tazeensayed
New member
hiiiii i m saher....here 2 help bms students..:SugarwareZ-191:
helloo
- Thread starter tazeensayed
- Start date
-
- Tags
- helloo
anuxp_1988
New member
hiiiiiiiiiii this is aniket jain pls help me with 100marks project on performance appraisal
dk2424
DK 2424
Performance appraisal
In simple terms, appraisal may be understood as the assessment of an individual’s performance in a systematic way, the performance being measured against such factors as job knowledge, quality, and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health, and the like. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed.
A formal definition of performance appraisal is:
“It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development.”
A more comprehensive definition is:
“Performance appraisal is a formal, structured system of measuring and evaluating an employee’s job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society all benefit.”
The second definition includes employee’s behavior as part of the assessment. Behavior can be active or passive. Either way behavior affects job results. The other terms used for performance appraisal are: performance rating, employee assessment, employee performance review, personnel appraisal, performance evaluation, employee evaluation, and merit rating. In a formal sense, employee assessment is as old as the concept of management, and in an informal sense, it is probably as old as mankind. Nor performance appraisal is done in isolation. It is linked to job analysis.
Objectives of performance appraisal.
Data relating to performance assessment of employees are recorded, stored, and used for several purposes. The main purposes for employee assessment are:
1) To effect promotions based on competence and performance
2) To confirm the services of probationary employees upon their completing the probationary period satisfactorily.
3) To assess the training and development need of employees.
4) To decide upon a pay raise.
5) To let the employees know where they stand insofar as their performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development.
6) To improve communication. Performance appraisal provides a format for dialogue between the superior and the subordinate, and improves understanding of personal goals and concerns. This can also have the effect of increasing the trust between the rater and the ratee.
7) Finally, performance appraisal can be used to determine whether HR programmes such as selection, training, and transfer have been effective or not.
The employee performance appraisal enables you to identify, evaluate and develop an individual's performance. It is a tool to encourage strong performers to maintain their high level of performance and to motivate poor performers to do better.
Other important benefits of a formal appraisal process are:
• Validation of hiring practices — are the right people in the right positions?
• Provision of an objective measuring tool on which compensation decisions, and promotions can be based
• Identification of training needs — individually, departmentally and organizationally
• Identification of employees who have the potential for advancement or who might be better suited in other areas of the organization
1. Objectives Of An Appraisal:
1. Promotion, separation, and transfer decisions
2. Feedback to the employee regarding how the organization viewed the employee's performance
3. Evaluations of relative contributions made by individuals and entire departments in achieving higher level organization goals
4. Criteria for evaluating the effectiveness of selection and placement decisions, including the relevance of the information used in the decisions within the organization
5. Reward decisions, including merit increases, promotions, and other rewards
6. Ascertaining and diagnosing training and development decisions
7. Criteria for evaluating the success of training and development decisions
8. Information upon which work scheduling plans, budgeting, and human resources planning can be used
2. Establish Job Expectations:
Goals should be realistic, i.e., practical and achievable. Realistic goals provide a "balance" between what is hard and what is easy to achieve. Goals should motivate people to improve and to reach for attainable ends. For a goal to be motivational, the person must feel that the goal can be achieved. Impossible goals de-motivate and defeat the goal-setting process. Likewise, easy goals do not motivate any more than unattainable goals. You should review your goals on a quarterly or semi-annual basis to check your progress and to make any necessary adjustments.
3. Design An Appraisal Programme:
(i) Formal versus Informal approach?
• Many organizations encourage a mixture of both formal and informal approach. The formal approach is used as the primary evaluation, where as the informal approach is used more for performance feedback.
(ii) Who are the raters?
• Immediate supervisors, specialists from the hr department, subordinates, peers, committees, clients, or a combination of many.
(iii) What problems are encountered?
• Leniency, severity, bias
(iv) How to solve the problems?
• Train the raters and appraisers
(v) What should be evaluated?
• Quality, quantity, timeliness, cost effectiveness, need for supervision, interpersonal impact.
(vi) When to evaluate?
• Once in three months, once in six months or once a year
4. Appraise Performances:
Use methods of appraisal such as psychological appraisals, assessment centers, ranking method, performance tests and observations, essay method etc.
The formal performance appraisal process is one of assessing, summarizing and developing the work performance of an employee. The performance appraisal process should include at least two meetings convened by the supervisor with the employee.
5. Performance Interview:
Once appraisal has been made of employees, the raters should discuss and review the performance with the ratees, so that they receive feed back about where they stand in the eyes of the superiors. Feedback is necessary to effect improvement in performance. Performance interview has 3 goals:
(i) To change the behavior of employees whose performance does not meet organizational requirements or their own personal goals
(ii) To maintain the behavior of employees who perform in an acceptable manner
(iii) To recognize superior performance behaviors so that they will be continued
6. Use Appraisal Data For Appropriate Purposes:
The Hr department must use the data and information generated through performance evaluation. The employers offer significant rewards to employees in the form of:
(i) Money to purchase goods and services, for luxury
(ii) Opportunities to interact with other people in a favorable working environment
(iii) Opportunities to learn grow and make full use of their potential etc.
Data & information outputs of a performance will be useful in the following areas of HRM:
(i) Remuneration administration
(ii) Validation of selection programmes
(iii) Employee training & development programmes
(iv) Promotion, transfer & lay-off decisions
(v) Grievance & discipline programmes
(vi) HR planning
Methods of Evaluation of Performance Appraisal
Numerous methods have been devised to measure the quantity and quality of employee’s job performance. Each of the methods discuss could be effective for some purposes for some organization as different organizations different methods. Broadly all the approaches can be classified into past oriented and future oriented.
