CONTENTS
Critical incident method Weighted checklist method
Disadvantages :--
This format is considered the oldest and most popular method to assess the employee’s performance.
Advantages
:--
Disadvantages :--
Advantages :--
Several managers have employed this management technique and have applied it to their company. These managers include Mukesh Ambani, Don Sheelen and Steve Jobs.
1. Positive and active participation from
subordinates is not easily forth forthcoming.
2. Truly verifiable goals are bot easy to formalise
3. Emphasis is put in short-range goals, whereas long-range goals are avoided, tough long-range goals are vital for growth and development of the organization
4. Goals remain inflexible and rigid. For example, changes desirable in annual budgets are not easily accepted in the middle of the year.
5. Over-use of quantitative goals jeopardizes the qualitative aspect which may more important than quantification in some cases.
Introduction of performance appraisal
Modern appraisal
What is performance appraisal?
Why use performance appraisal?
Why are appraisal important?
Definition of performance appraisal
Basic purpose of performance appraisal
Benefits of performance appraisal
Process of performance appraisal
Objectives of performance appraisal
Advantages of performance appraisal
Disadvantages of performance appraisal
Performance appraisal methods
Advantages and Disadvantages of performance
appraisal methods
Summary
Bibliography
Introduction of performance appraisal
The history of performance appraisal is quite
brief. Its roots in the early 20th century can be traced to Taylor's
pioneering Time and Motion studies. But this is not very helpful, for the same
may be said about almost everything in the field of modern human resources
management.
As a distinct and formal management procedure
used in the evaluation of work performance, appraisal really dates from the
time of the Second World War - not more than 60 years ago.
Yet in a broader sense, the practice of appraisal is a very ancient art. In the
scale of things historical, it might well lay claim to being the world's second
oldest profession.
Performance appraisal systems began as simple
methods of income justification. That is, appraisal was used to decide whether
or not the salary or wage of an individual employee was justified.
Modern Appraisal
Performance appraisal may be defined as a
structured formal interaction between a subordinate and supervisor, that
usually takes the form of a periodic interview (annual or semi-annual), in
which the work performance of the subordinate is examined and discussed, with a
view to identifying weaknesses and strengths as well as opportunities for
improvement and skills development.
In many organizations - but not all -
appraisal results are used, either directly or indirectly, to help determine
reward outcomes. That is, the appraisal results are used to identify the better
performing employees who should get the majority of available merit pay
increases, bonuses, and promotions.
By
the same token, appraisal results are used to identify the poorer performers
who may require some form of counseling, or in extreme cases, demotion,
dismissal or decreases in pay. (Organizations need to be aware of laws in their
country that might restrict their capacity to dismiss employees or decrease
pay.)
What is performance appraisal?
A
performance appraisal is a balancing act. It should balance the need to look
backwards (the review), with the need to look forwards (the plan). It should
also balance the need to address weaknesses, whilst at the same time building
on strengths.
Remember though, that it's far easier to motivate people to develop something
they can do, than to try to teach them things they can't do. Development needs
should be as much about further improving what someone already does well, as
about correcting weaknesses. Peter Drucker made this point emphatically when he
suggested
"It takes far less energy to move from
first-rate performance to excellence than it does to move from incompetence to
mediocrity."
Why use performance appraisals?
Some of
the reasons why you might like to perform a performance appraisal:
to give employees feedback on their
performance;
to identify employee training needs;
to obtain information which can be used to
assist in the allocation of organisational rewards, eg. pay increases or
bonuses;
to
obtain information which can be used for organisational diagnosis and
development.
Why are appraisals important?
Companies have become aware that the success
of any organization is dependent upon its employees. Following on from this is
the need to recognise who these hard working employees are and to reward them.
For most participants Starfare Images Performance Appraisal System will be
different to the appraisals you have previously undertaken. However, the basis
of any system is to reward staff that provide a quality service in the
workplace.
Definition of performance appraisal
“Performance Appraisal may be defined as any
procedure that involves
a. Setting work standards;
a. Setting work standards;
b. Assessing the employees’ actual performance
related to these standards;
c. providing feedback to the employee with the aim
of motivating that person to eliminate performance deficiencies or to continue
to perform above par”.
Performance Appraisal is the systematic
evaluation of the performance of employees and to understand the abilities of a
person for further growth and development. Performance appraisal is generally
done in systematic ways which are as follows:
The supervisors measure the pay of employees
and compare it with targets and plans.
The supervisor analyses the factors behind
work performances of employees.
The employers are in position to guide the
employees for a better performance.
3. “Performance appraisal involves
identification, measurement and management of human performance in
organization”.
