around the mid-point. constant error- Some evaluators tend to be lenient while other are strict in assessing performance personal bias – Occurs because of the rater’s likes and dislikes about an employee; religious beliefs and habits, regional, conflicts etc. b] Lack of reliability c] Incompetence of rater d] Negative approach - to punish e] Multiple objectives f] Resistance from T.U. g] Lack of knowledge about how to rate, inexperienced rater
32.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Case Study
33.
Copyright © 2003
by The McGraw-Hill Companies, Inc. All rights reserved. McShane/ Von Glinow 2/e Thank you
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