PAST ORIENTED
Rating Scales
This is the simplest and most popular method of appraising employee performance. The typical rating-scale system consists of several numeric scales, each representing a job-related performance criterion such as dependability, initiative, output, attendance, attitude and the like. Each scale ranges from excellent to poor. The rater checks the appropriate performance level on each criterion, then computes the employee’s total numerical score. The number of points scored may be linked to salary increases, whereby so many points equal a rise of some percentage.
Rating scales offer the advantages of adaptability, relatively easy use and low cost. Nearly every type of job can be evaluated with the rating scale, the only requirement being that the job performance criteria should be changed. This way a large number of employees can be rated in a short time, and the rater does not need any training to use the scale.
The disadvantages of this method are several. The raters biases are likely to influence the evaluation, and the biases are particularly pronounced on subjective criteria such as co-operation, attitude and initiative. Furthermore, numerical scoring gives an illusion of precision that is really unfounded
Man to Man comparison method:
This technique was used by the US army, during the first world war. By this method certain factors are selected for the design by the rater for each factor. A scale of man is also created for each selected factor. Each man to be rated is compared with the man in the scale, and certain scores for each factor are awarded to him. So, instead of comparing a “whole man” to a “whole man” personnel are compared to the key man in respect of one factor at a time. This method s used in job evaluation and is called the factor comparison method. In performance appraisal it is not of much use because the designing of scales is a complicated task.
360-degree system of appraisal
Where appraisal are made by peers, superiors, subordinates and clients it is called 360-degree system of appraisal. First developed at GE, US in 1992, the system has become popular in our country too. GB (India), Reliance Industries, Crompton Greaves, Godrej soaps, Infosys, Thermax and Thomas Cook are using the method with greater benefits. The Arthur Anderson survey (1997) reveal the20% of the organizations use the 360-degree method. Here, besides assessing performance, other attributes of the assesse- talents, behavioural quirks, values, ethical standards, tempers and loyalty are evaluated by people who are best placed to do it.
Peer appraisal
Peers are in a better position to evaluate certain facts of job performance which the subordinates or supervisors cannot do. Such facts include contribution to work group projects, interpersonal effectiveness, communication skills, reliability and initiative. Closeness of the working relationship and the amount of personal contacts place peers in a better position to make accurate assessments. Unfortunately, friendship or animosity may result in distortion of evaluation. Further, when reward allocation is based on peer evaluation, serious conflicts among co-workers may develop. Finally, all the peers may join together to rate each other high.
FUTURE ORIENTED
MBO
The Management by objectives concept which was conceived by Peter Drucker, reflects a management philosophy which values and utilizes employee contributions.
MBO wroks can be described in four steps:
1) The organization, superiors and subordinates together or just the superiors alone establish the goals of the employee. This goal usually the desired outcome to be achieved and it can be used to evaluate performance.
2) Second step involves involves setting the performance standard for the subordinates in a previously arranged time period. As subordinates perform, they know fairly well what there is to do, what has been done, and what remains to be done.
3) Then the actual level of goal attained is compared to the goals agreed upon. The evaluator figures out why the goals were not met and accordingly determines training needs.
4) The last step is establishing new goals and, possibly, new strategies for goals not previously attained. If the goals were succeeded the subordinate may have larger involvement in setting of his next goal otherwise the superior may have to do it alone.
However, this method has been criticised for not being applicable to jobs with little or no flexibility, such as assembly-line work. It works well with managerial personnel and employees who have a fairly wide range of flexibility and self control in their jobs. And if this method is linked to employee rewards, the they are more likely to take up less challenging goals so that they are more likely to achieve them. Also if the rewards are semi annual or annual, then the employees may take up short term goals and neglect the important long term goals. L&T follows MBO style of evaluation
Assessment centers:
Mainly used for executive hiring, assessment centers are now being used for evaluating executive o supervisory potential. An assessment centre is a central location where managers may come together to have their participation in job related exercises evaluated by trained observers. The basic idea is to evaluate managers over a period of time, say one to three days, by observing and evaluating their behaviour across a series of selected exercises or work samples. Assesses are requested to participate in-basket exercises, work groups (without leaders), computer simulations, role playing, and other similar activities which require the same attributes for successful performance, as in the actual job. After recording their observations, the raters meet and discuss these observations. The decision regarding the performance of each assessee is based upon this discussion of observations. Self evaluation and peer evaluation are also thrown in for final rating.
uses of Performance Appraisal?
• Suitable Placement: Performance appraisal is useful for evaluating performance of subordinates and also for understanding their potentials. This information is available progressively and can be us purposefully for assigning duties to employees as per their merits and potentials. Thus, placement of staff and periodical adjustment in the placement can be made scientifically.
• Assistance in Self-improvement: Performance appraisal gives the details of plus points and weaknesses of employees. In addition, they are given guidance for removing their weaknesses and also for making their plus points more conspicuous. In brief, performance appraisal assists the employees in self-development. This is possible through performance feedback to every employee periodically.
• Incentive to Grown and Develop: Performance appraisal acts as an incentive to employees to improve their performance, develop new qualities and secure higher positions in the org. the employee with merit may be given special increments or promotion to higher position. This motivates others to improve their performance and qualities for similar benefits.
• Effective training programme: performance appraisal suggests the drawbacks and other weaknesses of employees. It is possible to remove such common weaknesses and deficiencies of employees by adjusting their training programmes accordingly.
• Introduction of Sound Personnel Policies: transfers, promotions, wage rates and dismissal are the different areas of personnel management. These personnel policies are directly connected with the performance appraisal of employees. Such policies become fair, impartial and acceptable to emp. When they are based on performance appraisal.
• Cordial Employer-Employees Relation: performance appraisal avoids or at least minimizes grievances of employees as regards promotions, transfers, increments etc. Employees develop a sense of confidence that injustice will not be done to any employee as performance appraisal system is based on sound principles. Management is also not in a position to make partiality/ favouratism when performance appraisal records are maintained properly and used when required.
