Download - Performance Appraisal
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indexHistory
What is Performance Appraisal
Objectives
Performance Appraisal Process
Sources of Information
Methods of Performance Appraisal
Performance Criteria at different levels
Implementing Meaningful Performance Appraisals
Common Errors in Appraisal Process
Conclusion: Towards a better PA
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History
• Roots in the early 20th century
• The world's second oldest profession
• PA recognized by US government in 1950
• This became evident in the late 1980s
• The UK (consistent with Europe) Employment
Equality (Age) Regulations 2006, made PA
popular world wide
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Please Write a
One Sentence Definition of
Performance Management
A Twisty Task . . .
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“Researchers found that companies that used performance management programs had greater profits, better cash flow, stronger stock market performance, greater stock value and higher sales per employee (or productivity) than companies that didn’t.”
Quote
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“If people know what they are supposed to do, get feedback on how they are or are not doing it, and get rewarded for doing what they are supposed to be doing, companies will be more likely to get the results they desire.”
Quotes
“The function of work is to produce results.”
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WHAT IS PERFORMANCE?
• Job performance represents the
contribution that individuals make to the
organization that employs them.
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HOW IS PERFORMANCE MEASURED?
• The process of measuring what each
employee contributes, called
performance appraisal.
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Definitions
• “Any system of determining how well an
individual employee has performed during a
period of time, frequently used as a basis for
determining merit increases.”
• “OBSERVE and EVALUATE an employee’s
work in relation to PRE-SET performance
standards.”
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Definitions (contD…)
• Performance appraisal is the assessment of an individual’s performance in a systematic way( against well defined benchmarks). Assessment should not be confined to the past alone, potentials of the employee for future performance must also be assessed.
• Performance Appraisal (PA) refers to all those procedures that are used in a work activity to evaluate the personality performance potential of its group members.
• Performance Management System (PMS) is a process of establishing performance standards and evaluating performance in order to arrive at objective HR decisions and to provide documentation to support personnel actions.
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PA
Objectives
Documentation
Organizational
Maintenance
Promotions
Training and
development
Pay scales & Pay raise
Constructive
criticism and
guidance
Administrativeuses
HR programs
Communication
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Performance appraisal Process
Measurement Of Actual
Performance
Compare Actual Prfmnce With Prfmnce Stds
Initiate Corrective
Actions-if any
Establish Performance Standards
Communicate Performance Expectations
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THREE AND ONE • WHO ?
SUPERVISORS DO EVALUATIONS
• WHAT ?
COMPLETION OF JOB TASKS
• WHEN ?
NEW EMPLOYEES; 3-6 MONTHS
• HOW ?
WITH SPECIAL CARE & RESPECT
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The different sources of appraisal
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Sources of Information
1) Supervisors (most common)
• Role Conflict (e.g., judge and trainer/teacher)
• Motivation
• Time availability
• Friendship
2) Co-Workers (Peers)
• Friendship bias
• Leniency
• High level of accuracy
• Best used as a source of feedback
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Sources of Information (contd…)
3) Self
• Lots of knowledge
• Leniency effect
• Good preparation for performance appraisal
meeting (conducive for dialog)
4) Subordinates
• Biases (e.g., view of subordinates, type of job,
expected evaluation from supervisor)
5) Client
• Good source of feedback
• Negativity bias
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Methods Of Appraisal
Traditional Methods
1. Rating Scale2. Checklist3. Forced Choice4. Forced Distribution5. Confidential Reports
(ACRs)6. Critical Incident
Method7. Essay Method.
Modern Methods
1. Written essay2. Critical incidents3. Graphic rating scales4. Behaviourally Anchored
Rating Scale5. Multi-person6. 360 Degree Application
system7. Mgmt By Objectives
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Individual vs. Team Appraisal
• Most of the performance appraisals are done on an individual basis. However, modern day organizations have brought the idea of team appraisals to evaluate the performance of a team as a whole instead of appraising performance of individual employees.
• This development is due to the fact that organizations are assigning work to teams rather than individuals.
• Companies following TQM principles follow team appraisals as TQM sets for the team assignment of the work rather than individual assignments.
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Performance Appraisal Methods
• Individual Evaluation Methods
– Confidential report
– Essay evaluation
– Critical incidents
– Checklists
– Graphic rating scale
– Behaviorally anchored rating scale
– MBO
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confidential report
• Evaluation of Characteristics e.g. loyalty, potential,
attendance
• Traditional Method
• Prepared without employee’s notice
• Performance briefing in different criteria on a
regular basis
• Characteristics should be easily understandable
• Rating scale of report should be maintained as a
qualitative reporting
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Essay Method
Employee is described in a number of
broad categories like:
• Overall impression
• Strengths and weakness
The strength of this method lies in the
writing skills and analytical skills of the
rater.
