Description
The documentation explains about the performance appraisal human resource management activities.
Performance appraisal is the process of obtaining, analyzing & recording information about the relative worth of an employee. The focus of the performance appraisal is measuring & improving the actual performance of the employee and also the future potential of the employee. Performance appraisal is a systematic way of reviewing & assessing the performance of an employee during a given period of time and planning for his future. Flippo says, a prominent personality in the field of Human resources, "performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job." It is a powerful tool to standardize, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. The other terms used for performance appraisal are: performance rating, employee assessment, employee performance review, personnel appraisal, performance evaluation, employee evaluation, and merit rating. Performance Appraisal’s Objectives a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior – subordinates and management – employees. To effect promotions based on competence and performance. To confirm the services of probationary employees upon they’re completing the probationary period. To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. To assess the training and development needs of employees. To provide feedback to the employees regarding their past performance. To decide upon a pay raise where regular pay scales have not been fixed. Provide information to assist in the other personal decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To let the employees know where they stand in so far as their performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To improve communication, Performance appraisal provides a format for dialogue between the superior and the subordinate, and improves understanding of personal goals and concerns. To reduce the grievances of the employees.
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q. Performance appraisal can be used to determine whether human resource programmers such as selection, training, and transfers have been effective or not. Purpose of Performance Appraisal According to Survey According to a recent survey, the percentage of organisations (out of the total organisations surveyed i.e. 50) using performance appraisal for the various purposes are as shown in the diagram below:
Purpose of Performance Appraisal in %age
90%
80%
80%
76% 71%
70% 60% 50%
49% 42%
%age
40% 30% 20% 10% 0% Making Payroll and Compensation Decisions Training and Identifying the Gaps in Deciding Future Goals Development Needs Desired and Actual and Course of Action Performance and its Cause Purposes Promotions, Demotions and Transfers Other Purposes
6%
Where; a. Making payroll and compensation decisions – 80% b. Training and development needs – 71% c. Identifying the gaps in desired and actual performance and its cause – 76% d. Deciding future goals and course of action – 42% e. Promotions, demotions and transfers – 49% f. Other purposes – 6% (including job analysis and providing superior support, assistance and counselling) Processes of Performance Appraisal
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Establishing Standards
Performance
The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set terms. Communicating the Standards and Expectations The second step in the process of performance appraisal is the responsibility of the management to communicate the standards to all the employees of the organization. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators. Measuring the Actual Performance The third step in the process of performance appraisal is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process. Comparing with Standards should be clear easily understandable and in measurable
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The forth step in the process of performance appraisal is comparing with the standard performance. The comparison tells the differences in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance describing a negative difference in the organizational performance. Discussing Results (Providing Feedback) The fifth step in the process of performance appraisal is the appraisal’s results are communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems & the possible solutions are discussed with the aim of problem solving and reaching consensus. Decision Making – taking corrective actions The last but not least step in the process of performance appraisal to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.
[Source: http://appraisals.naukrihub.com/process.html]
Pre-Requisites for Effective & Successful Performance Appraisal The essentials of an effective performance system are as follows: Documentation – means continuous noting & documenting the performance. It also helps the evaluators to give a proof and the basis of their ratings. Standards/Goals – the standards set should be clear easy to understand, achievable, motivating, time bound and measurable. Practical and Simple Format - The appraisal format should be simple, clear, fair and objective. Long and complicated formats are time consuming, difficult to understand, and do not elicit much useful information. Evaluation Technique – An appropriate evaluation technique should be selected; the appraisal system should be performance based and uniform. The criteria for evaluation should be based on observable and measurable characteristics of the behaviour of the employee.
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Communication – Communication is an essential part of the Performance Appraisal process. The desired behaviour or the expected results should be communicated to the employees as well as the evaluators. Communication also plays an important role in the review or feedback meeting. Open communication system motivates the employees to actively participate in the appraisal process. Feedback – The purpose of the feedback should be developmental rather than judgmental. To maintain its utility, timely feedback should be provided to the employees and the manner of giving feedback should be such that it should have a motivating effect on the employees’ future performance. Personal Bias – Interpersonal relationships can influence the evaluation and the decisions in the performance appraisal process. Therefore, the evaluators should be trained to carry out the processes of appraisals without personal bias and effectively. Challenges of Performance Appraisal An organization faces various problems & challenges of Performance Appraisal in order to make a PA system effective & successful. The main PA system challenges are following: Determining the Evaluation Criteria Identification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms. Create a Rating Instrument The purpose of the Performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization. Lack of Competence Top management should choose the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively.
