performance appraisal final[1]

7/29/2019 Performance Appraisal FINAL[1]

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Performance appraisal


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Meaning & definition

Performance appraisal is a systematic

evaluation of individual with respect to

his/her performance on the job and his/herpotential for development.


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Need for performance appraisal

Identify developmental needs.

To plan training based on feedback

To recognize potential/promising employee.


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Components of performance appraisal

Who of appraisal

Immediate supervisors

Other supervisor

Peers or colleagues

Self

Subordinates

Personnel manager

External consultant


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What of appraisal

Human beings time frame

Personal traits

Achieved results

Specifics

Current performance


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When of appraisal

FormalAnnually

Semi annually

Quarterly

Informal

Weekly

Daily

Continuously


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Why of appraisal

Maintain workforce

Determine organizational training needs.

Determine personal development

opportunities.Basis for promotion, transfers etc..

Basis for pay increase & in recruitment,

selection.

Feedback & communication mechanism.


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Where of appraisal

on the job

Bosses office

Subordinates place of work

Everywhere

of the job

Consultants office

Social or recreational settings

Everywhere


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Benefits of performance appraisal

Human resource planning

Motivation & Satisfaction

Training & Development

Recruitment & Induction

Employee Evaluation

Legal Compliance


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Persons involved are-

Employees

Superior

Division head

Peers & colleagues

Why is it done?

A systematic presentation of roles &responsibilities of the position

To understand why the position is existing Helps in individual objective setting, performance

review & effectivenessmapping


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What is itused for?

Competency mapping Recruitment & transfer

Position evaluation

2) Performance

objective setting review

This module ensures that the corporate objectives arelaid down & individual objectives are simultaneously arelaid down in line with corporate goals. All this is done inthe form of dialogue between superior & the employee.


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Why is it done?

To fix objective & give weightage to it.

To review objectives

To determine the performance related pay &increment

To ensure that the objectives are also as may beapplicable for consumer, employee, finance &

processes.

To give overall performance rating.


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Process of Performance Appraisal

Step 1

Establish and communicate expectations

for performance.

List three to five major responsibilities of eachposition.

Focus the appraisal on these responsibilities.

Be sure employees know and understand what isexpected of them.

Employee are most likely to understand and becommitted to objectives theyhelped develop.

McGraw-Hill/Irwin 2006 The McGraw-Hill Companies, Inc. All rights reserved.


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Step 2

Establish and communicate standards for

measuring performance.

Each expectation should be measurable.A supervisors task includes decidinghowto

measure employees performance and then making

sure employees knowwhatwill be measured.

McGraw-Hill/Irwin 2006 The McGraw-Hill Companies, Inc. All rights reserved.17-14


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Step 3

Observe and measure individual

performance against standards.

A supervisor should continuously gatherinformation about each employees performance.

When preparing a performance appraisal, asupervisor compares this information with the

standards for the employee being appraised.



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Step 4

Reinforce performance or provide

remedies.

Point out to employees where they haveperformed well.

Asking an employee to help solve a problem isoften more effective than the supervisor simply

stating a remedy.



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Individual Evaluation Methods

Graphic rating scale

The rater is presented with a set of traits

The employee is rated on the traits

Ratings are assigned points, which are then computed

Raters are often asked to explain each rating with asentence or two


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Forced choice:

Was developed because graphic rating scales allowedsupervisors to rate everyone high

The rater must choose from a set of descriptivestatements about employee

Supervisors check the statements that describe theemployee, or they rank the statements from most toleast descriptive

Forced choice can be used by superiors, peers,subordinates, or a combination of these


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Essay Evaluation

The rater is asked to describe the strong and weak

aspects of the employees behaviorIt can be used by superiors, peers, or subordinates

Essay evaluations are flexible; an evaluator can

specifically address the ratees skill in any areaComparing essays is difficult

Skilled writers can paint a better picture


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Critical Incident Technique

Raters maintain a log of behavioral incidents that

represent effective and ineffective performance foreach employee

Two factors determine the success of this technique:

The supervisor must have enough time to observesubordinates during the evaluation period

The supervisor must record incidents as they are seen

Logs can help avoid common rating errors and

facilitate discussions about performance improvement


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Checklists

In its simplest form, the checklist is a set of objectivesor descriptive statements

If the rater believes that the employee possesses a listedtrait, the item is checked

A rating score equals the number of checks


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Behaviorally Anchored Rating Scales

Smith and Kendall developed the behaviorally

anchored rating scale (BARS), or the behavioralexpectation scale (BES)

The BARS approach uses critical incidents to anchorstatements on a scale

The rater reads the anchors and places an X at somepoint on the scale for the ratees

These scales rate employee performance in severalareas.