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Critical Incident method
Ex: A fire, sudden breakdown, accident
Workers Reaction Scale
A informed the supervisor immediately 5
B Become anxious on loss of output 4
C tried to repair the machine 3
D Complained for poor maintenance 2
E was happy to forced test 1
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Checklist method
•Simple checklist method
•Weighted checklist method
•Forced choice method
Simple checklist method:
Is employee regular Y/N
Is employee respected by subordinate Y/N
Is employee helpful Y/N
Does he follow instruction Y/N
Does he keep the equipment in order Y/N
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Weighted checklist method
weights performance rating
(scale 1 to 5 )
Regularity 0.5
Loyalty 1.5
Willing to help 1.5
Quality of work 1.5
Relationship 2.0
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Forced choice method
Criteria Rating
1.Regularity on the job Most Least
•Always regular
•Inform in advance for delay
•Never regular
•Remain absent
•Neither regular nor irregular
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Graphic Rating Scale
• Continuous Rating Scale
• Discontinuous Rating Scale
Employee name_________ Deptt_______
Rater’s name ___________ Date________
------------------------------------------------------------------------
Exc. Good Acceptable Fair Poor
5 4 3 2 1 _
Dependability
Initiative
Overall output
Attendance
Attitude
Cooperation
Total score Continuous Rating Scale
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Discontinuous Rating Scale
Attitude
No
Interest
Indifferent
Interested
Enthusiastic
Very
enthusiastic
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BARS( Behaviorally Anchored rating scale)
Step 1. Identify critical incidents
Step 2. Select performance dimension
Step 3. Retranslate the incidents
Step 4. Assign scales to incidents
Step 5. Develop final instrument
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MBO Process
• Set organizational goals
• Defining performance target
• Performance review
• Feedback
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Management By Objectives
• “Management by Objectives (MBO) is a
process of agreeing upon objectives within
an organization so that management and
employees agree to the objectives,
understand what they are, and work hand-to-
hand towards the achievement of the set
objectives.”
• Setting goal is difficult in MBO.
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Management By Objectives (MBO)
contd…
• evaluate employee job performance in
terms of the extent to which the employee
achieved each of his or her goals during a
specified period of time
– Goals can be both objective and subjective
– Commonly used for managers and
professionals
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Five step MBO process
Organizational
Objectives
Reviewed
Set Employee Objectives
Progress
Monitored
Performance
Evaluated
Achievers
Rewarded
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Current Global Trends in PA
• Trend towards a 360-Degree feedback
system
• Problems in implementation are anticipated
and efforts are being made to overcome
them
• Team Performance Appraisal
• Rank and Yank Strategy
• TQM an Performance Appraisal
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Challenges
• Determining the evaluation
criteria
• Lack of competence
• Errors in rating and evaluation
• Resistance
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–Ranking
–Paired comparison
–Forced distribution
–Performance tests field review
technique
–360º performance appraisal
Group Appraisal
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Ranking method
Employee Rank
A 2
B 1
C 3
D 5
E 4
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Paired comparison method
A B C D E Final Rank
A - - - + + 3
B + - - + + 2
C + + - + + 1
D - - - - + 4
E - - - - - 5
No of Positive evaluation = employee superior evaluation
Total no. of evaluation * 100
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Forced Distribution method
10% 20% 40% 20% 10%
poor below
average
average good excellent
No.
of
employees
Completion of work
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Field review method
Performance subordinate peers superior customer
Dimension
Leadership ^ ^
Communication ^ ^
Interpersonal skills ^ ^
Decision making ^ ^ ^
Technical skills ^ ^ ^
Motivation ^ ^ ^
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360º PERFORMANCE
APPRAISAL
A developmental and/or performance
appraisal tool which utilizes multiple-source
feedback from people who work most closely
with the employee.
It is also known as multi-rate feedback, multi-
source feedback & multi-source assessment.
It is done either by interview method or
questionnaire.
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Who Does 360º PA?
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Why to use 360º PA?
It provides the individual with an opportunity
to learn how different colleagues perceive
them, leading to increase self-awareness.
It encourages self-development.
It increases understanding of the behaviours
required to improve personal and
organisational effectiveness.
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Contd…
It promotes a more open culture where
giving and receiving feedback is an
accepted norm.
It increases communication within the
organisation.
It can be a powerful trigger for change.
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How to implement 360º PA?