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Errors in Rating and Evaluation Many errors based on the personal bias like stereotyping, etc. may slower the appraisal process. Therefore the evaluator should exercise objectivity and fairness in evaluating and rating the performance of the employees. Resistance The appraisal process may face resistance from the employees & the trade unions for the fear of negative ratings. Therefore, the employees should be communicated & clearly explained the purpose as well the process of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/her. Methods of Under Taking the Performance Appraisal There are two types of methods which are normally considered by organizations for under taking successful & effective performance appraisal: a. Traditional Methods b. Modern Methods Now we will discuss these methods more precisely. Traditional Methods Traditional performance appraisal methods have been used for determining & justifying the salaries of the employees. Than it began to be used a tool for determining rewards for example pay rise or pay cut for the past performance of the employees. There are penalty of different ways to conduct performance appraisal under Traditional Methods so now we’ll discuss them one by one. Essay Appraisal Method This traditional form of appraisal also known as "Free Form method" involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator.
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Straight Ranking Method In this method the evaluator ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation. Paired Comparison A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings. Critical Incidents Methods In this method the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behaviour as and when they occur. Field Review In this method a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors’ personal bias. Checklist Method The evaluator is given a checklist of the descriptions of the behaviour of the employees on job. The checklist contains a list of statements on the basis of which the evaluator describes the on the job performance of the employees. Graphic Rating Scale In this method an employee’s quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on the job performance of the employees. For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory.
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Forced Distribution To eliminate the element of bias from the evaluator’s ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. The evaluator chooses the appropriate fit for the categories on his own discretion. Modern Methods The modern methods have made the performance appraisal process more formal and structured. Now the performance appraisal is taken as a tool to identify better performing employees from others, employees’ training needs, career development ways, rewards & bonuses and their promotions to the next levels. Appraisals have become a continuous and periodic activity in the organizations. The results of performance appraisals are used to take various other HR decisions like promotions, demotions, transfers, training and development, reward outcomes. The modern methods to performance appraisals include a feedback process that helps to strengthen the relationships between superiors and subordinates and improve communication throughout the organization. The modern methods to Performance appraisal are future oriented approach and are developmental in nature. This recognizes employees as individuals and focuses on their development. There are different ways to conduct modern performance appraisal which are normally considered by organizations for under taking successful & effective performance appraisal: a. b. c. d. e. f. Assessment Centres Behaviourally Anchored Rating Scales Human Resource Accounting Method Personnel Record Review (PRR) Management by Objective (MBO) Method 360-Degree-Performance-Appraisal Method
Assessment Centres An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators
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observe & evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics. The major competencies that are judged in assessment centres are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centres are also an effective way to determine the training and development needs of the targeted employees. Behaviourally Anchored Rating Scales This is a relatively new technique which combines the graphic rating scale & critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioural statements describing important job performance qualities as good or bad (for e.g. the qualities like inter personal relationships, adaptability and reliability, job knowledge etc). These statements are developed from critical incidents. In this method, an employee’s actual job behaviour is judged against the desired behaviour by recording and comparing the behaviour with BARS. Developing and practicing BARS requires expert knowledge. Human Resource Accounting Method Human resource accounting method tries to find the relative worth of these assets in the terms of money. In this method the Performance appraisal of the employees is judged in terms of cost and contribution of the employees. The cost of employees include all the expenses incurred on them like their compensation, recruitment and selection costs, induction and training costs etc whereas their contribution includes the total value added. The difference between the cost and the contribution will be the performance of the employees. Ideally, the contribution of the employees should be greater than the cost incurred on them. Personnel Record Review (PRR) The Personnel Records Review (PRR) process provides a systematic way of thoroughly and fairly reviewing each employee’s work history to assess many of the
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"will do" attributes that are so important to successful managerial performance. PRR normally used to assess & measure police performance. The PRR uses many of the measurement principles that have made the assessment centre method so successful: evaluation of job-related dimensions, reliance of behavioural evidence, multiple evaluators consulting multiple sources, and a systematic process of integrating information which delays decision making, avoids rating errors, and balances multiple inputs. Job Related Dimensions The PRR begins with a careful job analysis of the key elements of success in the target job. Most police jurisdictions already have a sound job description of target jobs, so the dimensions to be evaluated are probably already known. Other jurisdictions may need to do a new job analysis. One jurisdiction decided to use the following dimensions for the sergeant's examination: Supervisory-Related Education and Experience - This includes any formal or informal education that was related to the job, including external and internal coursework, workshops, and experience inside and outside the organization, e.g., participation in community leadership roles. Disciplined Behaviour - any information about sustained discipline and recorded incidents displaying poor performance or violating regulations; in addition, evidence of demonstrations of good discipline is evaluated favourably. Commendatory Behaviour - formal commendations within the agency and letters from citizen groups. Reliability - Negative evidence might involve unauthorized absence, failure to meet court date, tardiness, failure to meet department standards; positive evidence includes completing tasks on time, volunteering for extra assignments. Each of these dimensions was defined thoroughly, along with examples of behaviours illustrating good and poor performance. Candidates were informed that these dimensions would be evaluated, and panellists were trained to recognize relevant behaviours. How to obtain up given information? The following sources of information can be obtained from target job department: Personnel File with Performance Evaluations - The personnel jacket is examined for behaviour relevant to all of the dimensions.
