Various modern techniques of performance appraisal

1. MODERN TECHNIQUES OF
PERFORMANCE APPRAISAL

2. APPRAISAL BY MBO(mgmnt by objectives)
1. Given by Peter Drucker
2. A process whereby superior & subordinate managers jointly
identify common goals , defines each individual’s major areas of
responsibilities in terms of result expected of him & use these
measures as guidelines for assessing contribution of each
member.
3. Stresses on goals than methods.
4. Three foundations of MBO - goal setting, feedback &
participation.

3. OBJECTIVES OF MBO
1. To change the behaviour & attitude towards getting the job
done
2. To stress on goals rather than methods
3. To provide opportunities for participation in goal-setting
process
4. To involve subordinates in planning their own careers
5. To provide responsibility & accountability to employees
6. To recognise that employees have needs for achievement &
self-fulfillment

4. PROCESS OF MBO
1. Set organisational goals-wide strategy & goals
2. Joint goal setting-establishment of short- term performance
goals
3. Performance reviews-review meetings between managers &
subordinates
4. Set checkposts- to measure progress
5. Feedback- leads to higher motivation

5. Set organisational goals
Cascade objectives to
employees
Reward
performance
monitor

6. BENEFITS OF MBO
1. MBO helps to increase employee motivation
2. It can reduce internal conflicts-compete with themselves & not with
others
3. It is a means end chain
4. It provides more objective appraisal criteria
5. It identifies performance deficiencies
6. Identifies problems better and early
7. Forces and aids in planning
LIMITATIONS OF MBO
1. It is difficult to apply
2. It takes a great deal of time & energy
3. Sometimes a ‘tug of war’ in which subordinates try to set lowest targets
and subordinates the highest.

7. ASSESSMENT CENTRE METHOD
● Initially applied to military situations in German Army in
1930s & War Office Selection Board in British Army
in1960s.
● Tests candidates in various job related situations
● Many evaluators join together to judge employee
performance
● Exercises include: role play,business games,interviews etc.

8. FEATURES ASSESSMENT CENTRE METHOD
1. Uses situational exercises
2. Evaluators are drawn from experienced managers with proven
ability at different levels of mgmnt
3. Evaluates all employees ,both individually & collectively,and each
candidate is given one of the 3 categories : most acceptable,least
acceptable and unacceptable
4. Summary report is prepared by members,& feedback on a face-to-
face basis is administered.

9. PROCESS OF ASSESSMENT CENTRE METHOD
1. A leadership group is established,each member supporting a
predefined position(but group must arrive at consensus)
2. A task force is used with an appointed leader,who decides on
course of action
3. Simulation games & in- basket exercises are used to test
organisational & planning abilities
4. Oral reports made by candidate ,which tests his communication
skills
5. Personal interviews are used to assess motivation,career
orientation etc.
6. Paper-pencil tests measures intellectual ability

10. PROBLEMS OF ASSESSMENT CENTRE METHOD
1. Ratings are strongly influenced
2. Solid performers may not perform during exams
3. Bad effects on those not selected to participate
4. Employees who receive poor reports may react in -ve ways &
demoralises an employee who was once an asset

11. HUMAN RESOURCE/ASSETS ACCOUNTING METHOD
(HRA)
“The art of valuing ,recording and presenting systematically
the cost n value of employees to the organisation.”
● Refers to an activity denoted to attaching money estimate to
the value of a firm’s human organisation & its customer
goodwill
● Measures key causal variables(mgmnt
policies,decisions,leadership) & intervening
variables(loyalty,attitude,motivation)
● Not a very popular method

12. OBJECTIVES OF HRA METHOD
1. To facilitate the mgmnt to get information on cost & value of
human resources
2. To provide data of human resources & compare it with the
benefits obtained out of its utilization
3. To facilitate the efficiency of human resources
4. To treat human resources as assets

13. LIMITATIONS OF HRA METHOD
1. No proper clear-cut & specific procedure/guidelines for
finding cost & value of HR
2. Fear that HRA may dehumanise & manipulate employees
3. Tax laws do not recognise humans as assets
4. No universally accepted method for human valuation
5. Period of existence of human assets uncertain

14. BEHAVIOURALLY ANCHORED RATING SCALE (BARS)
A new appraisal technique,which supports the claim that it
provides better,more equitable appraisals. The procedure of
BARS is usually 5 stepped:
1. Generate critical incidents
2. Develop performance dimensions
3. Reallocate incidents
4. Scale of incidents (on 7 to 9 point scale)
5. Develop final instrument

15. ADVANTAGES OF BARS
Though BARS is more time-consuming and expensive,yet it
has many advantages
1. A more accurate gauge
2. Critical incidents may be more useful in providing feedbacks
3. Independent dimensions
4. The technique is not biased by experience & evaluation of
the rater

16. 360 DEGREE PERFORMANCE APPRAISAL
A system/process in which employees receive confidential,
anonymous feedback from people who work around them. The
inputs for the said appraisal are provided by subordinates,
peers , superiors,team members customers,suppliers and anyone
who comes in contact with the employee.
The responses from different raters are combined to have an
objective assessment of ratee’s performance & behaviours.
The feedback can be brutally frank but reliable & credible , having
less scope for individual bias/prejudice.

17. ADVANTAGES OF 360° PERFORMANCE
APPRAISAL
1. It is transparent and bias free
2. Employees get to know the perception about them from
other’s point of view
3. Employees get a ready list of improvement areas from their
customers
4. Employees get to know their good points which boosts their
self-esteem
5. Helps improve overall quality of staff

18. LIMITATIONS OF 360° PERFORMANCE APPRAISAL
1. System could prove to be complex in combining all responses
2. Some people fear retaliation if they -ve feedback
3. Feedback can be intimidating & cause resentment
4. Responses could be mutually conflicting & may not match
with others
5. Raters may require heavy doses of training to carry out the
exercise in impartial ,objective and systematic way
6. Anonymous feedback might encourage people to throw
brickbats or use the opportunity to settle past scores