- Balkin and Cardy
4. “Performance appraisal is a
systematic and formal process by means of which the job relevant strength and
weakness of employees are identified, observed, measured recorded and
developed” - Swanepole
5. “Performance appraisal is the process of
systematically evaluating performance and providing feedback upon which
performance adjustments can be made”.
- Schermerhorn, Hunt and Osborn
- Schermerhorn, Hunt and Osborn
Basic purpose of performance appraisal
Effective performance appraisal systems
contain two basic systems operating in conjunction: an evaluation system and a
feedback system.
The main aim of the evaluation system is to
identify the performance gap (if any). This gap is the shortfall that occurs
when performance does not meet the standard set by the organization as
acceptable.
The
main aim of the feedback system is to inform the employee about the quality of
his or her performance. (However, the information flow is not exclusively one
way. The appraisers also receives feedback from the employee about job
problems, etc.)
One of the best ways to appreciate the purposes of performance appraisal is to
look at it from the different viewpoints of the main stakeholders: the employee
and the organization.
Benefits of Appraisal
Benefits of Appraisal
Perhaps the most significant benefit of appraisal is that, in the rush and
bustle of daily working life, it offers a rare chance for a supervisor and
subordinate to have "time out" for a one-on-one discussion of
important work issues that might not otherwise be addressed.
Almost universally, where performance
appraisal is conducted properly, both supervisors and subordinates have
reported the experience as beneficial and positive.
Appraisal offers a valuable opportunity to
focus on work activities and goals, to identify and correct existing problems,
and to encourage better future performance. Thus the performance of the whole
organization is enhanced.
For many employees, an "official"
appraisal interview may be the only time they get to have exclusive,
uninterrupted access to their supervisor. Said one employee of a large
organization after his first formal performance appraisal, "In twenty
years of work, that's the first time anyone has ever bothered to sit down and
tell me how I'm doing."
The
value of this intense and purposeful interaction between a supervisors and
subordinate should not be underestimated.
Process
of performance appraisal
The employees should be informed and the
standards should be clearly explained to the. 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.
Objectives of Performance Appraisal
Performance Appraisal can be done with
following objectives in mind:
To maintain records in order to determine
compensation packages, wage structure, salaries raises, etc.
To identify the strengths and weaknesses of
employees to place right men on right job.
To maintain and assess the potential present
in a person for further growth and development.
To provide a feedback to employees regarding
their performance and related status.
To provide a feedback to employees regarding
their performance and related status.
It serves as a basis for influencing working
habits of the employees.
To review and retain the promotional and other
training programmes.
Advantages of performance appraisal
They provide a record of performance over a
period of time.
They provide an opportunity for a manager to
meet and discuss performance with an employee.
Provide the employee with feedback about their
performance and how they completed their goals.
Provide an opportunity for an employee to
discuss issues and to clarify expectations with their manager.
Offer an opportunity to think about the
upcoming year and develop employee goals.
Can be motivational with the support of a good
reward and compensation system.
Disadvantages of performance appraisal
If not done appropriately, can be a negative
experience.
Are very time consuming, especially for a
manager with many employees.
Are based on human assessment and are subject
to rater errors and biases.
If not done right can be a complete waste of
time.
Can be stressful for all involved.
Performance appraisal methods
Performance appraisal methods include 11
appraisal methods / types as follows:
Critical incident method Weighted checklist method
Paired
comparison analysis method
Graphic rating scales method
Essay Evaluation method
Behaviorally anchored rating scales method
Management By Objectives (MBO) method
Performance ranking method
360 degree performance appraisal
Forced ranking (forced distribution)
Behavioral Observation Scales
Advantages and Disadvantages of performance
appraisal methods
1. Critical incident method ::-
This
format of performance appraisal is a method which is involved identifying and
describing specific incidents where employees did something really well or that
needs improving during their performance period.
ADVANTAGES:--
Critical
incident is a method used for many sectors.
Each employee will be evaluated as such and one’s performance appraisal will be
based on the logs that are put in the evaluation form.
The manager maintains logs on each employee,
whereby he periodically records critical incidents of the workers behavior.
At the end of the rating period, these
recorded critical incidents are used in the evaluation of the workers’
performance.
The critical incidents file of performance
appraisal is a form of documentation that reflect all data about employee
performances.
Disadvantages:--
This method suffers however from the
following limitations:
Critical incidents technique of evaluation is
applied to evaluate the performance of superiors rather than of peers of
subordinates.
Negative incidents may be more noticeable than
positive incidents.
It
results in very close supervision which may not be liked by the employee.
The recording of incidents may be a chore for
the manager concerned, who may be too busy or forget to do it.
