PERFORMANCE APPRAISAL

METHODS , LIMITATIONS AND ADVANTAGES

PERFORMANCE APPRAISAL

Performance Appraisal means systematic evaluation of personality and performance of each employee by his supervisor.

It employs various rating techniques.

According to DALE YODER,”Performance appraisal includes all formal procedure used to evaluate personalities and contribution and potential of group members in a working organisation. it is a continuous process to secure information necessary for making correct and objective decisions on employees”.

Performance Appraisal goes by various names such as

performance evaluation , merit rating ,merit evaluation , etc.

IMPORTANCE OF PERFORMANCE APPRAISAL

Performance Appraisal helps the supervisor to evaluate the performance and potential of employees in an working organisation.

Performance Rating helps in guiding and correction of employees.

Performance Appraisal can be used as a basis of sound personnel policy in relation to transfers and promotions.

Performance Appraisal provides an incentive to the employees to better their performance in a bid to improve their ratings over other.

Systematic Appraisal develop the confidence amongst employees

LIMITATIONS

If the factors included in the assessment are irrelevant, the result of merit rating is not accurate.

Some of the factors are highly subjective like initiative and personality of the employees ; so the actual rating may not be on scientific lines.

Supervisors often do not have critical ability in assessing the staff.

METHODS OF APPRAISAL

Performance Appraisal ↓ Traditional Methods Modern Methods1.Unstructured appraisal 1.Management by

2.Employee ranking objectives3.Forced distribution 2. Behaviourally 4.Graphic-rating scales anchored rating5.Check-lists scales6.Critical incidents 3. 360* Appraisal7. Field review

TRADITIONAL METHODS

Traditional method is very old techniques of performance appraisal.

In this evaluation is done on the basis of standards of personal traits or quality such as attitudes, leadership, knowledge, loyalty, etc.

UNSTRUCTURED APPRAISAL

Under this ,the appraiser is required to write down his impression about the person being appraised in an unstructured way.

However , in some organisation , comments are required to be grouped under specific headings such as quality of job performance, reasons for specific job behaviours, personality traits and development needs.

This system is highly subjective and has got its merit in its simplicity and is still in use especially in the small firms.

EMPLOYEE RANKING Ranking is a simple process of placing employees in a

rank according to their job performance.

According to this method employees/workers are rated on the over all basis with reference to their job performance.

In this way , the best is placed first in the rank and poorest occupies the last rank.

Under this method every employee in a job family is compared with other employee to determine which is better worker.

The difficulty in this method is that it does not indicate the degree of difference between the first man and the second man, and so on.

FORCE DISTRIBUTION METHOD

Under this method, supervisor judge the employees in predetermined range of scale.

This system based on the presumption that employees can be divided into five points scale of outstanding, above average ,average, below average and poor.

This method helps the appraiser to distribute the employees into different categories according to their performance in an organisation.

This method eliminates the subjective judgement

on the part of supervisors.

CHECK LIST

This method consist of two techniques: (A) Weighted Check List (B) Forced Choice

(A) WEIGHTED CHECK LIST

Under this method ,various statements are prepared in such a manner that they describe various types and levels of behaviors for a particular job.

The weighted check list should be prepared by the person thoroughly acquainted with job.

Weights are assigned to the statements in accordance with the way employees are ranked by the raters.

This method involves lengthy procedure of evaluating employees.

Moreover, this method is costlier affair.

(B) FORCED CHOICE

This method is used particularly with the objective of avoiding scope for personal prejudices.

Under this method rater force to choose one descriptive statement from various statements that are available.

This method have greater objectivity then most other methods.

This method is very lengthy and hence more time consuming.

CRITICAL INCIDENT METHOD

A critical incident means a significant by an employee exceeding or failing the requirements of his job.

This method represents the exceptional behaviour of an employee at work.

Under this method supervisors required to record all such incident in each employees behaviour.

The critical incident method is not a rating method as it is requires the supervisor to pay a close attention to what an employee is doing.

The major defect in this method is that most of the time the employees are neither positive nor negative incidents.