EXPLAIN THE
PUROSE OF
THE PROCESS
DEFINE SKILL
MODEL
DISCUSS
WITH
EMPLOYEE
PROVIDE FEED
BACK
PROCESS
QUESTIONNARI
ES
COMPLETE
QUESTIONNAI
RES
DISTRIBUTE
QUESTIONNAR
IES
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Performance Appraisal MethodsMethod Advantage Disadvantage
Written essay
Simple to use More a measure of evaluator’s writing ability than of employee’s actual performance
Critical incidents
Rich egs behaviorally based
Time consuming; lack quantification
Graphic rating scales
Provide quantitative data; less time-consuming than others
Do not provide depth of job behavior assessed
BARS Focus on specific n measurable job behaviors
Time consuming; diff to dev measures
Multi-person compares employees with one another
Unwieldy with large no. of employees
MBO Focuses on end goals; results oriented
Time consuming
360° apprisl More thorough Time consuming
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Performance criteria for executives
• For top managers
–Return on capital employed
–Contribution to community
development
–Degree of upward communication
from middle-level executives
–Degree of growth and expansion of
enterprise.
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For middle level managers
• Departmental performance
• Coordination among employees
• Degree of upward communication
from supervisors
• Degree of clarity about corporate
goals and policies
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For supervisors
• Quality and quantity of output in a given period
• Labor cost per unit of output in a given period
• Material cost per unit in a given period
• Rate of absenteeism and turnover of employees
• No of accidents in a given period
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Implementing Meaningful
Performance Appraisals
I. Gather documentation
II. Develop the written appraisal
III. Conduct the appraisal interview session
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Implementing Meaningful
Performance Appraisals (cont’d)I. Gather Documentation
a) Personal observationObserve actual performance and judge results
b) Feedback documentationUse performance notes made throughout the year
c) Personnel FileExamine past performance reviews, discipline records, and awards
d) Measurement toolsCheck documents that support performance rating. Examples: Time clock reports for attendance and tardiness, etc.
e) Others’ observationsReview supervisor, manager, co-worker comments
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Implementing Meaningful
Performance Appraisals (cont’d)II. Develop Appraisal Guidelines for writing appraisals
a) Set aside dedicated timeGather performance documentation and eliminate interruptions
b) Evaluate performance based on expectationsReview established expectations, job description, performance goals
c) Rate how well expectations were met
d) Give honest ratingsAcknowledge strengths and address ongoing problems
e) Provide specific examplesAvoid generalities, note specific contributions and accomplishments
f) Avoid personal and subjective statementsNo exaggerations, no character attacks
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Implementing Meaningful
Performance Appraisals (cont’d)
III. Conducting the Appraisal Interview session
– Common Mistakes
a) Manager is ill-prepared
b) Employee is not given adequate notice
c) Discussion is rushed or interrupted
d) Employee is not given the opportunity to
comment
e) Manager’s tone is punitive or condescending
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Implementing Meaningful Performance Appraisals
(cont’d)
III. Conducting the Appraisal Interview session- Maximizing the review
1) Be prepared
o Determine discussion direction
o Anticipate objectives
o Gather supportive documentation
2) Set the right tone
o Establish a supportive environment
o Private location – Maintain confidentiality
o Quiet and undisturbed – eliminate distractions
o Level playing field – Avoid superiority
o Timing – choose a quiet time
o Demonstrate Respect
o Timeliness – Conduct reviews by due date
o Appointments – Don’t act like the employee’s time is less valuable
o Advance notice – Allow the employee to be prepared
o Icebreaker – Start on a friendly and relaxed note
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Implementing Meaningful
Performance Appraisals (cont’d)III. Conducting the Appraisal Interview session
- Maximizing the review
o Have the best mindset
o Tone – Professional and supportive
o Focus – Future goals and objectives
o Open-mindedness – Seek explanations
o Emotions – Calm and centered
3) Communicate Effectively
– Avoid communication roadblocks – Vague, evasive,
derisive or derogatory language, poor listening skills,
strong emotions, one-way conversation
– Improve communication skills – be clear and concise,
be honest, not brutal, be an active listener and natural
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Appraisal Interviews
Following points are to be noted while
conducting appraisal interviews:
1. Place the employee at ease with small talk.
2. Allow the employee to share his/ her perspectives before
you share yours.
3. Be positive and use action oriented behavioral terms.
4. Use specific and measurable expressions.
5. Avoid comparing the employee to yourself or others.
6. Balance negatives with positives; start with a positive.
7. Spend time planning for improvement.
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During the Appraisal Process:
Interview
IV. Potential Emotional Reactions
a) Emotional Distress
b) Hostility
c) Defensiveness
d) Denial
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During the Appraisal Process:
Interview
IV. Potential Emotional Reactions
a) Emotional Distress - employee becomes tearful
or angry, but not aggressive
o How can you handle it?
o Be patient
o Offer privacy
o Suggest rescheduling
o Other ideas?