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Supervisory situation record (SSR) - This is a daily log kept by the immediate supervisor in the candidate's work area; it might include notes on effective performance that does not rise to the level of a commendation, or ineffective performance that does not result in disciplinary action. These entries are like critical incidents, and this source may provide behavioural evidence relevant to all dimensions. Commendation History - These records are kept in the department and list the formal forms of recognition such as awards and citizen letters. Professional History Form - Completed by the candidate, this form allows each person to present any evidence related to the dimensions and explain any entries in the disciplinary record or SSR; this "brag sheet" provides the candidate with the opportunity to make sure all behaviour relevant to the assessed dimensions is presented to the panel.
[Source: http://www.entrepreneur.com/tradejournals/article/73555060_1.html]
Management by Objective (MBO) Method ‘Management by Objectives’ (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed. According to Drucker managers should "avoid the activity trap" get so involved in their daily activities that they forget their main purpose or objective? All managers should following two key points excluding some top managers: a. participate in the strategic planning process, in order to improve the implementability of the plan b. implement a range of performance systems, designed to help the organization stay on the right track The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfil their responsibilities.
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The MBO Processes The principle behind Management by
Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals. Advantages of MBO Some of the important features and advantages of MBO are: Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment. Better Communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain good relationships within the enterprise and also solve many problems faced during the period. Clarity of Goals – With MBO come the concept of SMART goals where: a. S = Specific b. M = Measurable c. A = Achievable d. R = Relevant e. T = Time bound The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees. The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback. The Use of MBO The MBO is useful for the following purposes: a. Knowledge-based enterprises (when staff is competent) b. Where you wish to build employees management and self-leadership skills and tap their creativity, tacit knowledge and initiative. c. Chief Executives of multinational corporations can use for their country managers abroad
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Limitations of MBO There are several limitations of using MBO given below: a. It exaggerates the setting of goals over the working of a plan as a driver of outcomes. b. It underemphasizes the importance of the environment & context in which the goals are set. c. Companies evaluated their employees by comparing them with the "ideal" employee.
[Source: http://appraisals.naukrihub.com/mbo.html] [Source: http://www.1000ventures.com/business_guide/mgmt_mbo_main.html]
360-Degree-Performance-Appraisal Method 360-degree appraisal is a multi-evaluator appraisal and feedback system, where an employee is assessed by a number of assesses including superiors, subordinates, peers, internal customers, and external customers. The concerned persons do the appraisal anonymously and the final assessment is collected by the HRD. These people fill out an anonymous feedback form that asks questions covering a broad range of workplace competencies. The feedback forms include questions that are measured on a rating scale and also ask evaluators to provide written comments. The person receiving feedback also fills out a self-rating survey that includes the same survey questions that others receive in their forms. 360-Degree-Performance-Appraisal Method use to get a better understanding of employees strengths and weaknesses. It can also be a useful development tool for people who are not in a management role. A non-manager 360-Degree-Performance-Appraisal Method is not measuring feedback from 360-Degree-Performance-Appraisal Method since there are no direct reports, but the same principles still apply. 360 Feedback for non-managers is useful to help people be more effective in their current roles, and also to help them understand what areas they should focus on if they want to move into a management role. Components of 360-Degree-Performance-Appraisal Method 360-Degree-Performance-Appraisal Method has four components: a. b. c. d. Self appraisal Superior’s appraisal Subordinate’s appraisal Peer appraisal
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Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, achievements, and judge performance. Superior’s appraisal forms the traditional component of 360-Degree-Performance-Appraisal Method where the employees’ responsibilities and actual performance is rated by the superior. Subordinate’s appraisal uses to judge the employee on the parameters like communication and motivating abilities, and leadership qualities etc. Peer appraisal can help to find employees abilities to work in a team, co-operation and sensitivity towards others. Upward appraisal occurs when employees give information on a manager's performance. 360-Degree-Performance-Appraisal Method is alternative of upward appraisal, and extends the use of appraisers to include people from all around the manager, rather than just reporting staff.