FIELD REVIEW METHOD

Under this method supervisors are interviewed by an expert from the personnel department.

Under this method, interviewer question the supervisor about the requirement of each job in his unit and the performance of each man in his job.

The success of the field review method depends upon the competences of the interviewer.

This method also ensures greater satisfaction that the supervisors will give adequate attention to the appraisal.

CRITICISM OF TRADITIONAL METHODS

The general criticism of traditional performance appraisal system is that they are too subjective in nature.

There are number of errors or weaknesses in traditional method such as:

(1) Central Tendency

(2) Leniency or Strictness

(3) Recent Behaviour Bias

(4) Miscellaneous Biases

MODERN APPRAISAL METHODS

There are three important methods of performance appraisal which are used by the mordern concept:

(1) Management by Objective which represent result-oriented appraisal.

(2) Behaviourally-Anchored Rating Scale which is based on rating the behaviour of the subordinates.

(3) 360* appraisal

MANAGEMENTS BY OBJECTIVES It was the Peter Drucker who proposed goal setting

approach to performance appraisal which he called ‘Management by Objectives and Self Controls’.

Goal setting approach or “management by objectives”(MBO) is same as behavioural approach to subordinate appraisal.

Under this approach, an employee is not appraised by his recognisable traits, but by his performance with respect to agreed goals or objectives.

This approach is considerably superior to the traditional approach of performance appraisal.

It emphasizes training and development of individual.

STEPS UNDER GOAL SETTING APPROACH

The subordinate discusses his job descriptions with his superior and they are agree on the contents of his job.

The subordinates prepares a list of reasonable objectives for the coming period of six to twelve months.

He sits with his superior to discuss these targets and plans.

Check-points are established for the evaluation of progress, and the way of measuring are selected.

The superior and the subordinate meet at the end of the period to discuss the result of the subordinate’s efforts to meet the targets mutually established.

LIMITATIONS OF GOAL SETTING APPROACH

This approach is not easy to administer. It involves considerable time, thought and contact between the superior and the subordinates.

This approach mainly emphasises counselling, training and development. It is not focuses on critical evaluation and modification.

This approach is appropriate for the appraisal of executives and supervisors personnel who can understand it in a better way.

BEHAVIOURALLY ANCHORED RATING SCALES

Behaviourally anchored rating scales(BARS) are designed to identify the critical area of performance for a job, and to describe the more effective and less effective behaviour for getting results.

Behaviourally Anchored Rating Scale(BARS) approach combines elements of traditional rating scale and critical incident method.

STEPS UNDER BARS

Identification of Critical Incidents or Behaviours.

Identification of performance dimensions.

Reclassification of Critical Behaviour.

Assigning Scale Values to the Critical Behaviours.

Development of BAR Instruments.

360* APPRAISAL

The 360 degree appraisal involves rating of an employee or manager by everyone above, alongside and below him as shown in fig.

Superior

Employees

Subordinates

Peers Others

Corporates like Wipro, Reliance Industries Ltd., Godrej Soaps, general Electric India are all using this tool to find out the truth of their managers.

360 degree Appraisal is used to design promotion and reward system and it mostly known as a Fact Finding Techniques.

Each manager is assessed by a minimum of Fifteen colleagues, at least two of them being bosses, four of them peers, and six of them subordinates.

MERITS OF 360 DEGREE APPRAISAL

The 360 degree appraisal leads to greater self- awareness of those appraised. It reveals strengths and weaknesses in their working style.

The gap between self assessment and the views of one’s colleagues or peer group in reduced.

Inflexible managers are forced to initiate self- change.

It facilitates empowerment of subordinates who get a say in the appraisal of their bosses.

LIMITATIONS OF 360 DEGREE METHODS

The 360 degree appraisal system ignores performance in terms of goals.

The candidate being appraised may not accept negative feedback from the subordinates and the peers. He might feel humiliated.

Responses from colleagues often tend to be biased.

The subordinates and peers might not fully competent in appraisal.

THANK YOU

THANKS ONCE AGAIN…………..