• Human Resource Planning and Development: performance appraisal facilitates human resource planning and development. It suggests the type of manpower
available. It is also possible to train or develop the existing manpower as per the future needs of the enterprise. This is possible through training and exec. Development programmes.
• Employee Communication: performance appraisal facilitates direct communication with the employees through appraisal interview and post appraisal interviews. Such communication guides emp. And also provides more info. to the mgmt. regarding the expectations and feelings of the employees.
• High Employee Morale: scientific and impartial appraisal gets the support from the employees. They feel that the mgmt. gives due importance to them and is genuinely interested I their career development and well being, this creates positive impact on the mental make-up of employees. They treat mgmt. as their friend, guide and well wisher. This raises the morale.
In simple terms, appraisal may be understood as the assessment of an individual’s performance in a systematic way, the performance being measured against such factors as job knowledge, quality, and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health, and the like. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed.
A formal definition of performance appraisal is:
“It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development.”
A more comprehensive definition is:
“Performance appraisal is a formal, structured system of measuring and evaluating an employee’s job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society all benefit.”
The second definition includes employee’s behavior as part of the assessment. Behavior can be active or passive. Either way behavior affects job results. The other terms used for performance appraisal are: performance rating, employee assessment, employee performance review, personnel appraisal, performance evaluation, employee evaluation, and merit rating. In a formal sense, employee assessment is as old as the concept of management, and in an informal sense, it is probably as old as mankind. Nor performance appraisal is done in isolation. It is linked to job analysis.
Objectives of performance appraisal.
Data relating to performance assessment of employees are recorded, stored, and used for several purposes. The main purposes for employee assessment are:
1) To effect promotions based on competence and performance
2) To confirm the services of probationary employees upon their completing the probationary period satisfactorily.
3) To assess the training and development need of employees.
4) To decide upon a pay raise.
5) To let the employees know where they stand insofar as their performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development.
6) To improve communication. Performance appraisal provides a format for dialogue between the superior and the subordinate, and improves understanding of personal goals and concerns. This can also have the effect of increasing the trust between the rater and the ratee.
7) Finally, performance appraisal can be used to determine whether HR programmes such as selection, training, and transfer have been effective or not.
The employee performance appraisal enables you to identify, evaluate and develop an individual's performance. It is a tool to encourage strong performers to maintain their high level of performance and to motivate poor performers to do better.
Other important benefits of a formal appraisal process are:
• Validation of hiring practices — are the right people in the right positions?
• Provision of an objective measuring tool on which compensation decisions, and promotions can be based
• Identification of training needs — individually, departmentally and organizationally
• Identification of employees who have the potential for advancement or who might be better suited in other areas of the organization
1. Objectives Of An Appraisal:
1. Promotion, separation, and transfer decisions
2. Feedback to the employee regarding how the organization viewed the employee's performance
3. Evaluations of relative contributions made by individuals and entire departments in achieving higher level organization goals
4. Criteria for evaluating the effectiveness of selection and placement decisions, including the relevance of the information used in the decisions within the organization
5. Reward decisions, including merit increases, promotions, and other rewards
6. Ascertaining and diagnosing training and development decisions
7. Criteria for evaluating the success of training and development decisions
8. Information upon which work scheduling plans, budgeting, and human resources planning can be used
2. Establish Job Expectations:
Goals should be realistic, i.e., practical and achievable. Realistic goals provide a "balance" between what is hard and what is easy to achieve. Goals should motivate people to improve and to reach for attainable ends. For a goal to be motivational, the person must feel that the goal can be achieved. Impossible goals de-motivate and defeat the goal-setting process. Likewise, easy goals do not motivate any more than unattainable goals. You should review your goals on a quarterly or semi-annual basis to check your progress and to make any necessary adjustments.
3. Design An Appraisal Programme:
(i) Formal versus Informal approach?
• Many organizations encourage a mixture of both formal and informal approach. The formal approach is used as the primary evaluation, where as the informal approach is used more for performance feedback.
(ii) Who are the raters?
• Immediate supervisors, specialists from the hr department, subordinates, peers, committees, clients, or a combination of many.
(iii) What problems are encountered?
• Leniency, severity, bias
(iv) How to solve the problems?
• Train the raters and appraisers
(v) What should be evaluated?
• Quality, quantity, timeliness, cost effectiveness, need for supervision, interpersonal impact.
(vi) When to evaluate?
• Once in three months, once in six months or once a year
4. Appraise Performances:
Use methods of appraisal such as psychological appraisals, assessment centers, ranking method, performance tests and observations, essay method etc.
The formal performance appraisal process is one of assessing, summarizing and developing the work performance of an employee. The performance appraisal process should include at least two meetings convened by the supervisor with the employee.
5. Performance Interview:
Once appraisal has been made of employees, the raters should discuss and review the performance with the ratees, so that they receive feed back about where they stand in the eyes of the superiors. Feedback is necessary to effect improvement in performance. Performance interview has 3 goals:
(i) To change the behavior of employees whose performance does not meet organizational requirements or their own personal goals
(ii) To maintain the behavior of employees who perform in an acceptable manner
(iii) To recognize superior performance behaviors so that they will be continued
6. Use Appraisal Data For Appropriate Purposes:
The Hr department must use the data and information generated through performance evaluation. The employers offer significant rewards to employees in the form of:
(i) Money to purchase goods and services, for luxury
(ii) Opportunities to interact with other people in a favorable working environment
(iii) Opportunities to learn grow and make full use of their potential etc.
Data & information outputs of a performance will be useful in the following areas of HRM:
(i) Remuneration administration
(ii) Validation of selection programmes
(iii) Employee training & development programmes
(iv) Promotion, transfer & lay-off decisions
(v) Grievance & discipline programmes
(vi) HR planning
Methods of Evaluation of Performance Appraisal
Numerous methods have been devised to measure the quantity and quality of employee’s job performance. Each of the methods discuss could be effective for some purposes for some organization as different organizations different methods. Broadly all the approaches can be classified into past oriented and future oriented.