[Source: http://appraisals.naukrihub.com/360-degree-performance-appraisal.html]
Phases of 360-Degree-Performance-Appraisal Method 360-Degree-Performance-Appraisal Method involves following main phases to appraise the employees. a. b. c. d. e. Participants Orientation and Modalities of the Exercise Questionnaire Distribution Monitoring and Follow-up Data Feeding Reports and Analysis Workshop
Uses of 360-Degree-Performance-Appraisal Method Organizations typically use a 360-Degree-Performance-Appraisal Method in one of two ways: 360-Degree-Performance-Appraisal Method as a Development Tool to Help Employees Recognize Strengths, Weaknesses and become more Effective 360-Degree-Performance-Appraisal Method is highly effective as a development tool. The appraisal process gives people an opportunity to provide anonymous feedback to a coworker that they might otherwise be uncomfortable giving. 360-Degree-PerformanceAppraisal Method gives an opportunity to appraise to adjust behaviours and develop skills that will help them to improve at their jobs. 360-Degree-Performance-Appraisal Method Tool to Measure Employee Performance Using a 360-Degree-Performance-Appraisal Method is a common practice but not always a good idea. It is difficult to properly structure a 360 feedback process that creates an
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atmosphere of trust when you use 360 evaluations to measure performance. These things are most appropriately addressed by an employee and his/her manager as part of an annual review and performance appraisal process.
[Source:http://www.custominsight.com/360-degree-feedback/what-is-360-degree-feedback.asp]
Pros and Cons of 360-Degree-Performance-Appraisal Method Benefits a. b. c. d. e. The combination of opinions can approximate to an 'accurate' view Comments expressed by several colleagues tend to carry weight Some skills are best judged by peers and staff, not by manager alone Feedback be motivating for people who undervalue themselves The wider involvement help to engender a more honest organizational culture
Problems a. b. c. d. Can be administratively burdensome Results can be difficult to interpret Feedback can be damaging unless handled carefully and sensitively Can generate an environment of suspicion and cynicism if not managed openly and honestly
Conclusion With the extensive research about performance appraisal, I came to know how it’s helpful in organizations to maintain the quality. This will help conclude about future of the employee in an organization by obtaining, analyzing & recording information. Basically, there are two types of performance appraisal methods been used by employers? Such as Traditional Methods (Essay Appraisal Method, Straight Ranking Method, Paired Comparison, Critical Incidents Methods, Field Review, Checklist Method, Graphic Rating Scale, Forced Distribution) and Modern Methods (Assessment Centres, Behaviourally Anchored Rating Scales, Human Resource Accounting Method, Management by Objective, 360-DegreePerformance-Appraisal Method). Traditional Methods been used in the past, which focused only on the past performance of the employees, so with these methods we can not consider the developmental aspects of the employee performance such as; training & development needs. But now a days the more likely performance appraisal method by organizations specially 360-degree-performance-appraisal method, because its multi ratter by which you can get information form all concern bodies even by employee him/her self and customers as well. So, a 360-degree-performance-appraisal method helps to maintain quality of organization’s objectives, employees and customer needs and wants.
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Performance Appraisal Forms
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doc_538875066.doc
The documentation explains about the performance appraisal human resource management activities.
Performance appraisal is the process of obtaining, analyzing & recording information about the relative worth of an employee. The focus of the performance appraisal is measuring & improving the actual performance of the employee and also the future potential of the employee. Performance appraisal is a systematic way of reviewing & assessing the performance of an employee during a given period of time and planning for his future. Flippo says, a prominent personality in the field of Human resources, "performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job." It is a powerful tool to standardize, refine and reward the performance of the employee. It helps to analyze his achievements and evaluate his contribution towards the achievements of the overall organizational goals. The other terms used for performance appraisal are: performance rating, employee assessment, employee performance review, personnel appraisal, performance evaluation, employee evaluation, and merit rating. Performance Appraisal’s Objectives a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. To review the performance of the employees over a given period of time. To judge the gap between the actual and the desired performance. To help the management in exercising organizational control. Helps to strengthen the relationship and communication between superior – subordinates and management – employees. To effect promotions based on competence and performance. To confirm the services of probationary employees upon they’re completing the probationary period. To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future. To assess the training and development needs of employees. To provide feedback to the employees regarding their past performance. To decide upon a pay raise where regular pay scales have not been fixed. Provide information to assist in the other personal decisions in the organization. Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. To let the employees know where they stand in so far as their performance is concerned and to assist them with constructive criticism and guidance for the purpose of their development. To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To improve communication, Performance appraisal provides a format for dialogue between the superior and the subordinate, and improves understanding of personal goals and concerns. To reduce the grievances of the employees.