The
supervisors have a tendency to unload a series of complaints about incidents
during an annual performance review session.
2. Weighted checklist method :-
In this
style, performance appraisal is made under a method where the jobs being
evaluated based on descriptive statements about effective and ineffective
behavior on jobs.
Advantages
:--
This method help the manager in evaluation of
the performance of the employee.
The
rater may be biased in distinguishing the positive and negative questions. He
may assign biased weights to the questions.
Disadvantages :--
This method also is expensive and time
consuming.
It
becomes difficult for the manager to assemble, analyze and weigh a number of
statements about the employee’s characteristics, contributions and behaviors.
3. Paired comparison analysis method ::-
This form of performance appraisal is a good
way to make full use of the methods of options. There will be a list of
relevant options. Each option is in comparison with the others in the list. The
results will be calculated and then such option with highest score will be
mostly chosen.
Advantages:--
It helps you to set priorities where there are
conflicting demands on your resources.
This makes it easy to choose the most
important problem to solve, or select the solution that will give you the
greatest advantage.
Disadvantages :--
It is useful where priorities are not clear.
It is
particularly useful where you do not have objective data to base this on.
4.
Graphic rating scales method
This format is considered the oldest and most popular method to assess the employee’s performance.
In this style of performance appraisal, the
management just simply does checks on the performance levels of their staff.
Graphic rating scales are less time consuming
to develop.
They also allow for quantitative comparison.
Disadvantages :--
Different supervisors will use the same
graphic scales in slightly different ways.
One way
to get around the ambiguity inherent in graphic rating scales is to use
behavior based scales, in which specific work related behaviors are assessed.
More validity comparing workers ratings from a
single supervisor than comparing two workers who were rated by different
supervisors.
5.
Essay Evaluation method
In this style of performance
appraisal, managers/ supervisors are required to figure out the strong and weak
points of staff’s behaviors. Essay evaluation method is a non-quantitative
technique. It is often mixed with the method the graphic rating scale.
Advantages :--
The essay method is far less structured and
confining than the rating scale method. It permits the appraiser to examine
almost any relevant issue or attribute of performance. This contrasts sharply
with methods where the appraisal criteria are rigidly defined.
Appraisers may place whatever degree of
emphasis on issues or attributes that they feel appropriate. Thus the process
is open-ended and very flexible. The appraiser is not locked into an appraisal
system the limits expression or assumes that employee traits can be neatly
dissected and scaled.
Disadvantages :--
Essay methods are time-consuming and difficult
to administer. Appraisers often find the essay technique more demanding than
methods such as rating scales.
The techniques greatest advantage - freedom of
expression - is also its greatest handicap. The varying writing skills of
appraisers can upset and distort the whole process.
The process is subjective and, in consequence,
it is difficult to compare and contrast the results of individuals or to draw
any broad conclusions about organizational needs.
The techniques greatest advantage - freedom of
expression - is also its greatest handicap. The varying writing skills of
appraisers can upset and distort the whole process.
The process is subjective
and, in consequence, it is difficult to compare and contrast the results of
individuals or to draw any broad conclusions about organizational needs.
Manager
/ supervisor may write a biased essay.
A busy rater may write the essay hurriedly
without properly assessing the actual performance of the worker.
Apart from that, rater takes a long
time, this becomes uneconomical from the view point of the firm, because the
time of rater is costly.
Some evaluators may be poor in writing essays
on employee performance. Others may be superficial in explanation and use
flowery language which may not reflect the actual performance of the employee.
6.
Behaviorally anchored rating scales method
This formatted performance appraisal
is based on making rates on behaviors or sets of indicators to determine the
effectiveness or ineffectiveness of working performance. The form is a mix of
the rating scale and critical incident techniques to assess performance of the
staff.
Advantages & Disadvantages :--
This
method are very useful and exactly.
It is very difficult to develop this method
because you need to identify what is “good level” etc.
7. Management By Objectives (MBO) method
MBO is a method of performance appraisal in
which managers or employers set a list of objectives and make assessments on
their performance on a regular basis, and finally make rewards based on the
results achieved. This method mostly cares about the results achieved (goals)
but not to the way how employees can fulfill them.
Advantages :--
It is
based on the assumption that the individual (employee) knows more than anyone
else about her/his own capabilities, needs, strengths, weaknesses and goals.
A further advantage of MBO is that the
emphasis is on the future rather than on the past. Appraisal thus becomes a
means to a constructive end.
MBO is often achieved using set targets. MBO
introduced the SMART criteria: Objectives for MBO must be SMART (Specific,
Measurable, Achievable, Relevant, and Time-Specific).