PAST ORIENTED
Rating Scales
This is the simplest and most popular method of appraising employee performance. The typical rating-scale system consists of several numeric scales, each representing a job-related performance criterion such as dependability, initiative, output, attendance, attitude and the like. Each scale ranges from excellent to poor. The rater checks the appropriate performance level on each criterion, then computes the employee’s total numerical score. The number of points scored may be linked to salary increases, whereby so many points equal a rise of some percentage.
Rating scales offer the advantages of adaptability, relatively easy use and low cost. Nearly every type of job can be evaluated with the rating scale, the only requirement being that the job performance criteria should be changed. This way a large number of employees can be rated in a short time, and the rater does not need any training to use the scale.
The disadvantages of this method are several. The raters biases are likely to influence the evaluation, and the biases are particularly pronounced on subjective criteria such as co-operation, attitude and initiative. Furthermore, numerical scoring gives an illusion of precision that is really unfounded
Man to Man comparison method:
This technique was used by the US army, during the first world war. By this method certain factors are selected for the design by the rater for each factor. A scale of man is also created for each selected factor. Each man to be rated is compared with the man in the scale, and certain scores for each factor are awarded to him. So, instead of comparing a “whole man” to a “whole man” personnel are compared to the key man in respect of one factor at a time. This method s used in job evaluation and is called the factor comparison method. In performance appraisal it is not of much use because the designing of scales is a complicated task.
360-degree system of appraisal
Where appraisal are made by peers, superiors, subordinates and clients it is called 360-degree system of appraisal. First developed at GE, US in 1992, the system has become popular in our country too. GB (India), Reliance Industries, Crompton Greaves, Godrej soaps, Infosys, Thermax and Thomas Cook are using the method with greater benefits. The Arthur Anderson survey (1997) reveal the20% of the organizations use the 360-degree method. Here, besides assessing performance, other attributes of the assesse- talents, behavioural quirks, values, ethical standards, tempers and loyalty are evaluated by people who are best placed to do it.
Peer appraisal
Peers are in a better position to evaluate certain facts of job performance which the subordinates or supervisors cannot do. Such facts include contribution to work group projects, interpersonal effectiveness, communication skills, reliability and initiative. Closeness of the working relationship and the amount of personal contacts place peers in a better position to make accurate assessments. Unfortunately, friendship or animosity may result in distortion of evaluation. Further, when reward allocation is based on peer evaluation, serious conflicts among co-workers may develop. Finally, all the peers may join together to rate each other high.
FUTURE ORIENTED
MBO
The Management by objectives concept which was conceived by Peter Drucker, reflects a management philosophy which values and utilizes employee contributions.
MBO wroks can be described in four steps:
1) The organization, superiors and subordinates together or just the superiors alone establish the goals of the employee. This goal usually the desired outcome to be achieved and it can be used to evaluate performance.
2) Second step involves involves setting the performance standard for the subordinates in a previously arranged time period. As subordinates perform, they know fairly well what there is to do, what has been done, and what remains to be done.
3) Then the actual level of goal attained is compared to the goals agreed upon. The evaluator figures out why the goals were not met and accordingly determines training needs.
4) The last step is establishing new goals and, possibly, new strategies for goals not previously attained. If the goals were succeeded the subordinate may have larger involvement in setting of his next goal otherwise the superior may have to do it alone.
However, this method has been criticised for not being applicable to jobs with little or no flexibility, such as assembly-line work. It works well with managerial personnel and employees who have a fairly wide range of flexibility and self control in their jobs. And if this method is linked to employee rewards, the they are more likely to take up less challenging goals so that they are more likely to achieve them. Also if the rewards are semi annual or annual, then the employees may take up short term goals and neglect the important long term goals. L&T follows MBO style of evaluation
Assessment centers:
Mainly used for executive hiring, assessment centers are now being used for evaluating executive o supervisory potential. An assessment centre is a central location where managers may come together to have their participation in job related exercises evaluated by trained observers. The basic idea is to evaluate managers over a period of time, say one to three days, by observing and evaluating their behaviour across a series of selected exercises or work samples. Assesses are requested to participate in-basket exercises, work groups (without leaders), computer simulations, role playing, and other similar activities which require the same attributes for successful performance, as in the actual job. After recording their observations, the raters meet and discuss these observations. The decision regarding the performance of each assessee is based upon this discussion of observations. Self evaluation and peer evaluation are also thrown in for final rating.
uses of Performance Appraisal?
• Suitable Placement: Performance appraisal is useful for evaluating performance of subordinates and also for understanding their potentials. This information is available progressively and can be us purposefully for assigning duties to employees as per their merits and potentials. Thus, placement of staff and periodical adjustment in the placement can be made scientifically.
• Assistance in Self-improvement: Performance appraisal gives the details of plus points and weaknesses of employees. In addition, they are given guidance for removing their weaknesses and also for making their plus points more conspicuous. In brief, performance appraisal assists the employees in self-development. This is possible through performance feedback to every employee periodically.
• Incentive to Grown and Develop: Performance appraisal acts as an incentive to employees to improve their performance, develop new qualities and secure higher positions in the org. the employee with merit may be given special increments or promotion to higher position. This motivates others to improve their performance and qualities for similar benefits.
• Effective training programme: performance appraisal suggests the drawbacks and other weaknesses of employees. It is possible to remove such common weaknesses and deficiencies of employees by adjusting their training programmes accordingly.
• Introduction of Sound Personnel Policies: transfers, promotions, wage rates and dismissal are the different areas of personnel management. These personnel policies are directly connected with the performance appraisal of employees. Such policies become fair, impartial and acceptable to emp. When they are based on performance appraisal.
• Cordial Employer-Employees Relation: performance appraisal avoids or at least minimizes grievances of employees as regards promotions, transfers, increments etc. Employees develop a sense of confidence that injustice will not be done to any employee as performance appraisal system is based on sound principles. Management is also not in a position to make partiality/ favouratism when performance appraisal records are maintained properly and used when required.