1
q. Performance appraisal can be used to determine whether human resource programmers such as selection, training, and transfers have been effective or not. Purpose of Performance Appraisal According to Survey According to a recent survey, the percentage of organisations (out of the total organisations surveyed i.e. 50) using performance appraisal for the various purposes are as shown in the diagram below:
Purpose of Performance Appraisal in %age
90%
80%
80%
76% 71%
70% 60% 50%
49% 42%
%age
40% 30% 20% 10% 0% Making Payroll and Compensation Decisions Training and Identifying the Gaps in Deciding Future Goals Development Needs Desired and Actual and Course of Action Performance and its Cause Purposes Promotions, Demotions and Transfers Other Purposes
6%
Where; a. Making payroll and compensation decisions – 80% b. Training and development needs – 71% c. Identifying the gaps in desired and actual performance and its cause – 76% d. Deciding future goals and course of action – 42% e. Promotions, demotions and transfers – 49% f. Other purposes – 6% (including job analysis and providing superior support, assistance and counselling) Processes of Performance Appraisal
2
Establishing Standards
Performance
The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set terms. Communicating the Standards and Expectations The second step in the process of performance appraisal is the responsibility of the management to communicate the standards to all the employees of the organization. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators. Measuring the Actual Performance The third step in the process of performance appraisal is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process. Comparing with Standards should be clear easily understandable and in measurable
3
The forth step in the process of performance appraisal is comparing with the standard performance. The comparison tells the differences in the performance of the employees from the standards set. The result can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance describing a negative difference in the organizational performance. Discussing Results (Providing Feedback) The fifth step in the process of performance appraisal is the appraisal’s results are communicated and discussed with the employees on one-to-one basis. The focus of this discussion is on communication and listening. The results, the problems & the possible solutions are discussed with the aim of problem solving and reaching consensus. Decision Making – taking corrective actions The last but not least step in the process of performance appraisal to take decisions which can be taken either to improve the performance of the employees, take the required corrective actions, or the related HR decisions like rewards, promotions, demotions, transfers etc.
[Source: http://appraisals.naukrihub.com/process.html]
Pre-Requisites for Effective & Successful Performance Appraisal The essentials of an effective performance system are as follows: Documentation – means continuous noting & documenting the performance. It also helps the evaluators to give a proof and the basis of their ratings. Standards/Goals – the standards set should be clear easy to understand, achievable, motivating, time bound and measurable. Practical and Simple Format - The appraisal format should be simple, clear, fair and objective. Long and complicated formats are time consuming, difficult to understand, and do not elicit much useful information. Evaluation Technique – An appropriate evaluation technique should be selected; the appraisal system should be performance based and uniform. The criteria for evaluation should be based on observable and measurable characteristics of the behaviour of the employee.
4
Communication – Communication is an essential part of the Performance Appraisal process. The desired behaviour or the expected results should be communicated to the employees as well as the evaluators. Communication also plays an important role in the review or feedback meeting. Open communication system motivates the employees to actively participate in the appraisal process. Feedback – The purpose of the feedback should be developmental rather than judgmental. To maintain its utility, timely feedback should be provided to the employees and the manner of giving feedback should be such that it should have a motivating effect on the employees’ future performance. Personal Bias – Interpersonal relationships can influence the evaluation and the decisions in the performance appraisal process. Therefore, the evaluators should be trained to carry out the processes of appraisals without personal bias and effectively. Challenges of Performance Appraisal An organization faces various problems & challenges of Performance Appraisal in order to make a PA system effective & successful. The main PA system challenges are following: Determining the Evaluation Criteria Identification of the appraisal criteria is one of the biggest problems faced by the top management. The performance data to be considered for evaluation should be carefully selected. For the purpose of evaluation, the criteria selected should be in quantifiable or measurable terms. Create a Rating Instrument The purpose of the Performance appraisal process is to judge the performance of the employees rather than the employee. The focus of the system should be on the development of the employees of the organization. Lack of Competence Top management should choose the evaluators carefully. They should have the required expertise and the knowledge to decide the criteria accurately. They should have the experience and the necessary training to carry out the appraisal process objectively.
