Performance appraisal - Traditional approach

Traditionally, performance appraisal has been used as just a method for determining and justifying the salaries of the employees.

Then it began to be used a tool for determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past performance of the employees.

Traditional approach

This approach was a past oriented approach which focused only on the past performance of the employees i.e. during a past specified period of time.

This approach did not consider the developmental aspects of the employee performance i.e. his training and development

Performance appraisal - Modern approach More formal and structured. As a tool to identify better performing

employees from others, As a tool to identify employees’ training needs, As a tool to identify career development paths, As a tool to identify rewards and bonuses As a tool to identify promotions to the next

levels.

Performance Appraisal Methods

Individual Evaluation Methods Confidential report Essay evaluation Critical incidents Checklists Graphic rating scale Behaviorally anchored rating scale MBO

Confidential Report

Descriptive report

Prepared at the end of the year

Prepared by the employee’s immediate supervisor

The report highlights the strengths and

weaknesses of employees

Prepared in Government organizations

Does not offer any feedback to the employee

Essay evaluation The rater is asked to express the strong as

well as weak points of employee’s behavior

The rater considers the employee’s : Job knowledge and potential

Understanding of company’s programs, policies,

objectives etc

Relation with co-workers and supervisors

Planning, organizing and controlling ability

Attitude and perception

Critical incidents

Manager prepares lists of statements of very

effective and ineffective behavior of an employee

These critical incidents represent the outstanding

or poor behavior of the employees

The manager periodically records critical incidents

of employee’s behavior

Example:

July 20 - Sales clerk patiently attended to the

customers complaint. He is polite, prompt,

enthusiastic in solving the customers’ problem

July 20 - The sales assistant stayed 45

minutes beyond his break during the busiest

part of the day. He failed to answer store

manager’s call thrice. He is lazy, negligent,

stubborn and uninterested in work

Critical Incident method

Ex: A fire, sudden breakdown, accident

Workers reaction scale

A informed the supervisor immediately 5B Become anxious on loss of output 4C tried to repair the machine 3D Complained for poor maintenance 2E was happy to forced test 1

Checklists

A checklist is a set of objectives or descriptive

statements about the employee and his behavior.

Under weighted checklist, value of each question may

be weighted.

Example:

Is the employee really interested in the task assigned?

Yes / No

Is he respected by his colleagues? Yes / No

Checklist method

•Simple checklist method•Weighted checklist method•Forced choice method

Simple checklist method:Is employee regular Y/NIs employee respected by subordinate Y/NIs employee helpful Y/NDoes he follow instruction Y/NDoes he keep the equipment in order Y/N

Weighted checklist method

weights performance rating(scale 1 to 5 )

Regularity 0.5Loyalty 1.5Willing to help 1.5Quality of work 1.5Relationship 2.0

Forced choice method

This method uses several sets of paired phrases, two

of which may be positive and two negative

The rater is asked to indicate which of the four

phrases is the most and least descriptive of a

particular worker

Favorable qualities earn plus credit and unfavorable

ones earn the reverse

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

Graphic Rating Scale

A form is used to evaluate the performance of the

employees

A variety of traits may be used in this device, the

most common being quality and quantity of work

Easy to understand and use.

Permits statistical tabulation of scores of employees

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 _

DependabilityInitiativeOverall outputAttendanceAttitudeCooperationTotal score Continuous Rating Scale

Discontinuous Rating Scale

Attitude

NoInterest

Indifferent

Interested

Enthusiastic

Veryenthusiastic

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

MBO Process

Set organizational goals Defining performance target Performance review feedback

MBO

MBO emphasizes collectively set goals that are

tangible, verifiable, and measurable

Focuses attention on goals rather than on methods

Concentrates on Key Result Areas (KRA)

Systematic and rational technique that allows

management to attain maximum results from

available resources by focusing on achievable goals

Key Elements Of MBO

Arranging organizational goals in a means-ends chain Engaging in joint goal setting

This process has the following steps: Identify KRAs Define expected results Assign specific responsibilities to employees Define authority and responsibility relationship

Conducting periodic progress review Conducting annual performance review

Group Appraisal Ranking Paired comparison Forced distribution Performance tests Field review

technique 360 degree Appraisal Method

Performance Appraisal Methods

Ranking method

The evaluator rates the employee

from highest to lowest on some

overall criteria

Paired comparison method

Each worker is compared with all other

employees in a group

For several traits paired comparisons are

made, tabulated and then rank is assigned

to each worker

This method is not applicable when the

group is large

Ranking method

Employee Rank

A 2

B 1

C 3

D 5

E 4

Paired comparison method

A B C D E Final RankA - - - + + 3

B + - - + + 2

C + + - + + 1

D - - - - + 4

E - - - - - 5No of Positive evaluation Total no. of evaluation * 100 = employee superior evaluation

Forced Distribution Methods

The rater is asked to appraise the

employee according to predetermined

distribution scale.

Two criteria used for rating are: job

performance and promotability.

Forced Distribution Methods

A five point performance scale is also

used without mentioning any

descriptive statements.

The worker is placed between two

extremes of “good” and “bad”

performance.

Forced Distribution method

10% 20% 40% 20% 10%

poor Belowaverage

average good Excellent

No. of employees

Force distribution curve

Field review method

The appraiser goes to the field and obtains the

information about work performance of the

employee by way of questioning the said

individual, his peer group, and his superiors

Field review methodPerformance subordinate peers superior customerDimension

Leadership ^ ^

Communication ^ ^

Interpersonal skills ^ ^

Decision making ^ ^ ^

Technical skills ^ ^ ^

Motivation ^ ^ ^

360o Appraisal System

It is a systematic collection and feedback of

performance data on an individual or group,

derived from a number of stakeholders

Data is gathered and fed back to the individual

participant in a clear way designed to promote

understanding, acceptance and ultimately

behavior

360o Appraisal System

Appraisal taken from: Boss (HOD) Subordinates Peers Immediate supervisor

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.

For middle level managers

Departmental performance Coordination among employees Degree of upward communication from

supervisors Degree of clarity about corporate goals

and policies

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