4. Performance Appraisal

8/7/2019 4. Performance Appraisal

1/49

PERFORMANCE APPRAISAL

UNIT 3


2/49

Portions to be covered Performance appraisal:

Purpose- - appraisal process

methods of performance appraisal coaching mentoring errors inappraisal process. Job evaluation methods of job evaluation.


3/49

PERFORMANCE APPRAISAL -

PURPOSE Performance Evaluation or Appraisal is the

process of deciding how employees do theirjobs.

It is a systematic and objective way ofevaluating both work-related behaviour andpotential of employees.

It is a process that involves determiningand communicating to an employee how heor she is performing the job and ideally,establishing a plan of improvement.


4/49

Purpose / Objectives Compensation decisions

Promotion decisions

Formulating Training anddevelopment programmes

Feedback

Personal development


5/49

Methods of Performance Appraisal

Individual

Evaluation Methods

Multiple-person

Evaluation Methods Other Methods

Confidential Report

Essay Evaluation

Critical Incidents

Checklists

Graphic Rating Scale Behaviorally Anchored

Rating Scales

Forced Choice Method

MBO

Ranking

Paired Comparison

Forced Distribution

Group Appraisal

Human Resource

Accounting

Assessment Centre Field Review

Technique

360-Degree

Feedback

METHODS OF PERFORMANCE

APPRAISAL


6/49

Confidential Report mostly used ingovernment organizations- descriptive

report by immediate superior - highlightsthe strengths and weaknesses of thesubordinate - does not offer any feedbackto the appraisee.

Essay Evaluation rater is asked toexpress the strong as well as weak pointsof the employees behaviour - highlysubjective -supervisor may write a biased

essay - may be poor in writing essays -busy appraiser may write the essayhurriedly


7/49

Critical Incident Technique managerprepares lists of statements of veryeffective and ineffective behaviour of an

employee- maintains logs on eachemployee - records critical incidents of theworkers behaviour - objective basis -negative incidents may be more noticeablethan positive incidents.

Checklists a checklist is a set ofobjectives or descriptive statements aboutthe employee and his behaviour. If therater believes strongly that the employeepossesses a particular listed trait, he

checks the item, and otherwise, he leavesthe item blank - weighted list-rater may bebiased - expensive and time consuming -difficult for the manager


8/49

Graphic Rating Scale a printed form isused - A variety of traits may be used inthese types of rating devices, the mostcommon being the quantity and quality ofwork - easy to understand, easy to useand permits a statistical tabulation ofscores of employees - suffers from beingarbitrary and the rating may be subjective.

Behaviorally Anchored Rating Scales It is a combination of the rating scale andcritical incident techniques - A specificdeficiency is that the behaviors used areactivity oriented rather than results

oriented-problem for supervisors whomaybe be forced to deal with employeeswho are performing the activity but notaccomplishing the desired goals.[BARS]


9/49

Forced Choice Method primary purposeis to correct the tendency of a rater to giveconsistently high or low ratings to all theemployees checklist of 2 pair statementstwo of which may be positive and twonegative and the rater is asked to indicatewhich of the four phrases is the most and

least descriptive of a particular worker- astrong limitation is trained technicians areneeded- very expensive - managers mayfeel frustrated - The results of the forcedchoice method may not be useful for

training employees because the raterhimself does not know how he isevaluating the worker.


10/49

Eg. Regularity:

Always regular

Informs in advance for absence / delay Never regular

Remains absent without proper notice

Neither regular / irregular.


11/49

Management By Objectives(MBO) a process whereby the

superior and subordinate managersof an organization jointly identify itscommon goals, define eachindividuals major areas of

responsibility in terms of resultsexpected of him and use thesemeasures as guides for operating theunit and assessing the contributions

of each of its members. It sets goalsthat are tangible, verifiable andmeasurable.


12/49

MBO STEPS

Set Organisations goals

Set dept goals dept heads + superiors

Discuss depts goals with subordinates todevelop individual goals

Define exp results / set individual goals

Performance reviews with exp results

Provide feedback.


13/49

MBO Advantages no bias self appraisal

greater satisfaction less tension moreclarity emphasizes trng & devlp needs

know stds of performance.