• Human Resource Planning and Development: performance appraisal facilitates human resource planning and development. It suggests the type of manpower
available. It is also possible to train or develop the existing manpower as per the future needs of the enterprise. This is possible through training and exec. Development programmes.
• Employee Communication: performance appraisal facilitates direct communication with the employees through appraisal interview and post appraisal interviews. Such communication guides emp. And also provides more info. to the mgmt. regarding the expectations and feelings of the employees.
• High Employee Morale: scientific and impartial appraisal gets the support from the employees. They feel that the mgmt. gives due importance to them and is genuinely interested I their career development and well being, this creates positive impact on the mental make-up of employees. They treat mgmt. as their friend, guide and well wisher. This raises the morale.
dk2424
DK 2424
Performance appraisal
Meaning and definition of performance appraisal and its objectives
In simple terms, appraisal may be understood as the assessment of an individual’s performance in a systematic way, the performance being measured against such factors as job knowledge, quality, and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health, and the like. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed.
DEFINITIONS OF PERFORMANCE APPRAISAL:
A formal definition of performance appraisal is:
“It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development.”
A more comprehensive definition is:
“Performance appraisal is a formal, structured system of measuring and evaluating an employee’s job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society all benefit.”
The second definition includes employee’s behavior as part of the assessment. Behavior can be active or passive. Either way behavior affects job results. The other terms used for performance appraisal are: performance rating, employee assessment, employee performance review, personnel appraisal, performance evaluation, employee evaluation, and merit rating. In a formal sense, employee assessment is as old as the concept of management, and in an informal sense, it is probably as old as mankind. Nor performance appraisal is done in isolation. It is linked to job analysis.
TERMS USED IN PERFORMANCE APPRAISAL:
(1) Performance Appraisal: It is the assessment of an individual's performance in a
systematic manner in relation to the job assigned.
(2) Appraisal Process: It involves various steps need to be taken in order to complete
the appraisal work in an orderly manner.
(3) Ratee: Ratee may be defined as the individual, work group, division or organisation
used for appraisal purpose.
(4) Rater: Rater is immediate supervisors, specialists from HR department,
subordinates, peers, clients or committees to whom the responsibility of appraisal is
assigned.
(5) Performance Interview: It is one step in appraisal process. After completion of
appraisal work, performance interview is arranged. Here, the raters should discuss
and review the performance with the ratees, so that they will receive feedback for
their information and self development. Also called post appraisal interview.
PURPOSES OF PERFORMANCE APPRAISAL:
Performance appraisal of employees is needed for the following two broad purposes:
(A) Administrative purposes; and (B) Self-improvement/Self-development of employees.
(A) Administrative Purposes:
(1) Promotion and Placement of Employees: One major administrative purpose of performance appraisal is to promote employees as per their competence and
performance in the previous period. Quality of performance serves as a base for
promotion particularly when promotions are given by merits. Appraisal indicates
whether the employee can contribute still more at a higher level job and accordingly
decision about his promotion is taken. This promotion on appraisal basis is in the
interest of both-the management and employees. Performance appraisal is useful
for the selection of right person for the right type of promotion. This is because it
clearly distinguishes between effective and ineffective performers of jobs assigned Placement of an employee in the right department and also at the right position is possible through performance appraisal as such appraisal suggests the position at which an employee can give his best performance. Performance appraisal is not useful for initial placement but is certainly useful for subsequent placements or even for job change.
(2) Transfers and Demotions: In an organisation, certain personnel actions such as \
transfers, demotions, disciplinary actions and discharges are required to be taken ,
by the management. Such actions need to be taken in a fair and impartial manner. ]
Here, performance appraisal reports can be used for taking final decisions. A
suitable employee for the transfer can be selected by using the performance
appraisal reports. Performance appraisal is also useful for the identification of
employees for deputation, for allowing an employee to cross efficiency bar and also
for the confirmation of the employees in an organisation. Finally, performance
appraisal is useful as a criterion for validating selection devices and training
programmes. In brief, various personnel decisions and actions can be taken
correctly and even justified forcefully when taken on fair and impartial performance
appraisal.
(3) Wage and Salary Payment: Wage/salary payment is normally linked with the
performance appraisal. Wage increase (yearly increment or special increments) is
based on the performance appraisal reports. It also provides the rational
foundation for the payment of wages, bonus, etc. Wage payment is normally related
to the contribution of employees at the work place. Better performance at the
managerial level is normally rewarded by additional salary payment. For judging
the performance of executives, periodical appraisal is essential. It is a fact that
wages are linked with many other factors such as cost of living and profitability of a
business unit. Along with this, performance appraisal is given due weightage. It is
also useful for allocating rewards to deserving employees.
(4) Training and Manpower Development Programmes: Performance appraisal
indicates the strengths and weaknesses of an employee. It acts as a performance
feedback of employees which can be used for different purposes. This information
can be used fruitfully for formulating a suitable training and manpower
development programmes to improve the performance of employees in their
present jobs. Such appraisals also suggest the areas of skills where numerous
employees are not upto the mark. This enables the management to adjust the
training programme which will be useful to employees for self-improvement also to
the organisation in raising overall efficiency. Performance appraisal also suggests
the managers with potentials to learn and develop quickly. Such managers can be
given special training for executive development. They may be even sent to
specialised institutions for training purposes. In brief, performance appraisal
reports can be used effectively for purposeful training and manpower/career
development programmes so as to improve the quality of present labour force
employed.
(5) Personnel Research: Performance appraisal serves as a feedback to the
management in the field of personnel research. It serves as a base for the conduct of
research activities in personnel management. Various theories regarding incentives
to employees, training of employees, selection of employees and motivation of
employees developed through such research activities. The appraisal system gives
valuable information which can used purposefully in personnel management.
