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Merit-rating is associated with performance appraisal of an employee. This is a systematic approach for evaluating the performance of an employee on the job, which he performs. This is also called as performance appraisal, personnel rating and employee evaluation. Merit-rating is a formal, objective procedure for evaluating personality, contributions and potentials of employees in a working organization.
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(6) Provides base for guidance and counseling for the employees. (7) Develops healthy competition among workers to improve performance. (8) Serves as motivational tool for employees. (9) Provides objective basis for bonus, incentive wage, and salary related decisions. (10) Improves employee-employer relationship due to increased trust and confidence. (11) Sound base for negotiation with trade union.
Checklist Method
In this method, the rate is given a set of statements related to the employees performance, attitude, behavior and shortcomings. The rate is asked to tickmark either yes or no. Each yes/no carries certain points, which when added up, give final rating of the employee.
Rating by Result In this method, the rating is done on the basis of achievement of set objectives. Therefore, performance standards are set in advance. It is known to both rater and employee. Under achievement or over achievement is noticed by the rater. Therefore, this method eliminates the personal bias of the rater. Another advantage of this method is transparency in rating. Thirdly, continuous review of rating is possible by both employee and his supervisor. Possibility for improvement may be explored at regular intervals. Since approach is participative, it instills confidence in employees. The method is more suited for executives and managers as it requires proper education and training on the path of employees.
(5) Due to fear, negligence, insufficient time, insufficient information or temperament, the rater may play safe and give average rating to an otherwise good or unsatisfactory employee. (6) Reward for employee may not follow immediately after a good rating due to organization constraints. This may lead to dissatisfaction. (7) Many rating factors are very subjective. Due to this, exact rating may not be forthcoming. For example, innovativeness, drive, organizational loyalty, etc., are difficult to be quantified in exact terms.
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Personal Qualities Team spirit Attitude for work Loyalty Leadership Relations with superior Relations with subordinates Integrity Judgment
Others Attendance Ability to follow instructions Safety habits Interest in training and learning Interest in corporate culture, etc.
A successful merit rating system should be objective. Standard for outputs should be set against which performance should be measured:
For a merit rating system, these requirements are of prime importance: (1) Commitment and support of top management
(4) Education and training of employee to understand the rating system (5) Continuous rating system and periodic review
(6) Grievance redressal system (7) Administrative support for generating and retrieving necessary information (8)Sufficient time, fund and formats for the rating.
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