Several managers have employed this management technique and have applied it to their company. These managers include Mukesh Ambani, Don Sheelen and Steve Jobs.
Disadvantages:--
2. Truly verifiable goals are bot easy to formalise
3. Emphasis is put in short-range goals, whereas long-range goals are avoided, tough long-range goals are vital for growth and development of the organization
4. Goals remain inflexible and rigid. For example, changes desirable in annual budgets are not easily accepted in the middle of the year.
5. Over-use of quantitative goals jeopardizes the qualitative aspect which may more important than quantification in some cases.
8.
Performance ranking method
The performance appraisal of ranking
is used to assess the working performance of employees from the highest to
lowest levels.
Managers will make comparisons of an employee
with the others, instead of making comparison of each employee with some
certain standards.
9.
360 degree performance appraisal
The style of 360 degree performance
appraisal is a method that employees will give confidential and anonymous
assessments on their colleagues.
Advantages :--
Offer a more comprehensive view towards the
performance of employees.
Improve credibility of performance appraisal.
Such colleague’s feedback will help strengthen
self-development.
Increases responsibilities of employees to
their customers.
The mix of ideas can give a more accurate
assessment.
Opinions gathered from lots of staff are sure
to be more persuasive.
Not only manager should make assessments on
its staff performance but other colleagues should do, too.
People
who undervalue themselves are often motivated by feedback from others.
If more
staff takes part in the process of performance appraisal, the organizational
culture of the company will become more honest.
Disadvantages:--
Taking a lot of time, and being complex in
administration
Extension of exchange feedback can cause
troubles and tensions to several staff.
There is requirement for training and
important effort in order to achieve efficient working.
It will be very hard to figure out the
results.
Feedback can be useless if it is not carefully
and smoothly dealt.
Can impose an environment of suspicion if the
information is not openly and honestly managed.
10.
Forced ranking (forced distribution)
In this style of performance
appraisal, employees are ranked in terms of forced allocations.
For instance, it is vital that the proportions
be shared in the way that 10 or 20 % will be the highest levels of
performances, while 70 or 80% will be in the middle level and the rest will be
in the lowest one.
Advantages:--
They
force reluctant managers to make difficult decisions and identify the most and
least talented members of the work group.
They create and sustain a high performance
culture in which the workforce continuously improves.
Disadvantages:--
They increase unhealthy cut-throat competitiveness;
They
discourage collaboration and teamwork;
They harm morale;
They are legally suspect giving rise to age
discrimination cases.
11.
Behavioral Observation Scales
The method based on the scales of
observation on behaviors is the one in which important tasks that workers have
performed during their working time will be assessed on a regular basis.
Summary
Performance appraisal measures the qualitative
and quantitative aspects of job performance. An appraisal evaluates not only
the employee's performance but also his potential for development. The primary
objectives of an appraisal are – to assess past performance, to identify
training needs, to set and agree on future objectives and standards, and to
facilitate the achievement of these goals.
In many situations, the appraiser is the
supervisor of the person who is to be rated. However, companies may also use
multiple raters to evaluate performances (360 degree appraisal).
Peer and self-evaluations are on the increase, as are customer or client evaluations.
Some appraisal systems use subordinate or reverse appraisals and team rating
techniques.
Different
methods are used for appraising performance. In the straight ranking method,
employees are ranked from the best to the worst on the basis of their
performance. Management by Objectives involves an agreement between a superior
and his employee on the employee's performance objectives for a specified
period and a periodic review of the extent to which the employee is able to
accomplish those objectives.
Performance appraisal is the process of obtaining, analyzing and recording
information about the relative worth of an employee. The focus of the
performance appraisal is measuring and improving the actual performance of the
employee and also the future potential of the employee. Its aim is to measure
what an employee does.
According to Flippo, 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."
Performance appraisal is a systematic way of
reviewing and assessing the performance of an employee during a given period of
time and planning for his future.
Bibliography
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Human resource
management
S.S.Khanna
Sultan chand company ltd.( new
delhi)
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Human resource
management
Dr. C.B. Gupta
Sultan chand & sons
Educational publishing New Delhi
3.)
Human resource management
C.B.Mamoria
S.V.Gankar
Himalaya publishing house
4.
Human Resource
Management & Personnel Management
Text & cases.
K. Aswathappa
5.)
Essential of Human Resource Management & Industrial relations. Text
cases & games.
- P. Subba Rao
- Himalaya Publishing House
6.)
Human Resource Management
P.C. Tripathi
Tata McGraw Hill, New Delhi
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P.S. Narayan,
P.C.K. Rao
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