Performance Appraisal and Job Evaluation

1. Performance Appraisal
and Job Evaluation
Course: MBA SEM 2
Subject: Human Resource
Management
Unit 3

2. Definition
Performance Appraisal is an objective
assessment of an individual’s performance
against well defined benchmarks.

3. Objectives
• To effect promotions based on competence
and performance.
• To asses the training and development
needs of employees.
• To decide upon a pay raise
• To let the employees know where they
stand.
• To improve communication
• To determine the effectiveness of HR
programes

4. Performance appraisal and
Competitive Advantage
• Improving Performance
• Making Correct Decisions
• Ensuring Legal Compliance
• Minimizing Job Dissatisfaction and Turnover
• Consistency Between Organisational
Strategy and Behaviour.
• Organisational Strategy and Performance
Appraisal

5. Methods of Appraisal
• Past oriented
• Future oriented

6. Past oriented
• Rating Scales
• Checklist
• Forced Choice Method
• Forced Distribution Method
• Critical Incidents Method
• Behaviorally Anchored Rating
Scales

7. • Field Review Method
• Performance Tests and
Observations
• Confidential Records
• Essay Method
• Cost Accounting Method
• Comparative Evaluation
Approaches

8. Ranking Method
Paired-Comparison Method

9. • 360 Degree Appraisal
• Psychological appraisals
• Assessment Centres
• MBO
Future Oriented

10. 360 Degree Feedback
• Multiple raters are involved
• Raters are supervisors, team members,
customers, peers and self.
• The technique is particularly helpful in
assessing soft skills.
• Measuring interpersonal skills, customer
satisfaction and team-building skills.
• Employees feel their customers more
accountable

11. Disadvantages:
• Receiving feedback on performance from
multiple sources can be intimidating.
• Time consuming for making questionnaires for
different group
• Multiple Raters are less adept to provide
balanced and objective feedback than the
supervisors.
• Biasness and Honesty can be the problem

12. Psychological Appraisals
• Focus on future potential and not actual
performance. Industrial psychologists are
employed for conducting the appraisal.
• In-depth interviews, psychological tests,
discussions with supervisors and a review of
other evaluations.
• Evaluation of employee’s intellectual, emotional,
motivational and other related characteristics
that suggest individual potential and may
predict future performance.

13. Disadvantages:
• This approach is slow and costly.
• Appraisal largely depends on the skills of the
psychologists.

14. Assessment Centers
• Evaluate managers over a period of time, say
one to three days.
• Assesses are requested to participate in in-
basket exercises, work groups( without leader),
computer simulations, role playing, etc
• The decision regarding the performance of each
assessee is based upon this discussion
observations.

15. • Typical assessment centre include
assertiveness, persuasive ability,
communicating ability, planning and
organizational ability, self-confidence,
resistance to stress, energy level, decision-
making, sensitivity to the feelings of others,
administrative ability, creativity, and mental
alertness.

16. Disadvantages:
• The problem with the assessment centres is their
cost.
• Influence by the interpersonal skills.
• Suffocation in the simulated environment.
• Employees may behave negatively due to the poor
reports.
• Strong and the unhealthy sense of competition
among the assesses, difficulty of conducting the
test frequently and the possibility of
overemphasizing the test performance.

17. Management by Objectives
• Peter F. Drucker who first gave the concept of
MBO to the world way back in 1954 when his
‘The Practice of Management’ was first
published.
• Four Steps in the MBO process
a) Establishing the goals
b) Setting the performance standard
c) Comparison of actual with desired
d) New goals and new strategies for goals not
previously attained.

18. Disadvantages:
• It is not applicable to all the jobs.
• Jobs with little or no flexibility, such as
assembly-line work, are not compatible with
MBO.

19. Errors in Performance Appraisal
• Spill over Effect
• Leniency
• Halo effect
• Primacy and Recency Effects
• Central tendency
• Status effect

20. Job Evaluation
• Job Evaluation seeks to determine the
relative worth of each job so that salary
differentials can be established. In job
evaluation only jobs are rated unlike in
performance appraisal where only job
holders are rated.

21. Importance of job evaluation
• Job evaluation assesses both the content
the value of a job. Job content refers to the
type of work performed and the skills and
knowledge necessary to perform the work.
• Work value refers to the job's degree of
contribution in meeting your organization's
goals and the degree of difficulty in filling the
job.

22. • Job evaluation can help remove anomalies
or inequalities in the payment system. It
helps in providing a more structured basis for
providing grading levels.
• Evaluations can be used to
- Clarify job descriptions so that employees
understand the expectations of their roles
and the relationship of their roles to other
jobs within the organization.
- Attract desirable job candidates.
- Retain high-potential employees.

23. • Evaluators assess jobs based on factors
such as Training level or qualifications
requirements, Knowledge and skills
requirements, Complexity of tasks,
Interaction with various levels of the
organization, Decision-making authority,
Degree of supervision required, Cross-
training requirements, Working conditions,
Degree of difficulty in filling job.

24. Job Evaluation
• The job is rated, keeping in
view such factors as
responsibility, qualification,
experience, working
conditions, etc. required for
performance of the job.
• A job is rated before the
employee is appointed to
occupy it.
• The purpose is to establish
satisfactory wage
differentials.
Performance Appraisal
• Employee is rated on the
basis of his or her
performance.
• Evaluation takes place after
the employee has been
hired and placed on a job.
• The purpose is to effect
promotions, offer reward,
award punishments, assess
training needs, resort to lay-
offs, transfers, etc

25. Job Evaluation
• It is not compulsory.
Many organizations carry
on without it. Where it is
followed, it is mainly for
lower level jobs.
• Job evaluation committee
(comprising internal and
external experts) is
constituted for the
purpose of evaluation.
Performance Appraisal
• Compulsory. It is done
regularly for all jobs.
• Appraisal is done by
employees themselves,
peer, superiors, group of
people, or combination of
these.

26. Bibliography
http://www.whatishumanresource.com
http://www.mbaofficial.com
Human Resource and Personnel
Management- K. Aswathappa, Tata
McGraw Hill