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During the Appraisal Process:
Interview
IV. Potential Emotional Reactions
b) Hostility - employee channels his/her
emotions into aggression
o How can you handle it?
o Be patient
o Offer privacy
o Suggest rescheduling
o Other ideas?
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During the Appraisal Process:
Interview
IV. Potential Emotional Reactions
c) Defensiveness - employee makes
excuses
o How can you handle it?
– Listen objectively
– Be compassionate
– Reinforce expectations
– Other Ideas?
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During the Appraisal Process:
Interview
IV. Potential Emotional Reactions
d) Denial - employee insists your evaluation is
incorrect
o How can you handle it?
– Listen objectively
– Investigate as necessary
– Provide supportive documentation
– Other ideas?
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Giving Employee Feedback
1. Focus comments on the task rather than the
person.
2. Combine feedback with goals for
improvement.
3. Describe behaviors in an unemotional manner.
4. Focus on what is observed rather than
underlying causes.
5. Remain nonjudgmental.
6. Provide clear examples to support points.
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Common
Errors in the
Appraisal
Process
Halo Error/Horn Error
Appraiser
discomfort
Lack of objectivity
Leniency /
Strictness
Recent behavior
bias
Central Tendency
Employee anxiety
Personal bias
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Halo / Horn Error
• Halo error - Occurs when manager
generalizes one positive performance
feature or incident to all aspects of
employee performance resulting in
higher rating
• Horn error - Evaluation error occurs
when manager generalizes one
negative performance feature or
incident to all aspects of employee
performance resulting in lower rating
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Appraiser Discomfort
• Performance appraisal process cuts into manager’s time
• Experience can be unpleasant when employee has not performed well
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Lack of Objectivity
• In rating scales method, commonly used factors such as attitude, appearance, and personality are difficult to measure
• Factors may have little to do with employee’s job performance
• Employee appraisal based primarily on personal characteristics may place evaluator and company in untenable positions
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Leniency / Strictness
• Leniency - Giving undeserved high ratings
• Strictness - Being unduly critical of employee’s work performance
• Worst situation is when firm has both lenient and strict managers and does nothing to level inequities
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Recent Behavior Bias
• Employee’s behavior often improves and
productivity tends to rise several days or
weeks before scheduled evaluation
• Only natural for rater to remember recent
behavior more clearly than actions from
more distant past
• Maintaining records of performance
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Employee Anxiety
• Evaluation process may
create anxiety for
appraised employee
• Opportunities for
promotion, better work
assignments, and
increased compensation
may hinge on results
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Central Tendency
• Error occurs when employees are
incorrectly rated near average or middle of
scale
• May be encouraged by some rating scale
systems requiring evaluator to justify in
writing extremely high or extremely low
ratings
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Personal Bias (Stereotyping)
• Managers allow individual differences such as gender, race or age to affect ratings they give
• Effects of cultural bias, or stereotyping, can influence appraisals
• Other factors – Example: mild-mannered employees may be appraised more harshly simply because they do not seriously object to results
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Reasons Appraisal Programs Sometimes Fail
Lack of top-management information and support
Unclear performance standards
Rater bias
Too many forms to complete
Inadequate preparation on the part of the manager
Employee is not given clear objectives at the beginning of
performance period
Overemphasis on uncharacteristic performance
Organizational politics or personal relationships judgments
Manager may not be trained at evaluation or giving feedback
No follow-up and coaching after the evaluation
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Improve Appraisal Formats
Select the Right Raters
Understand Why Raters Make
Mistakes
Strategies to Better Understand
and Measure Job Performance
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Training Raters to Rate More
Accurately
Rater-error training to reduce psychometric
errors
Performance dimension training
Performance-standard training
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1) Ensure that procedures for personnel decisions do not differ as a
function of the race, sex, national origin, religion, or age of those
affected by such decisions.
2) Use objective and uncontaminated data whenever they are
available.
3) Provide a formal system of review or appeal to resolve
disagreements regarding appraisals.
4) Use more than one independent evaluator of performance.
5) Use a formal, standardized system for personnel decisions.
6) Ensure that evaluators have ample opportunity to observe and rate
performance if ratings must be made.
7) Avoid ratings on traits such as dependability, drive, aptitude, or
attitude.
8) Provide documented performance counseling prior to
performance,-based termination decisions.
Prescriptions for Legally Defensible
Appraisal Systems
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Thanks for your attention
The End