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Article on performance appraisal
1. Article on performance appraisal
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I. Contents of getting article on performance appraisal
==================
Performance appraisal was once the unquestioned way of doing things, thefamiliar ritual in
which employees and managers sat down for an annualevaluation. If the employees were lucky,
they walked away with raises, oftentied to a ranking on some sort of rigid numerical scale.
Nobody really liked it,but in the old command-and-control style of organizational leadership,
thisseemed like a perfectly appropriate model for measuring performance.
But today, with the widespread emphasis on teamwork, shared leadership, andan ongoing
struggle to find and retain qualified employees, it's a model that isfalling increasingly out of
favor, says Fred Nickols, a senior consultant withThe Distance Consulting Company in
Robbinsville, New Jersey.
In a recent survey conducted jointly by the Society for Human ResourceManagement and
Personnel Decisions International 32 percent of the HRprofessionals surveyed indicated that they
were "unsatisfied" or"very unsatisfied" with their organizations' performance-
managementsystems. They cited deficiencies in leadership development, coaching, 360-
degreefeedback, and development planning. Twenty-two percentsaid that the greatest challenge
they face is a lack ofsupport from top management. Forty-two percent of the organizationsthat
participated reported that executives do not even bother to reviewthe performance-management
systems that are currently in place.
If companies don't do annual performance reviews, however, what will taketheir place? More
and more, organizations are turning to systems of performancemanagement. That is what Nickols
2. advocated in 1997 with his provocatively titledarticle, "Don't Redesign Your Company's
Performance Appraisal System, ScrapIt!" (Corporate University Review, May-June, 1997).
Recently, authors TomCoens and Mary Jenkins have devoted a book to the subject: Abolishing
Performance Appraisals: Why They Backfire And What to do Instead (Berrett-KoehlerDecember
2000), which is full of examples of companies that scrapped traditionalperformance-appraisal
systems.
And although Nickols, Coens and Jenkins advocate an end to performanceappraisals, that's
just the beginning of performance management. It rests on thefollowing basic principles,
according to Nickols:
Goals should be set and agreed upon by both the manager and the employee.
Metrics for measuring the employee's success in meeting those goals shouldbe clearly
articulated.
The goals themselves should be flexible enough toreflect changing conditions in the
economy and theworkplace.
Employees should be able to think of their managers as coaches who arethere not to pass
judgment, but to help them achieve success.
The "what to do instead" in Coens and Jenkins' book is nothing lessthan a "whole cultural
shift" in an organization, said Coens, anorganizational trainer, employment law attorney, and
educator in humanresources.
Instead of measuring employees' performance and pointing out where they fallshort,
organizations will achieve more results by finding ways to fine-tune andimprove their systems.
So, rather than have hotel management ding a desk clerkin an annual review for being too slow
in processing thecheck-outs of departing guests, it would be more productive to set up an
expresscheck-out system.
Jenkins and Coens cite several case studies in which organizations dumpedtraditional
performance appraisals in favor of performance management processesthat "decoupled"
everything that is packed into the typical review:coaching, feedback, compensation and
promotion decisions, and legaldocumentation:
The 500-person Madison, Wisconsin, Police Department stopped doingtraditional
appraisals for all but probationary officers in 1989-1990,replacing them with a system of
individual goal-setting,leadership-training, and employee involvement that extends to
3. officerschoosing which sergeants they want to work with, sergeants choosinglieutenants
and so on.
A U.S. Department of Justice study of 12 metropolitanpolice departments found Madison
police to be the highest in satisfactionlevel among citizens, for both white and non-white
communities. Each year,the department receives more than 1,000 applications for the
department'stwo dozen openings.
University of Wisconsin Credit Union, also located in Madison, replacedits appraisal
system with an array of elective, flexible, coaching tools andformats. The result has been
improved employee satisfaction and a dramaticreduction in turnover, Coens said.
The argument against traditional performance appraisals also was persuasiveenough to get the
attention of Bruce Mallory, vice president of financialservices for SELCO Credit Union in
Eugene, Oregon.
After contacting Nickols, SELCO scrapped the credit union's entireperformance appraisal
system. Instead of using a complex set of matrices todetermine raises for SELCO's 200
employees, they opted to give individualmanagers a pool of money to work with every year. The
managers could then awardbonuses and raises as they saw fit. And instead of using a formal
appraisalsystem to measure performance, managers were simply told that they had to sitdown
with the individual members of their teams and have face-to-faceconversations on a regular
basis. Four years after implementing this system,Mallory's only regret is that SELCO didn't try it
sooner.
Today, managers just need to document that they have in fact had regularconversations with
their employees. If there are problems, managers are expectedto make note of it. This creates the
paper trail that will support any eventualdisciplinary action or termination. "We figure that we've
saved at least$350,000 in time spent alone," he says. "It doesn't mean that we'respending any less
time with the people. But it's time better spent. It'smanaging people differently, rather than
managing the paper flow."
Part of that difference is the assessment cycle. It used to be based on dateof hire, but Jane
Weizmann, senior consultant for Watson Wyatt Worldwide, saysit makes more sense to
synchronize it with the organization's business calendar."From the business's point of view, you
want to be sure that you line upyour needs with the employees' needs. And you want to make
sure that you definethe relationship between the two."
==================
4. III. Performance appraisal methods
1.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
i. Employees are ranked according to their performance
levels.
ii. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
i. The “whole man” is compared with another “whole man”
in this method. In practice, it is very difficult to compare
individuals possessing various individual traits.
ii. This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
iii. When a large number of employees are working, ranking
of individuals become a difficult issue.
iv. There is no systematic procedure for ranking individuals
in the organization. The ranking system does not eliminate
the possibility of snap judgements.
2. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages – Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages – Rater’s biases
5. 3. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages – economy, ease of administration, limited
training required, standardization. Disadvantages – Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings
4. Critical Incidents Method
The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages – Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages – Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.
5. Essay Method
6. In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage – It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.
6. Behaviorally Anchored Rating Scales
statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages – helps overcome rating
errors. Disadvantages – Suffers from distortions
inherent in most rating techniques.
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