Defects not possible by blue collarworkers time consuming needscounselling, trg & devp requires proper

job description, trust in subordinates


14/49

Multiple-person Evaluation

Methods

Ranking Method: the ranking of an employeein a work group is done against that ofanother employee. The relative position ofeach employee is tested in terms of his

numerical rank according to their levels ofperformance -overall criterion-it is verydifficult to rank the average employees. -limitations are- very difficult of compareindividuals possessing varied Behaviouraltraits - speaks only of the position in his groupand does not how much better or how muchworse an employee is when compared toanother employee.


15/49

Paired Comparison Each worker is compared with all

other employees in the group. For

several individual traits, pairedcomparisons are made, tabulatedand then rank is assigned to eachworker. Though this method seems

to be logical, it is not applicable whena group is large. More reliable thanstraight ranking.


16/49

Forced Distribution Method The rater is asked to appraise the employee

according to a predetermined distributionscale to eliminate bias avoide placingworkers at a higher or lower end of the scale.Normally, the two criteria used here for ratingare the job performance and promotability. Afive-point performance scale is used withoutany mention of descriptive statements.Workers are placed between the two extremesof good and bad performances - may resultin low morale, low productivity and highabsenteeism- lower grade employees feelfrustrated and exhibit reluctance to work.


17/49

10%

40%

20%

10%20%

Poor Below Avg Average Good Excellent

Forced Distribution Method


18/49

OTHER METHODS Group Appraisal appraisal by a group -

consists of the immediate supervisor and othersupervisors who have close contact with theemployees work, - The immediate supervisor

enlightens other members about the jobcharacteristics, demands, standards orperformance etc. Then the group appraisesthe performance , compares the actualperformance with standards, finds deviations,discusses the reasons , suggests ways for

improvement of performance, prepares anaction plan, studies the need for change in thejob analysis and standards and recommendschanges, if necessary. This method eliminatespersonal bias to a large extent, asperformance is evaluated by multiple rates.But it is very time consuming process.


19/49

Human Re

source Accounting

HRA is a sophisticated way to measure (in financialterms) the effectiveness of personnel managementactivities and the use of people in an organization. Itis the process of accounting for people as an

organizational resource. It tries to place a value onorganizational human resources as assets and not asexpenses. The HRA process shows the investmentthe organization makes in its people and how thevalue of these people changes over time. The valueof employees is increased by investments made by

the company to improve the quality of its humanresources such as training, development skillsacquired by employees over a period of time throughexperience, etc.


20/49

Ass

ess

ment Centre A system where various experts using various

techniques do assessment of several individuals-techniques include the methods discussed above, inaddition to in-basket, role-playing, case studies,

simulation exercises etc - individuals from variousdepartments are brought together to spend two orthree days working on an individual or groupassignment similar to the ones they would behandling when promoted. Observers rank theperformance of each and every participant in order of

merit - excellent means for conducting evaluationprocesses in an objective way - people chosen bythis method prove better than those chosen by othermethods.


21/49

demerits Time consuming evaluated based

more on social skills negative

feedback demoralizes unhealthycompetition among employees difficult to conduct .


22/49

Field Re

view Method

A trained, skilled representative of the HRdepartment goes into the field andinterviews line supervisors with theirratings of their respective subordinates.The HR specialist requests specificinformation about the employeesperformance. Based on this information,the expert prepares a report which is sentto the supervisor for review, changes,

approval and discussion with the employeewho is being rated. The ratings are doneon standardized forms.


23/49

360-Degree

Feedback Sy

stem

This method collects performanceinformation about a particular employeefrom all those people with whom theconcerned employee interacts during hisperformance of work - employee himself,superior, team members, peers,subordinates and customers. It is apowerful developmental method anddifferent from superior-sub-ordinate

appraisal. The feedback received frommultiple raters is helpful in assessing theappraisee without any biases.


24/49

PROBLEMS WITH PERFORMANCE

APPRAISAL mistakes while evaluating people and their

performance. Biases and judgment errors ofvarious kinds may spoil the show.

forms that are used by raters like, rating scale

may be quite vague and unclear, the ratingform may ignore important aspects of jobperformance, rating from may containadditional, irrelevant performance dimensionsand forms may be too long and complex.

