performance appraisal

Performance Appraisal

Objectives Of The Session 13

• Definition of performance appraisal.

• Explanation the performance appraisal

system.

• Discussing the steps of evaluating staff

performance.

• Realizing the uses of staff performance

appraisal findings.

Steps in Evaluating Staff Performance

1. Establish performance standards for each position and the

criteria for evaluation

2. Establish performance evaluation policies

3. Have raters gather data on employee performance

4. Have raters (and employees in some systems) evaluate

employees’ performance Management by objectives

5. Discuss the evaluation with the employee

1. Establish performance standards for each position and the criteria for evaluation

SMART Method:

S-specific

M-measurable

A-agreed

R-realistic

T-timed

2. Establish performance evaluation policies on:

•When to rate?

_on / near the same date

•How often to rate?

_one evaluation in a year

_quarterly evaluations

•Who should rate?

Who Should Rate?

• a committee of several

superiors,

• peers (co-workers),

• employee’s

subordinates,

• Self-evaluation,

• someone outside the

immediate work

situation (seldom

used),

• Combination

3. Have raters gather data on employee performance

The raters collect information by:

• Observation

• analysis of data and records

• discussion with the employee

The data they gather are influenced by:

• criteria used for evaluation

• technique used for evaluation

Evaluation Techniques

• Individual Evaluation

Methods

• Multiple-Person Evaluation

Methods

Individual Evaluation Methods

Under the individual evaluation

methods of merit rating,

employees are evaluated one at a

time without comparing them with

other employees in the

organization.

Ind

ivid

ual

E

val

uat

ion

Met

hods

Graphic Rating Scales

Forced Choice Method

Essay Evaluation

Critical Incidence Method

Checklists

BARS

BOS

Graphic Rating-Scale Method

• Oldest and still most commonly used

method

• printed form

• variety of traits/a set of traits _

quantity and quality of work

-numeric

-alphabetic

A model of a graphic rating scale is given below:

• Table: Typical Graphic Rating Scale

• Employee Name...................

• Job title .................

• Department .........................

• Rate ...............

• Data ..................................

Quantity of work: Volume of work

under normal working conditions

Unsatisfactory

Fair Satisfactory Good Outstanding

Quality of work: Neatness, thoroughness

and accuracy of work Knowledge of job

A clear understanding of the factors

connected with the job

Attitude: Exhibits enthusiasm and

cooperativeness on the job

Dependability: Conscientious, thorough,

reliable, accurate, with respect to

attendance, reliefs, lunch breaks, etc.

Cooperation: Willingness and ability to

work with others to produce desired

goals.

Positive point in favor of the rating scale

•easy to understand

•easy to use

•permits a statistical tabulation of

scores of employees

Disadvantage of Graphic Rating Scale

•Arbitrary

•rating may be subjective

Forced-Choice Method

• to substitute graphic rating

scales

• a set of descriptive statements

Forced-Choice Method

• The primary purpose is to correct the

tendency of a rater to give consistently high

or low ratings to all the employees.

• several sets of pair phrases(two positive and

two negative)

Forced-Choice Method

• 1. Least Most

• A Does not anticipate difficulties A

• B Grasps explanations easily and quickly B

• C Does not waste time C

• D Very easy to talk to D

• 2. Least Most

• A Can be a leader A

• B Wastes time on unproductive things B

• C At all times, cool and calm C

• D Smart worker D

Essay Evaluation

• A trait approach to performance

appraisal that requires the rater to

describe the strong and weak aspects

of the employee behavior.

• normally used with a combination of

other methods(Graphic Rating

Scale),because…

Essay Evaluation

While preparing the essay on the employee,

the rater considers the following factors:

• Job knowledge and potential of the employee;

• Employee's understanding of the company's

programs, policies, objectives, etc.

• The employee's relations with co-workers and

superiors

• The employee's general planning, organizing and

controlling ability

• The attitudes and perceptions of the employee, in

general.

• a good deal of information

about employee

• reveals more about the evaluator

• highly subjective

• biased essay

• Sycophant employees

• poor writing essays

• time to prepare the essay

Critical Incident Technique

• Critical Incident: Unusual

event that denotes superior or

inferior employee performance

in some part of the job.

• A list statement: very effective

and ineffective performancs of

an employee

• the end of the rating period

Critical Incident Technique

Example of a good critical incident of a sales

assistant is the following:

July 20 – The sales clerk patiently attended to

the customers complaint. He is polite, prompt,

enthusiastic in solving the customers' problem.

Critical Incident Technique

On the other hand the bad critical incident

may appear as under:

• July 20 – The sales assistant stayed 45

minutes over on his break during the busiest

part of the day. He failed to answer the store

manager's call thrice. He is lazy, negligent,

stubborn and uninterested in work.

Advantages of Critical Incident Technique

• Less subjective/objective basis for

conducting a thorough discussion of an

employee's performance.

• avoids recency bias(most recent incidents

get too much emphasis)

Limitations of Critical Incident Technique

• Negative incidents may be more noticeable

than positive incidents

• It results in very close supervision which

may not be liked by the employee

• The recording of incidents may be forgotten.