The supervisor selects the statement that bestdescribes how the employee performs.

Each job title in the organization has a different set ofrating statements.


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A BARS usually contains these features:

Six to 10 performance dimensions identified anddefined by raters and ratees

The dimensions are anchored with positive andnegative critical incidents

Each ratee is then rated on the dimensions

Ratings are fed back using the terms on the form

It takes two to four days to construct a BARS that is

jargon free and closely related to the requirements of the job


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Behavioral Observation Scales (BOS)

Developed by Latham and associates

Like BARS, the BOS uses critical incidents

Instead of identifying which behaviors occurred, therater identifies how they occurred

The hope was that BARS and BOS would yield moreobjective ratings than other scale formats

Most researchers find that the format of the rating scalehas little effect on the quality of a performance

appraisal system


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Work Standards Approach: A performance

appraisal in which the appraiser compares theemployees performance to objectivemeasures of what an employee should do.This type of appraisal requires the supervisor to

establish objective measures of performance.A typical work standard would be the quantity

produced by an assembly-line worker.

The supervisor then compares the employees actual

performance with the standards.This approach works best with production workers.


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Management by Objectives (MBO) In organizations where MBO is used to set goals and objectives for

employees, the supervisor will use this approach for performance

appraisal also. The appraisal is based on whether or not the employee has met his or

her objectives. The advantage is that employees know what to expect. The supervisor focuses on results rather than more subjective criteria.

The MBO approach emerged from the beliefs of McGregor,Drucker, and Odiorne

With MBO, managers and subordinates plan, organize, control,communicate, and debate

The subordinate has a course to follow and a target

to shoot for


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An MBO program follows a systematic

process:

Superior/subordinates define tasks and set objectives

The superior, consulting with subordinates, setscriteria for assessing objective accomplishment

Dates to review progress are agreed upon and usedSuperior and subordinates make any required

modifications in the original objectives

A final evaluation by the superior is madeThe superior meets with the subordinate in a

counseling, encouraging session

Objectives for the next cycle are set


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For MBO and other performance

management programs to work:

Both the manager and subordinate must be activelyinvolved in objective formulation

They must also agree on what measures will be usedto evaluate success and failure


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Agents by Someone Other than the

Supervisor

360-degree Feedback: Performance appraisal thatcombines assessment from several sources.

Because the supervisor cannot know all of an employees

behaviors and their impact on others in the organization, thesupervisor may combine his or her appraisal with self-assessments by the employee or with appraisals by peers orsubordinates. Combining several sources of appraisals is called 360-degree

feedback. The self-assessment may be done before the interview.

Then the supervisor and employee can compare the employeesappraisal with his or her own evaluation.


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Multiple-Person Evaluation

Methods

Ranking

A supervisor is asked to rank subordinates in order onsome overall criterion

It is easier to rank the best and worst employees thanaverage ones

Alternative rankingscan help with this difficulty

Pick the top employee first, then the bottom oneThe second best is chosen, then the second worst

Follow this process until everyone has been ranked


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Paired Comparison

The supervisor reviews a series of cards; each

contains two subordinates names

The higher performer in each pair is chosen

Final ranking is made by counting how many times a

given employee was chosen as the better performerA major limitation is the number of paired

comparisons that must be made


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Forced Distribution

Employees are rated on a pre-existing distribution of

pre-determined categoriesThe predetermined distribution must be followed,

regardless of how well the employees performed

A supervisor with all exceptional subordinates will beforced to rate some poorly

A supervisor with mediocre subordinates must ratesome highly

This technique is similar to grading on a curve


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Point allocation technique (PAT)

A variation of forced distributionEach rater is given a number of points per employee

The points must then be allocated on a criterion basis

The total number of points cannot exceed the numberof points per employee times the number ofemployees evaluated


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Which Technique to Use

The most commonly used evaluationtechniques:

The graphic rating scale

The essay method

Checklists

Used by about 5 percent of firms:

Forced choice, critical incident, BARS, BOS, fieldreview, MBO

Used by 10 to 13 percent of firms:

Ranking, paired comparison


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Balanced Scorecard

If we succeed, how willwe look to ourshareholders?