The raters may not be adequately trained to

carry out performance management activities. If the sincere appraisal effort put in by a rater

is not suitably rewarded, the motivation to dothe job thoroughly finishes off.


25/49

Errors in the appraisal process

Leniency error rating too high or too low - positiveleniency error and negative leniency error based on

own value system and interpretations proper trng req

to avoid this.

Halo error tendency to evaluate on the basis of onetrait not overall performance controlled when list of

characteristics is given and asked to evaluate

Similarity error-evaluator basis his own trait for

assessing employees can be adj if same rater rates allemployees.

Error of central tendency not sure of performance

less time playing safe by rating average distorts

evaluation useless for decision making.


26/49

Essentials of an effective appraisal

system Mutual trust & confidence

Reliability

Validity

Specific objectives Standardization

Training to appraisers

Job relatedness

Feedback

Individual difference Post appraisal interview

Review & appeal


27/49

Coaching & Mentoring Coaching is the support for technical,

skills-related learning and growth - isfocused on learning job-related skills and

the coaching is provided by a professionalcolleague.

Mentoring is a power free, two-waymutually beneficial learning situation wherethe mentor provides advice, shares

knowledge and experiences, and teachesusing a low pressure, self-discoveryapproach.


28/49

Focus Mentors in either a formal mentoring

program or informal relationship

focus on the person, their career andsupport for individual growth andmaturity.

The coach is job-focused and

performance oriented


29/49

Focus A mentor is like a sounding board, they can

give advice but the partners is free to pickand choose what they do. The context does

not have specific performance objectives. A coach is trying to direct a person to some

end result, the person may choose how toget there, but the coach is strategically

assessing and monitoring the progress andgiving advice for effectiveness andefficiency."


30/49

Role Mentors are facilitators and teachers

allowing the partners to discover their

own direction. A coach has a set agenda to reinforce

or change skills and behaviors. Thecoach has an objective/goals for each

discussion


31/49

Relationship

Self-selection [choosing] is the rule ininformal mentoring relationships withthe partners initiating and actively

maintaining the relationship. In an organization your coach hired

you. Coaching comes with the job, ajob expectation, in someorganizations a defined competencyfor managers and leaders.


32/49

Return

The coachs returns are in the form ofmore team harmony, and job

performance. The mentoring relationship is

reciprocal. There is a learning processfor the mentor from the feedback and

insights of the partners


33/49

Conclusion Coaching & mentoring, both of which

focus on the individual, can enhance

morale, motivation and productivityand reduce staff turnover asindividuals feel valued and connectedwith both small and large

organisational changes.


34/49

JOBEVALUATION

Every organisation needs to know therelative worth of jobs. Job Evaluationcompares jobs to assess their relative

worth for the purpose of establishinga rational pay structure.

Job Evaluation begins with jobanalysis and ends at that point wherethe worth of a job is ascertained forachieving pay equity between jobs.


35/49

Definitions

Job Evaluation is a systematic and orderlyprocess of determining the worth of a job inrelation to other jobs.

Edwin B Flippo Job Evaluation is a process of determining

the relative value of various jobs within theorganisation so that differential wages may

be paid to the jobs of different worthWendell French


36/49

Difference between Job Evaluationand Performance Appraisal

Job Evaluation1. It finds the relativeworth of a Job 2. Determines wagerates for different jobs 3. It shows

how much a job is worth. Performance Appraisal1. It finds the

worth of a job holder2. Determineincentives and rewards for superiorperformance.3. It shows how well anindividual is doing an assigned work.


37/49

Job Evaluation Methods

Ranking method

Classification method

Factor Comparison method Point method


38/49

Ranking method

Jobs are arranged from highest to lowest,in order of their value or merit or accdng tothe relative difficulty in performing them.

Jobs are usually ranked in each departmentand then the department rankings arecombined to develop an organizationalranking. The variation in payment of

salaries depends on the variation of thenature of the job performed by theemployees.