• The supervisors have a tendency to unload a

series of complaints about incidents during

an annual performance review session.

• More time

Checklists and Weighted Checklists

• Simple

• a set of objectives or descriptive statements

• Listed traits( check, blank)

• The weighted list :

-more recent variation

-(Excellent to poor)

Some of the sample questions in the checklist:

Is the employee really interested in the task assigned?

Yes/No

Is he respected by his colleagues (co-workers)?

Yes/No

Does he give respect to his superiors?

Yes/No

Does he follow instructions properly?

Yes/No

Does he make mistakes frequently?

Yes/No

• The rater may be biased in distinguishing the

positive and negative questions.

• expensive and time consuming

• In spite of, the checklist method is most

frequently used

Behaviorally Anchored Rating Scale (BARS)

•Smith and Kendell

•Also known as Behavioral Expectations

Scale

•Combination of the rating scale and

critical incident techniques

Behaviorally Anchored Rating Scale (BARS)

• The BARS approach relies on the use of

critical incidents

• A BARS rating form usually contains 6 to 10

specifically defined performance

dimensions(both positive and negative).

• preferred

Example of (BARS) Performance Points Behavior

Extremely good 7 Can expect trainee to make valuable suggestions for increased

sales and to have positive relationships with customers all over

the country.

Good 6 Can expect to initiate creative ideas for improved sales.

Above average 5 Can expect to keep in touch with the customers throughout the

year.

Average 4 Can manage, with difficulty, to deliver the goods in time.

Below average 3 Can expect to unload the trucks when asked by the supervisor.

Poor 2 Can expect to inform only a part of the customers.

Extremely poor 1 Can expect to take extended coffee breaks and roam around

purposelessly.

Behavioral Observation Scales(BOS)

• Latham and associates

• uses the critical incident technique to

identify a series of behaviors that cover the

domain of the job.

Multiple Person Evaluation Techniques

• Multiple person evaluation techniques are

those methods when the performance of one

employee is directly and intentionally

compared with the performance of other

employee.

Mult

iple

Per

son E

val

uat

ion

Tec

hniq

ues

Ranking

Paired Comparison

Forced distribution

R a n k i n g

• the case when the superior is asked to rank

the subordinates based on some overall

criterion.

Paired Comparison

• several subordinates to be ranked

• Each employee is paired with every person

to be compared with

• better performing subordinate

• number of times that a person is chosen as

the better employee is tallied

• results are indexed based on this number.

Forced Distribution

• similar to grading on a curve

• fixed distribution of categories, such as

10% in low,

20% on low average,

40% in average,

20% in high average and

10% in high

Which evaluation technique

to use?

4.Have raters (and employees in some

systems) evaluate employees’ performance

Management by objectives

Management By Objective (MBO)

• Philosophy of management that rates

performance on the basis of employee

achievement of goals set by mutual

agreement of employee and manager.

(MBO)

• is more than just an evaluation program and

process

• a method by which managers and

subordinates plan, organize, control,

communicate and debate.

• a modern method

(MBO)

• The concept of MBO is actually the

outcome of the pioneering works of

Drucker, McGregor and Odiorne in

management science.

• Integrates performance and goal

setting

• Management by objectives can be

described as “a process whereby the

superior and subordinate managers of an

organization jointly identify its common

goals, define each individuals' major areas

of responsibility in terms of results expected

of him and use these measures as guides for

operating the unit and assessing the

contributions of each of its members”.

Advantages of MBO

• Employees Can Measure

Performance

• Quantifiable Goals

• Joint Effort

• Employee Satisfaction in

Participation

Disadvantages of MBO

• Easy to Set Unrealistic Goals

• Hard to Get Full Commitment to

Process

• Difficult to Define Some Goals

Potential Problems when Conducting Performance

Evaluations

1. Opposition to evaluation

2. System design and operating problems

3. Rater problems/Errors

4. Employee problems with performance

evaluations

Types of Rater Problems/Errors

1. Problems with the standards of evaluation

2. The Halo effect

3. Leniency or harshness/Strictness error

4. Central tendency error

5. Recency of events error

6. Contrast effects

7. Personal bias error

1.Problems with the standards of

evaluations :

• due to the perceptual differences in the

meaning of the words

• Statements with good qualifications

2.The Halo effect :

• based on an overall, general impression of

the ratee

3.Leniency or Harshness/Strictness Error:

• Performance-rating error in which the

appraiser tends to give employees either

unusually high or unusually low ratings.

• lenient raters

• harsh raters

4.Error of Central Tendency:

• Performance-rating error in which all

employees are rated about average.

• Reluctant to Give High/Low

• average ratings

5. Recency Error:

• Performance-rating error in which the

appraisal is based largely on the employee’s

most recent behavior rather than on behavior

throughout the appraisal period.

• Past behavior, Last Action

• Encourage Frequent Evaluation

6. Contrast effects :

• individual evaluation techniques

• in some cases only theory.