(6) Favourable Impact on Employees: Performance appraisal creates a favourable
impact on the employees. It serves as an incentive to the employees who feel
assured of the management's continued interest in them and of their continuous
possibility to grow/develop. Employees feel that they are given attention by the
management. They get a feeling that performance appraisal record will be taken
into consideration for their promotion, training, etc., and that injustice will not be
done to them. Sincere and honest employees get a moral support through such
appraisal. Supervisors may be transferred /shifted but the appraisal reports will
avoid injustice to employees. In brief, performance appraisal creates a favourable
impact on employees. It raises their morale and offers opportunities of career
development to officers, executives and supervisors. Performance appraisal acts as
feedback which gives the employee an opportunity to improve his performance and
raise his competence for promotion.
(7) Miscellaneous Administrative Purposes:
(a) To confirm the services of probationary employees after the completion of
probationary period successfully.
(b) To improve internal communication. It provides a format for dialogue
between the superior and subordinates.
(c) To determine whether HR programmes (selection, training, transfers) have
been effective or not.
Meaning and definition of performance appraisal and its objectives
In simple terms, appraisal may be understood as the assessment of an individual’s performance in a systematic way, the performance being measured against such factors as job knowledge, quality, and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility, health, and the like. Assessment should not be confined to past performance alone. Potentials of the employee for future performance must also be assessed.
DEFINITIONS OF PERFORMANCE APPRAISAL:
A formal definition of performance appraisal is:
“It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development.”
A more comprehensive definition is:
“Performance appraisal is a formal, structured system of measuring and evaluating an employee’s job related behaviors and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization, and society all benefit.”
The second definition includes employee’s behavior as part of the assessment. Behavior can be active or passive. Either way behavior affects job results. The other terms used for performance appraisal are: performance rating, employee assessment, employee performance review, personnel appraisal, performance evaluation, employee evaluation, and merit rating. In a formal sense, employee assessment is as old as the concept of management, and in an informal sense, it is probably as old as mankind. Nor performance appraisal is done in isolation. It is linked to job analysis.
TERMS USED IN PERFORMANCE APPRAISAL:
(1) Performance Appraisal: It is the assessment of an individual's performance in a
systematic manner in relation to the job assigned.
(2) Appraisal Process: It involves various steps need to be taken in order to complete
the appraisal work in an orderly manner.
(3) Ratee: Ratee may be defined as the individual, work group, division or organisation
used for appraisal purpose.
(4) Rater: Rater is immediate supervisors, specialists from HR department,
subordinates, peers, clients or committees to whom the responsibility of appraisal is
assigned.
(5) Performance Interview: It is one step in appraisal process. After completion of
appraisal work, performance interview is arranged. Here, the raters should discuss
and review the performance with the ratees, so that they will receive feedback for
their information and self development. Also called post appraisal interview.
PURPOSES OF PERFORMANCE APPRAISAL:
Performance appraisal of employees is needed for the following two broad purposes:
(A) Administrative purposes; and (B) Self-improvement/Self-development of employees.
(A) Administrative Purposes:
(1) Promotion and Placement of Employees: One major administrative purpose of performance appraisal is to promote employees as per their competence and
performance in the previous period. Quality of performance serves as a base for
promotion particularly when promotions are given by merits. Appraisal indicates
whether the employee can contribute still more at a higher level job and accordingly
decision about his promotion is taken. This promotion on appraisal basis is in the
interest of both-the management and employees. Performance appraisal is useful
for the selection of right person for the right type of promotion. This is because it
clearly distinguishes between effective and ineffective performers of jobs assigned Placement of an employee in the right department and also at the right position is possible through performance appraisal as such appraisal suggests the position at which an employee can give his best performance. Performance appraisal is not useful for initial placement but is certainly useful for subsequent placements or even for job change.
(2) Transfers and Demotions: In an organisation, certain personnel actions such as \
transfers, demotions, disciplinary actions and discharges are required to be taken ,
by the management. Such actions need to be taken in a fair and impartial manner. ]
Here, performance appraisal reports can be used for taking final decisions. A
suitable employee for the transfer can be selected by using the performance
appraisal reports. Performance appraisal is also useful for the identification of
employees for deputation, for allowing an employee to cross efficiency bar and also
for the confirmation of the employees in an organisation. Finally, performance
appraisal is useful as a criterion for validating selection devices and training
programmes. In brief, various personnel decisions and actions can be taken
correctly and even justified forcefully when taken on fair and impartial performance
appraisal.
(3) Wage and Salary Payment: Wage/salary payment is normally linked with the
performance appraisal. Wage increase (yearly increment or special increments) is
based on the performance appraisal reports. It also provides the rational
foundation for the payment of wages, bonus, etc. Wage payment is normally related
to the contribution of employees at the work place. Better performance at the
managerial level is normally rewarded by additional salary payment. For judging
the performance of executives, periodical appraisal is essential. It is a fact that
wages are linked with many other factors such as cost of living and profitability of a
business unit. Along with this, performance appraisal is given due weightage. It is
also useful for allocating rewards to deserving employees.
(4) Training and Manpower Development Programmes: Performance appraisal
indicates the strengths and weaknesses of an employee. It acts as a performance
feedback of employees which can be used for different purposes. This information
can be used fruitfully for formulating a suitable training and manpower
development programmes to improve the performance of employees in their
present jobs. Such appraisals also suggest the areas of skills where numerous
employees are not upto the mark. This enables the management to adjust the
training programme which will be useful to employees for self-improvement also to
the organisation in raising overall efficiency. Performance appraisal also suggests
the managers with potentials to learn and develop quickly. Such managers can be
given special training for executive development. They may be even sent to
specialised institutions for training purposes. In brief, performance appraisal
reports can be used effectively for purposeful training and manpower/career
development programmes so as to improve the quality of present labour force
employed.