39/49

Merits simple and easy to understand and explain Most suitable to small organizations which

have well defined jobs Takes less time in evaluation Less expensive and require little efforts for

maintenance

Demerits Contains pre-determined yardstick to dojob evaluation

It is criticized and brings resentment as it isdone based on random choice

Does not study all aspects of different jobs It is not a scientific method


40/49

Classification method

A predetermined number of job groups or job classesare established and jobs are assigned to theseclassifications. Separate classes may include office,clerical, managerial, personnel etc.

Class I Executives: further classification under thiscategory may be office manager, deputy officemanager, office superintendent, departmentalsupervisor etc.

Class II Skilled Workers: purchasing assistant,cashier, receipts clerk etc.

Class III Semiskilled Workers: machine operator,office boys etc.


41/49

Merits of Grading Method

Simple to operate and understand

Easy grouping of employees who are large innumber

Popular in government departments

Easy to calculate, less expensive and consumesless time

Demerits of Grading Method

Difficult to explain complication of grading

Dependency on technical experts or specialists Difficult to operate when number of jobs

increases

Classification may be incorrect as no detailedanalysis is done


42/49

Factor Comparison method

A more systematic and scientific method -developed by E J Benge in 1926

Key jobs are selected each job and ranked

according to a series of factors -factorsinclude mental effort, physical effort, skillneeded, responsibility, supervisoryresponsibility, working conditions etc.

Done by job evaluation committee.


43/49

Edwin B Flippo has suggestedfollowing steps in this method

Select job factors- eg. The 5 mentioned earlier

Select key job-to be the standard for comparison-should cover the highest to lowest paid jobs.

Rank job factors under each key job

Allocate correct rate of each key job among the jobfactors-each factor of key job is allocated a basic pay.

Evaluate all other jobs in terms of these factors andobtain money value.

Design and operate wage structure by summing upthese values for each job.


44/49

Example

Key Job

Factors

Daily

Wage

Rate

Physical

Effort

Mental

Effort

Responsibilit

y

Working

Conditio

ns

Skill

Electrician 60 11(3) 14(1) 12(1) 8(2) 15(1)

Cleaner 30 9 (4) 6 (4) 6(4) 5(4) 4(5)

Labourer 25 8 (5) 4 (5) 3 (5) 4 (5) 6 (4)


45/49

Cleaner,

After this all other jobs in thedepartment are compared in terms ofeach factor.

Eg. Job of Painter is found to besimilar to skill of electrician, mentaleffort and responsibility of cleaner,physical effort and working conditionsof labourer add up the values toarrive at the wage for the Painter.


46/49

Merits of Factor Comparison Method

It is objective and analytical

Each job is compared with all other jobs interms of key factors

Monetary value is assigned in a fair way

based on agreed rank order It is flexible

Demerits of Factor Comparison Method

Difficult to understand, explain and operate

Uses same criteria to assess all jobs Time consuming and costly


47/49

Point Rating Method

This method is widely used involvesquantitative and analytical approach -jobs are expressed in terms of key

factors. Points are assigned to eachfactor after prioritizing each factor inorder of importance. The points aresummed up to determine the wage

rate for the job. Jobs with similarpoint totals are placed in similar paygrades.


48/49

Steps

Type of jobs to be evaluated are identifiedand classified on basis of similarity.

Identify factors to be used that covers allaspects of the job-education, skill, physicalability, responsibility..

Determination of degrees experience maybe divided into 5 degrees 5 point for 3-6months, 10 points for 6 mths 1 year

Assigning weights for each factor as perimportance. Assigning money value to points and

summing up to get the value of the job.


49/49

Merits of Point Method Accurate, logical and scientific as major factors

are sub-divided Efforts to present objective study of jobevaluation

Suitable for large scale enterprises Attempts to bring uniformity in wage structure

Can be used for a long time as scales aredeveloped Demerits of Point Method Expensive as it involves lot of research Difficult in selecting or rejecting a factor

After selection, few factors become furtherdifficult to assign points for sub-factors

Beyond the understanding of an averageemployee

4. Performance Appraisal

Documents

Transcript of 4. Performance Appraisal