• For example,

average colleague , outstanding employee

7. Personal bias error :

• The tendency to rate the preferred employees

higher and those not preferred lower

Rating Errors Example

Halo Job Rating Scale

EXCELLENT

on all factors

Leniency Job Rating Scale

Employee A

EXCELLENT

Job Rating Scale

Employee B

EXCELLENT

Job Rating Scale

Employee C

SUPERIOR

Job Rating Scale

Employee D

EXCELLENT

Central

Tendency

Job Rating Scale

Employee A

AVERAGE

Job Rating Scale

Employee B

AVERAGE

Job Rating Scale

Employee C

AVERAGE

Job Rating Scale

Employee D

AVERAGE

Recency

Bias

Job rating scale behavior during the

last month has been POOR.

Rater Errors

Can be eliminated, or at least reduced:

•trainings for raters in order to develop their

ability to observe, recall and report

subordinate behavior lead to improvement of

employee evaluations

•using of new methods, such as BARS

Employee problems with performance evaluations

The most common problem:

• unfair evaluations

In order to avoid this perception:

• how difficult is the evaluation

• self evaluations

5. Discuss the evaluation with the employee

• evaluation interview (evaluation , objs )

• the employee development and salary action

discussions

Scheduling the Performance Appraisal

1. Schedule the interview and notify the

employee 10 to 14 days in advance.

2. Ask the employee to prepare for the

session by reviewing his or her

performance, job objectives, and

development goals.

3. Clearly state that this will be the formal

annual performance appraisal.

Appraisal Interviews

Three generally used approaches to these

interview situations:

– Tell-and-sell method

– Tell-and-listen method

– Problem-solving method (generally preferable)

depends mainly on the experience level of the employee.

The performance evaluation discussions

should include: • Review of overall progress

• Discussions of problems that were

encountered

• Agreement about potential performance

improvement possibilities

• Discussion how current performance is in

line with long term carrier goals

• Specific action plans for the coming year

Recommended Actions

At the end of the appraisal, the

evaluator/supervisor should recommend

any of the following actions: • Annual Increment

• No Increment

• Special Increment

• Promotion

• Removal

• Arrangement of training for employee’s further

improvement of the skill

Annual Increment:

• satisfactory performance

• one-step salary increment annually

No Increment:

• Unsatisfactory performance and for which

employee was warned and notified in written form

• manager should state the reasons for

recommending “no increment” or “withholding

annual increment”.

Special Increment:

• exceptional case

• outstanding performance ,if:

• criteria should be met

• evaluator/supervisor has

recommended so through the

performance appraisal

Criteria for Special performance increment

are the following:

• employee has demonstrated outstanding

performance and appraisal also reflects so;

• employee possesses strong personal traits for

successful performance;

• Rationales for special increment are given by the

supervisor(s)

Promotion:

All promotions shall be based on the following

criteria:

– Outstanding rating in all area of assessment,

contributed to achieve organizational objectives

and the supervisor/evaluator's justification.

– Employee possesses and high potential and

capabilities to undertake higher responsibilities;

– Employee possesses qualification, knowledge,

skills and attitude required for proposed

position;

– Vacancy is available.

Removal:

• sufficient ground

• previous reference

• Justification

• the organization must follow the procedures

Arrangement of training for employee’s further

improvement of the skill:

• Trainings

Reward/Punishment on Performance

Evaluation Results Special rewards for employee's outstanding

performance:

a) Special increment

b) Extraordinary bonus -financial incentive

c) Appreciation Letter -non-financial incentive

d) Overseas Tour -overseas relevant training

course/ workshops/ seminar

Negative Incentives for Poor Performers:

a) No promotion

b) Disciplinary action

may range from:

i. withholding of annual bonus

ii. annual increment

iii. termination.

Promotion

Promotion is given as recognition of :

• employee’s past performance

• future potentiality of carrying out

responsibilities in higher position

• based on merit and/or seniority

Basic Principles of Promotion:

• Cannot be claimed as a mater of right, one has to

earn it.

• In all matters relating to promotion the decision of

the Head of the organization should be final

• Not automatic. The completion of the requisite

number of years should entitle one to be considered

for promotion.

• Availability of vacancy or creation of new

positions when possible and necessary.

• On the basis of merit, performance and seniority of

the staff.

• Female staff should be given preference (to raise

the percentage up to 50%).

• The organization shall keep some positions reserve

for female staff.

• gender equality

• Three months observation period (for assessing

their performance in new position)

Below an example of an organization consideration for promotion to the next higher position as per the following:

Sl. Position Number of

years

Next position

1 Support staff (SS) –I 3 Support staff –II

2 Driver –I 3 Driver –II

3 Assistant Program Organizer (APO) 3 Senior Assistant/Program Organiser

4 Senior Assistant/Program Organizer 3 Assistant Manager/Assistant

Officer/Executive Assistant

5 Assistant Manager/Assistant

Officer/Executive Assistant

3 Deputy Manager/Deputy officer

6 Deputy Manager/Deputy officer 3 Manager/Officer

7 Manager/Officer 3 Deputy Senior Manager

8 Deputy Senior Manager 3 Senior Manager

9 Senior Manager 3 Assistant Director

10 Assistant Director 3 Deputy Director

11 Deputy Director 3 Director

12 Director 3 Deputy Head of the organization