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Errors in Rating and Evaluation Many errors based on the personal bias like stereotyping, etc. may slower the appraisal process. Therefore the evaluator should exercise objectivity and fairness in evaluating and rating the performance of the employees. Resistance The appraisal process may face resistance from the employees & the trade unions for the fear of negative ratings. Therefore, the employees should be communicated & clearly explained the purpose as well the process of appraisal. The standards should be clearly communicated and every employee should be made aware that what exactly is expected from him/her. Methods of Under Taking the Performance Appraisal There are two types of methods which are normally considered by organizations for under taking successful & effective performance appraisal: a. Traditional Methods b. Modern Methods Now we will discuss these methods more precisely. Traditional Methods Traditional performance appraisal methods have been used for determining & justifying the salaries of the employees. Than it began to be used a tool for determining rewards for example pay rise or pay cut for the past performance of the employees. There are penalty of different ways to conduct performance appraisal under Traditional Methods so now we’ll discuss them one by one. Essay Appraisal Method This traditional form of appraisal also known as "Free Form method" involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator.
6
Straight Ranking Method In this method the evaluator ranks the employees from the best to the poorest on the basis of their overall performance. It is quite useful for a comparative evaluation. Paired Comparison A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings. Critical Incidents Methods In this method the evaluator rates the employee on the basis of critical events and how the employee behaved during those incidents. It includes both negative and positive points. The drawback of this method is that the supervisor has to note down the critical incidents and the employee behaviour as and when they occur. Field Review In this method a senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate their respective subordinates. A major drawback of this method is that it is a very time consuming method. But this method helps to reduce the superiors’ personal bias. Checklist Method The evaluator is given a checklist of the descriptions of the behaviour of the employees on job. The checklist contains a list of statements on the basis of which the evaluator describes the on the job performance of the employees. Graphic Rating Scale In this method an employee’s quality and quantity of work is assessed in a graphic scale indicating different degrees of a particular trait. The factors taken into consideration include both the personal characteristics and characteristics related to the on the job performance of the employees. For example a trait like Job Knowledge may be judged on the range of average, above average, outstanding or unsatisfactory.
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Forced Distribution To eliminate the element of bias from the evaluator’s ratings, the evaluator is asked to distribute the employees in some fixed categories of ratings like on a normal distribution curve. The evaluator chooses the appropriate fit for the categories on his own discretion. Modern Methods The modern methods have made the performance appraisal process more formal and structured. Now the performance appraisal is taken as a tool to identify better performing employees from others, employees’ training needs, career development ways, rewards & bonuses and their promotions to the next levels. Appraisals have become a continuous and periodic activity in the organizations. The results of performance appraisals are used to take various other HR decisions like promotions, demotions, transfers, training and development, reward outcomes. The modern methods to performance appraisals include a feedback process that helps to strengthen the relationships between superiors and subordinates and improve communication throughout the organization. The modern methods to Performance appraisal are future oriented approach and are developmental in nature. This recognizes employees as individuals and focuses on their development. There are different ways to conduct modern performance appraisal which are normally considered by organizations for under taking successful & effective performance appraisal: a. b. c. d. e. f. Assessment Centres Behaviourally Anchored Rating Scales Human Resource Accounting Method Personnel Record Review (PRR) Management by Objective (MBO) Method 360-Degree-Performance-Appraisal Method
Assessment Centres An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators
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observe & evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics. The major competencies that are judged in assessment centres are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centres are also an effective way to determine the training and development needs of the targeted employees. Behaviourally Anchored Rating Scales This is a relatively new technique which combines the graphic rating scale & critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioural statements describing important job performance qualities as good or bad (for e.g. the qualities like inter personal relationships, adaptability and reliability, job knowledge etc). These statements are developed from critical incidents. In this method, an employee’s actual job behaviour is judged against the desired behaviour by recording and comparing the behaviour with BARS. Developing and practicing BARS requires expert knowledge. Human Resource Accounting Method Human resource accounting method tries to find the relative worth of these assets in the terms of money. In this method the Performance appraisal of the employees is judged in terms of cost and contribution of the employees. The cost of employees include all the expenses incurred on them like their compensation, recruitment and selection costs, induction and training costs etc whereas their contribution includes the total value added. The difference between the cost and the contribution will be the performance of the employees. Ideally, the contribution of the employees should be greater than the cost incurred on them. Personnel Record Review (PRR) The Personnel Records Review (PRR) process provides a systematic way of thoroughly and fairly reviewing each employee’s work history to assess many of the