Financial Perspective

To achieve our vision,how must we look to our

customers?

Customer Perspective

To satisfy our customers,which processes must we

excel at?

Internal Perspective

To achieve our vision, howmust our organization learn

and improve?

Learning & GrowthPerspective

The Strategy


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Financial Perspective

In private companies, the financial perspective is themain objective (ultimate goal) without having to

sacrifice the interests of other relevant stakeholders

(community, environment, government, etc.)

In the financial perspective, the strategic goal is the

long-term shareholder value. This goal is driven by

two factors, namely : revenue growth and cost

efficiency.


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Customer Perspective

This perspective is very instrumental, because withoutcustomers, how can a company survive?

Customer perspective covers the following elements:

Customer acquisition Customer retention

Customer profitability

Market share

Customer satisfaction


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Internal Process Perspective

This perspective reflects the processes in key businessthat should be optimized in order to meet the needs of

the customers.

There are four main themes in this perspective, namely:

Operations Management Process

Customer Management Process

Innovation Process

Regulatory and Social Process


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Learning & Growth Perspective

This perspective reflects the capability that a companyshould have, namely:

Human Capital

Organization Capital Information Capital

This perspective shows us that good human resource

development system, organizational system and

information system forms a solid foundation for improving

company performance.


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The Appraisal Interview

The purpose of holding an appraisal interview isto communicate information about theemployees performance.

An interview is an appropriate setting because ifsets aside time to focus on and discuss theappraisal in private.

It is a two-way communication with thesupervisor and employee working together todevise ways to improve performance.


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Guidelines for Conducting the Interview

Begin the interview session by an attempt to put theemployee at ease. A refreshment and small talk may help break the ice.

Review the employees self-evaluation first, if there is one. Ask for reasons for the various ratings.

Then the supervisor describes his or her evaluation of the employee.

Start with an overall impression, then explain the contents of theappraisal forms.

Most employees are waiting for the bad news, so it is probably mosteffective to describe areas for improvement first.

Then describe the employees strengths.


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Allow time for the employee to respond to theperformance appraisal.

The employee should be allowed to agree ordisagree with the supervisors conclusions, as wellas to ask questions.

It is important for the supervisor to keep an open

mind and listen to the employee.After the interview is over, the supervisor continues

to appraise performance.

Training and coaching for improvement shouldensue.

The follow-up is an ongoing process.


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Guidelines for Assessing the

Effectiveness of an Interview

During the interview: To what extent did the supervisor really try to understand the employee?

Were broad and general questions used at the outset?

Was the supervisors feedback clear and specific?

Did the supervisor learn some new thingsparticularly about deepfeelings and values of the subordinate?

Did the subordinate disagree and confront the supervisor?

Did the interview end with mutual agreement and understanding aboutproblems and goals for improvement?

P f E l i


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Performance Evaluation

Problems

No technique is perfect;they all have limitations

Bi i A i i P f


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Bias in Appraising Performance

Performance appraisals should be free of bias,

but this is impossible.There are several identifiable biases in the

performance appraisals by supervisors.

Harshness Bias: Rating employees more severelythan their performance merits.

Leniency Bias: Rating employees more favorablythan their performance merits.

Proximity bias, or assigning similar scores to itemsthat are near each other on a questionnaire, canresult in misleading appraisals.


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Similarity Bias:Thetendency to judge others morepositively when they are like oneself.

The halo effect refers to the tendency to generalize one

positive or negative aspect of a person to the personsentire performance, resulting in either a higher or lowerrating than the employee deserves.


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Use of Performance Appraisals

_ Feedback

_ Personnel Training

_ Wage/Salary Allocation (Compensation) _ Placement

_ Promotions

_ Discharge/Termination

_ Personnel Research

_ Legal Defense

performance appraisal final[1]

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