(5) Personnel Research: Performance appraisal serves as a feedback to the
management in the field of personnel research. It serves as a base for the conduct of
research activities in personnel management. Various theories regarding incentives
to employees, training of employees, selection of employees and motivation of
employees developed through such research activities. The appraisal system gives
valuable information which can used purposefully in personnel management.
(6) Favourable Impact on Employees: Performance appraisal creates a favourable
impact on the employees. It serves as an incentive to the employees who feel
assured of the management's continued interest in them and of their continuous
possibility to grow/develop. Employees feel that they are given attention by the
management. They get a feeling that performance appraisal record will be taken
into consideration for their promotion, training, etc., and that injustice will not be
done to them. Sincere and honest employees get a moral support through such
appraisal. Supervisors may be transferred /shifted but the appraisal reports will
avoid injustice to employees. In brief, performance appraisal creates a favourable
impact on employees. It raises their morale and offers opportunities of career
development to officers, executives and supervisors. Performance appraisal acts as
feedback which gives the employee an opportunity to improve his performance and
raise his competence for promotion.
(7) Miscellaneous Administrative Purposes:
(a) To confirm the services of probationary employees after the completion of
probationary period successfully.
(b) To improve internal communication. It provides a format for dialogue
between the superior and subordinates.
(c) To determine whether HR programmes (selection, training, transfers) have
been effective or not.
dk2424
DK 2424
CASE STUDY
APPRAISAL LINKED TO ANNUAL INCREMENT:
LITCO is the name of a small proprietary concern manufacturing plastic buckets of different sizes. The concern is doing good business and workers are paid fair wages. Total strength of employees is \ 85 including three supervisors, one assistant manager and one manager. The proprietor Mr. Shinde is a businessman cum politician but ensures that the business unit operates smoothly and make! reasonably good profit. This business unit started operations in the year 1994. The rules and practices are developed gradually with suitable modifications as and when necessary.
The employees of the concern are rated by supervisors by means of graphic scale. The factors to be considered for rating are performance at work, loyalty, dependability, community activity, initiative, regularity, punctuality, potentiality to develop, relations with co-workers and creative ability. The rating factors, method of rating, time of rating, etc. are made clear to workers through notice, circular and departmental meetings. Yearly increment, promotion and annual prizes are based on the performance of workers as per this method.
This system was accepted by workers for a period of six years since its introduction in 1996. There was no criticism or opposition to the scheme till 2001. However, in 2002, the situation changed and the whole performance appraisal system became a cause of conflict in the labour-management relations.
In the year 2002, five employees were denied annual increment due to their low ratings. They, along with few others, met the owner Mr. Shinde and expressed their dissatisfaction with the rating they have received. They argued that some considerations in the ratings are vague and are unfair to workers. They made reference to "community service" and argue that such service is not a part of their normal job and what they do off - the job is none of the employer's business. They also argued that loyalty and relations with co-workers as considerations for rating are confusing. In addition, they argued that annual increment should not be linked with this performance appraisal. Annual increment should be given to all workers as a reward for year's service and for meeting growing expenditure of workers. Workers and their families are very much affected when yearly increment of Rs. 100 is denied to them. For workers, wage payment is the only source of income and yearly increase in the salary is a source of pleasure to them. They get psychological satisfaction because of such increase. Workers urge Mr. Shinde to be sympathetic in this regard. One worker also hinted that workers may be required to form a union if the injustice in regard to performance appraisal is not removed.
This discussion convinced Mr. Shinde and his manager that present rating system was a dangerous source of friction and that its disadvantages out-weighed its advantages.
Mr. Shinde (being a politician also) noted indirect threat of union formation in his unit and was cautious in his approach. He preferred dignified retreat. After few days, he announced the decision to delink annual increment with performance appraisal. However, the rating system was given continuation with some modifications. Moreover, the possibility of promotions were rare, the rating system was not likely to create new problems for workers and employer. This is how Mr. Shinde solved the problem relating to performance appraisal tactfully and also peacefully. Workers were happy and their respect for Mr. Shinde also increased to some extent.
Questions:
(1) Do you feel that annual increment should be based on performance appraisal?
(2) What is your opinion about "community activity" as one consideration in rating system?
(3) Do you agree with the decision taken by Mr.Shinde on the disputed issue? Is it a practical decision?
(4) Do you feel that too much importance need not be given to performance appraisal in small
factories/production units?
(5) What are the possible consequences if Mr. Shinde had refused to amend his performance appraisal
method?
Possible Answers:
(1) At present, annual increment is given in a routine way to all categories of labour force though management
can link it with performance appraisal. Annual increase in the salary has economic, social and
psychological justification. Its refusal affects workers and their family members. It also makes workers
angry, dissatisfied and non-co-operative. Hence, annual increment should be given to all workers and
should not be linked with performance appraisal.
(2) "Community Activity" as a consideration in the graphic scale appears to be redundant for appraisal
purpose. This issue is not directly concerned with factory work. Secondly, reliable information on this
consideration may not be available. Thirdly, majority of workers are not participating in this activity and
naturally their marking will be "below average". Finally, there is opposition to this consideration and may
lead to controversy if the management remains adamant on the matter.
(3) The decision taken by Mr. Shinde on the issue was wise and practical. Increment need not be linked with
performance as it is not a normal practice. Similarly, minor adjustment in the appraisal system does not
defeat its purpose. Omitting one or two considerations from the rating system will not make the system
defective. Moreover, considerations which are ambiguous should not be selected for appraisal purpose.
Mr. Shinde's decision is a practical one and also useful for cordial industrial relations.
(4) Performance appraisal is important and offers many benefits particularly in large organisation which
employs huge manpower. However, in small units, workers are limited, chances of promotion are very
few and there is limited scope for the use of results of performance appraisal. However, the system should
be there as it is one of the rights of the management. Mr.Shinde has continued the system but too much
importance is not attached to the system. The system is necessary as it keeps a check on the employees.
