Professional Documents
Culture Documents
Performance Appraisal
A process that identifies, evaluates and develops employee performance to meet employee and organisational goal.
It is not a process that happens once a year or every six months, but one that happens every day. It should focus solely on employee performance improvement.
mutual understanding between the manager and subordinates regarding job responsibilities, duties and standards
Appraising performance
Performance Appraisal
Feedback
Career planning
Other benefits
ADVANTAGES: Quantity and Quality of work can be assessed. Easy to use and permits tabulation of scores of employees. However, it suffers from being arbitrary as the ratings may be subjective.
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Rating scales are of two types: 1. Continuous rating scale Attitude Measurement Scale: Unsatisfactory Poor Fair Average Good Excellent 0 1 2 3 4 5
2. Discontinuous rating scale Attitude Measurement Scale: No Interest Indifferent Interested Enthusiastic
Ranks employees from best to worst on a particular trait. Employee who is the highest on the characteristic being measured and the one who is the lowest. [BEST ............. WORST] Then the next-highest, and the next-lowest. This becomes the benchmark for performance standard and its appraisal. ADVANTAGES Oldest and simplest form of rating. Easy and inexpensive. Suitable for dealing with small number of employees. However, its reliability and validity is doubtful due to the possibility of subjectivity.
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Paired Comparison
The appraiser ranks the employees by comparing one employee with all other employees in the group, one at a time. Ranks employees by listing all possible pairs of employees for each trait and indicating which is the better of each pair. For every trait (e.g. quantity of work, quality of work, etc.) every subordinate is paired with and compared to every other subordinate. ADVANTAGES: Help in yielding rank order of employees. Helps to make ranking method more precise and comprehensive. Data is more reliable and valid for performance standard appraisal. But time consuming and is applicable where number of employees are less.
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Paired Comparison
(+) means better than; (-) means worse than.
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Forced Distribution
This system is based on the assumption that all employees can be divided into five categories. [Outstanding, Above average, Average, Below Average and Poor. The rater is asked to place the percentage allocations across each of these ranges. The spread of distribution is represented through normal distribution curve. The main idea in this system is to spread ratings in a number of grades. This method is feasible for large group of employees. ADVANTAGES: Eliminates the room for subjective judgement on the part of supervisor. Easy to understand and administer.
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Forced Distribution
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Essay Description A written statement describing employees strengths, weaknesses, past performance and future development. Managers writes the descriptions of the employees by asking supervisors to enumerate specific examples of employee behaviour. ADVANTAGES It minimises supervisory bias and the halo effect. Depends on managers writing skills. However, biasness in writing may also occur. Limitation: Essays are not amenable for evaluation and analysis. Its time consuming and lethargic .
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Essay Description
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Critical Incident Examples of employee behaviour that illustrate effective or ineffective job performance. Incidents and employees performance are recorded. Manager then uses the record to assess the employees performance when it is time for PA. Keeping this record provides concrete examples of what the employees can do to eliminate any critical incident and performance deficiencies. Not helpful for comparing employees and making salary decisions.
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Critical Incident
Continuing Duties
Schedule production for plant
Targets
90% utilization of personnel and machinery in plant; orders delivered on time
Minimize inventory costs while keeping adequate supplies on hand
Critical Incidents
Instituted new production scheduling system; decreased late orders by 10% last month; increased machine utilization in plant by 20% last month
Let inventory storage costs rise 15% last month; overordered parts A and B by 20%; underordered part C by 30%
Supervise procurement of raw materials and inventory control Supervise machinery maintenance
No shutdowns due Instituted new preventative to faulty machinery maintenance system for plant; prevented a machine breakdown by discovering faulty part
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MBO
Setting specific measurable goals with employees and periodically reviewing the progress towards the goal. MBO refers to a comprehensive, organisation-wide goal-setting appraisal program, wherein the subordinates and superiors jointly set goals and periodically review the target with the achieved. MBO done away with the judgemental role of the superiors in the appraisal of their subordinates, thereby leading to greater satisfaction, agreement, greater comfort and less tension / hostility. It consists of six main steps: Set the organisation goal Set the departmental goal Discuss departmental goal Define expected result Performance review Provide feedback
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MBO - SMART
Specific
Time Frame
Measurable
MBO
Realistic
Achievable
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MBO Limitations
Applicable only when goal setting is possible by subordinates. Involves considerable time, energy and expenditure. This approach mainly emphasis counselling, training and development. But in practice, its not possible to forego the critical aspect of PA. Setting objectives with subordinates sometimes turns to a tug of war. MBO can be self defeating if it fails to take into consideration the deeper emotions of the employees.
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MBO - Problems
It is understood as a systematic collection of performance data on an individual or group, derived from a number of stake holders the stake holders being the immediate supervisors, team members, customers, peers and self. Anyone who has useful information on how an employee does the job may be the appraisers. It provides a broader perspective about an employee performance. By design, this appraisal is effective in identifying and measuring the interpersonal skills, customer satisfaction and team building skills. Limitations: Receiving feedback from multiple sources may be intimidating, time consuming and cumbersome in process.
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360-Degree Feedback
Many firms have expanded the idea of upward feedback into what they call 360-degree feedback.
Here, performance information is collected from all around, from employee, supervisor, subordinates, peers, internal and external customers.
The feedback is generally used for training and development, rather than for pay rises.
It is not an appraisal process, it is a performance appraisal feedback process.
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The Appraiser
Immediate Supervisor
Self-Rating
Peers
Potential Appraisers
Subordinates
Rating Committee
360-Degree Feedback
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Unclear Standards
Halo Effect
Central Tendency
Leniency or Strictness
Biasness
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Unclear Standard - Most of the appraisal scales are unclear. Standards and traits are interpreted differently by different people. Halo Effect When a supervisors rating of a subordinate on one trait biases the rating of all other traits. E.g. An unfriendly employee will often be rated unsatisfactory for all traits rather than just for that specific trait. Central Tendency Tendency to rate all employees the same way the middle of the rating scale; which is usually rating an average rating. Leniency or Strictness Tendency to rate all subordinates either high or low. Biasness Tendency to rate employees based on their differences on age, race, sex, background and other characteristics.
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Mutual trust and confidence. Reliability & validity Specific objectives Standardisation Training of appraisers Job Relatedness Time feedback to improve performance. Individual differences to be appreciated. Review of PA and appeal
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