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"will do" attributes that are so important to successful managerial performance. PRR normally used to assess & measure police performance. The PRR uses many of the measurement principles that have made the assessment centre method so successful: evaluation of job-related dimensions, reliance of behavioural evidence, multiple evaluators consulting multiple sources, and a systematic process of integrating information which delays decision making, avoids rating errors, and balances multiple inputs. Job Related Dimensions The PRR begins with a careful job analysis of the key elements of success in the target job. Most police jurisdictions already have a sound job description of target jobs, so the dimensions to be evaluated are probably already known. Other jurisdictions may need to do a new job analysis. One jurisdiction decided to use the following dimensions for the sergeant's examination: Supervisory-Related Education and Experience - This includes any formal or informal education that was related to the job, including external and internal coursework, workshops, and experience inside and outside the organization, e.g., participation in community leadership roles. Disciplined Behaviour - any information about sustained discipline and recorded incidents displaying poor performance or violating regulations; in addition, evidence of demonstrations of good discipline is evaluated favourably. Commendatory Behaviour - formal commendations within the agency and letters from citizen groups. Reliability - Negative evidence might involve unauthorized absence, failure to meet court date, tardiness, failure to meet department standards; positive evidence includes completing tasks on time, volunteering for extra assignments. Each of these dimensions was defined thoroughly, along with examples of behaviours illustrating good and poor performance. Candidates were informed that these dimensions would be evaluated, and panellists were trained to recognize relevant behaviours. How to obtain up given information? The following sources of information can be obtained from target job department: Personnel File with Performance Evaluations - The personnel jacket is examined for behaviour relevant to all of the dimensions.
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Supervisory situation record (SSR) - This is a daily log kept by the immediate supervisor in the candidate's work area; it might include notes on effective performance that does not rise to the level of a commendation, or ineffective performance that does not result in disciplinary action. These entries are like critical incidents, and this source may provide behavioural evidence relevant to all dimensions. Commendation History - These records are kept in the department and list the formal forms of recognition such as awards and citizen letters. Professional History Form - Completed by the candidate, this form allows each person to present any evidence related to the dimensions and explain any entries in the disciplinary record or SSR; this "brag sheet" provides the candidate with the opportunity to make sure all behaviour relevant to the assessed dimensions is presented to the panel.
[Source: http://www.entrepreneur.com/tradejournals/article/73555060_1.html]
Management by Objective (MBO) Method ‘Management by Objectives’ (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed. According to Drucker managers should "avoid the activity trap" get so involved in their daily activities that they forget their main purpose or objective? All managers should following two key points excluding some top managers: a. participate in the strategic planning process, in order to improve the implementability of the plan b. implement a range of performance systems, designed to help the organization stay on the right track The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfil their responsibilities.
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The MBO Processes The principle behind Management by
Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals. Advantages of MBO Some of the important features and advantages of MBO are: Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment. Better Communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain good relationships within the enterprise and also solve many problems faced during the period. Clarity of Goals – With MBO come the concept of SMART goals where: a. S = Specific b. M = Measurable c. A = Achievable d. R = Relevant e. T = Time bound The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees. The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback. The Use of MBO The MBO is useful for the following purposes: a. Knowledge-based enterprises (when staff is competent) b. Where you wish to build employees management and self-leadership skills and tap their creativity, tacit knowledge and initiative. c. Chief Executives of multinational corporations can use for their country managers abroad
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Limitations of MBO There are several limitations of using MBO given below: a. It exaggerates the setting of goals over the working of a plan as a driver of outcomes. b. It underemphasizes the importance of the environment & context in which the goals are set. c. Companies evaluated their employees by comparing them with the "ideal" employee.