(5) Mr. Shinde had every right to be firm on the issue of performance appraisal and refuse to accept the views
expressed by workers. However, the possible consequences are likely to be serious. Here, workers may
start an agitation or may not offer necessary co-operation in the production work. They may form a union
in order to fight collectively. Outside leadership may also come in the picture. The cordial industrial
relations may be replaced by hostile relations. This is as good as inviting new problems. There may be
stoppage of production and profitability may go down. Taking strong stand means paying heavy price on
minor issue. Mr. Shinde has avoided this situation.
APPRAISAL LINKED TO ANNUAL INCREMENT:
LITCO is the name of a small proprietary concern manufacturing plastic buckets of different sizes. The concern is doing good business and workers are paid fair wages. Total strength of employees is \ 85 including three supervisors, one assistant manager and one manager. The proprietor Mr. Shinde is a businessman cum politician but ensures that the business unit operates smoothly and make! reasonably good profit. This business unit started operations in the year 1994. The rules and practices are developed gradually with suitable modifications as and when necessary.
The employees of the concern are rated by supervisors by means of graphic scale. The factors to be considered for rating are performance at work, loyalty, dependability, community activity, initiative, regularity, punctuality, potentiality to develop, relations with co-workers and creative ability. The rating factors, method of rating, time of rating, etc. are made clear to workers through notice, circular and departmental meetings. Yearly increment, promotion and annual prizes are based on the performance of workers as per this method.
This system was accepted by workers for a period of six years since its introduction in 1996. There was no criticism or opposition to the scheme till 2001. However, in 2002, the situation changed and the whole performance appraisal system became a cause of conflict in the labour-management relations.
In the year 2002, five employees were denied annual increment due to their low ratings. They, along with few others, met the owner Mr. Shinde and expressed their dissatisfaction with the rating they have received. They argued that some considerations in the ratings are vague and are unfair to workers. They made reference to "community service" and argue that such service is not a part of their normal job and what they do off - the job is none of the employer's business. They also argued that loyalty and relations with co-workers as considerations for rating are confusing. In addition, they argued that annual increment should not be linked with this performance appraisal. Annual increment should be given to all workers as a reward for year's service and for meeting growing expenditure of workers. Workers and their families are very much affected when yearly increment of Rs. 100 is denied to them. For workers, wage payment is the only source of income and yearly increase in the salary is a source of pleasure to them. They get psychological satisfaction because of such increase. Workers urge Mr. Shinde to be sympathetic in this regard. One worker also hinted that workers may be required to form a union if the injustice in regard to performance appraisal is not removed.
This discussion convinced Mr. Shinde and his manager that present rating system was a dangerous source of friction and that its disadvantages out-weighed its advantages.
Mr. Shinde (being a politician also) noted indirect threat of union formation in his unit and was cautious in his approach. He preferred dignified retreat. After few days, he announced the decision to delink annual increment with performance appraisal. However, the rating system was given continuation with some modifications. Moreover, the possibility of promotions were rare, the rating system was not likely to create new problems for workers and employer. This is how Mr. Shinde solved the problem relating to performance appraisal tactfully and also peacefully. Workers were happy and their respect for Mr. Shinde also increased to some extent.
Questions:
(1) Do you feel that annual increment should be based on performance appraisal?
(2) What is your opinion about "community activity" as one consideration in rating system?
(3) Do you agree with the decision taken by Mr.Shinde on the disputed issue? Is it a practical decision?
(4) Do you feel that too much importance need not be given to performance appraisal in small
factories/production units?
(5) What are the possible consequences if Mr. Shinde had refused to amend his performance appraisal
method?
Possible Answers:
(1) At present, annual increment is given in a routine way to all categories of labour force though management
can link it with performance appraisal. Annual increase in the salary has economic, social and
psychological justification. Its refusal affects workers and their family members. It also makes workers
angry, dissatisfied and non-co-operative. Hence, annual increment should be given to all workers and
should not be linked with performance appraisal.
(2) "Community Activity" as a consideration in the graphic scale appears to be redundant for appraisal
purpose. This issue is not directly concerned with factory work. Secondly, reliable information on this
consideration may not be available. Thirdly, majority of workers are not participating in this activity and
naturally their marking will be "below average". Finally, there is opposition to this consideration and may
lead to controversy if the management remains adamant on the matter.
(3) The decision taken by Mr. Shinde on the issue was wise and practical. Increment need not be linked with
performance as it is not a normal practice. Similarly, minor adjustment in the appraisal system does not
defeat its purpose. Omitting one or two considerations from the rating system will not make the system
defective. Moreover, considerations which are ambiguous should not be selected for appraisal purpose.
Mr. Shinde's decision is a practical one and also useful for cordial industrial relations.
(4) Performance appraisal is important and offers many benefits particularly in large organisation which
employs huge manpower. However, in small units, workers are limited, chances of promotion are very
few and there is limited scope for the use of results of performance appraisal. However, the system should
be there as it is one of the rights of the management. Mr.Shinde has continued the system but too much
importance is not attached to the system. The system is necessary as it keeps a check on the employees.
(5) Mr. Shinde had every right to be firm on the issue of performance appraisal and refuse to accept the views
expressed by workers. However, the possible consequences are likely to be serious. Here, workers may
start an agitation or may not offer necessary co-operation in the production work. They may form a union
in order to fight collectively. Outside leadership may also come in the picture. The cordial industrial
relations may be replaced by hostile relations. This is as good as inviting new problems. There may be
stoppage of production and profitability may go down. Taking strong stand means paying heavy price on
minor issue. Mr. Shinde has avoided this situation.
hrthep2009
New member
Hi
I read some opinion in this topic. I agree with some but I recommend that we can find out some articles at citehr.com by searching.
Rgs
I read some opinion in this topic. I agree with some but I recommend that we can find out some articles at citehr.com by searching.
Rgs