[Source: http://appraisals.naukrihub.com/mbo.html] [Source: http://www.1000ventures.com/business_guide/mgmt_mbo_main.html]
360-Degree-Performance-Appraisal Method 360-degree appraisal is a multi-evaluator appraisal and feedback system, where an employee is assessed by a number of assesses including superiors, subordinates, peers, internal customers, and external customers. The concerned persons do the appraisal anonymously and the final assessment is collected by the HRD. These people fill out an anonymous feedback form that asks questions covering a broad range of workplace competencies. The feedback forms include questions that are measured on a rating scale and also ask evaluators to provide written comments. The person receiving feedback also fills out a self-rating survey that includes the same survey questions that others receive in their forms. 360-Degree-Performance-Appraisal Method use to get a better understanding of employees strengths and weaknesses. It can also be a useful development tool for people who are not in a management role. A non-manager 360-Degree-Performance-Appraisal Method is not measuring feedback from 360-Degree-Performance-Appraisal Method since there are no direct reports, but the same principles still apply. 360 Feedback for non-managers is useful to help people be more effective in their current roles, and also to help them understand what areas they should focus on if they want to move into a management role. Components of 360-Degree-Performance-Appraisal Method 360-Degree-Performance-Appraisal Method has four components: a. b. c. d. Self appraisal Superior’s appraisal Subordinate’s appraisal Peer appraisal
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Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, achievements, and judge performance. Superior’s appraisal forms the traditional component of 360-Degree-Performance-Appraisal Method where the employees’ responsibilities and actual performance is rated by the superior. Subordinate’s appraisal uses to judge the employee on the parameters like communication and motivating abilities, and leadership qualities etc. Peer appraisal can help to find employees abilities to work in a team, co-operation and sensitivity towards others. Upward appraisal occurs when employees give information on a manager's performance. 360-Degree-Performance-Appraisal Method is alternative of upward appraisal, and extends the use of appraisers to include people from all around the manager, rather than just reporting staff.
[Source: http://appraisals.naukrihub.com/360-degree-performance-appraisal.html]
Phases of 360-Degree-Performance-Appraisal Method 360-Degree-Performance-Appraisal Method involves following main phases to appraise the employees. a. b. c. d. e. Participants Orientation and Modalities of the Exercise Questionnaire Distribution Monitoring and Follow-up Data Feeding Reports and Analysis Workshop
Uses of 360-Degree-Performance-Appraisal Method Organizations typically use a 360-Degree-Performance-Appraisal Method in one of two ways: 360-Degree-Performance-Appraisal Method as a Development Tool to Help Employees Recognize Strengths, Weaknesses and become more Effective 360-Degree-Performance-Appraisal Method is highly effective as a development tool. The appraisal process gives people an opportunity to provide anonymous feedback to a coworker that they might otherwise be uncomfortable giving. 360-Degree-PerformanceAppraisal Method gives an opportunity to appraise to adjust behaviours and develop skills that will help them to improve at their jobs. 360-Degree-Performance-Appraisal Method Tool to Measure Employee Performance Using a 360-Degree-Performance-Appraisal Method is a common practice but not always a good idea. It is difficult to properly structure a 360 feedback process that creates an
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atmosphere of trust when you use 360 evaluations to measure performance. These things are most appropriately addressed by an employee and his/her manager as part of an annual review and performance appraisal process.
[Source:http://www.custominsight.com/360-degree-feedback/what-is-360-degree-feedback.asp]
Pros and Cons of 360-Degree-Performance-Appraisal Method Benefits a. b. c. d. e. The combination of opinions can approximate to an 'accurate' view Comments expressed by several colleagues tend to carry weight Some skills are best judged by peers and staff, not by manager alone Feedback be motivating for people who undervalue themselves The wider involvement help to engender a more honest organizational culture
Problems a. b. c. d. Can be administratively burdensome Results can be difficult to interpret Feedback can be damaging unless handled carefully and sensitively Can generate an environment of suspicion and cynicism if not managed openly and honestly
Conclusion With the extensive research about performance appraisal, I came to know how it’s helpful in organizations to maintain the quality. This will help conclude about future of the employee in an organization by obtaining, analyzing & recording information. Basically, there are two types of performance appraisal methods been used by employers? Such as Traditional Methods (Essay Appraisal Method, Straight Ranking Method, Paired Comparison, Critical Incidents Methods, Field Review, Checklist Method, Graphic Rating Scale, Forced Distribution) and Modern Methods (Assessment Centres, Behaviourally Anchored Rating Scales, Human Resource Accounting Method, Management by Objective, 360-DegreePerformance-Appraisal Method). Traditional Methods been used in the past, which focused only on the past performance of the employees, so with these methods we can not consider the developmental aspects of the employee performance such as; training & development needs. But now a days the more likely performance appraisal method by organizations specially 360-degree-performance-appraisal method, because its multi ratter by which you can get information form all concern bodies even by employee him/her self and customers as well. So, a 360-degree-performance-appraisal method helps to maintain quality of organization’s objectives, employees and customer needs and wants.
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Performance Appraisal Forms
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