ASSINGMENT

ON

Human Resource Management (MHR - 102 )

Topic- Performance Appraisals

SUBMITTED BY Name-Ahyulo kent Roll no- NU/MN-04/11

PERFORMANCE APPRAISAL
INTRODUCTION Performance appraisal refers to the process of evaluating the performance of an employee and communicating the results of evaluation to him for the purpose of rewarding or developing the employee. Performance appraisal could be informal and formal. Informal performance appraisal is a continuous process of feeding back information to the subordinates about how well they are doing their work in the organization. The informal appraisal is conducted on a day to day basis. For example, the managers spontaneously mention that a piece of work was well performed or poorly performed. Because of the close connection between the behavior and feedback on it, informal appraisal quickly encourages desire performance and discourages undesirable performance before it become permanently ingrained. Therefore, informal appraisal must not be perceived merely as a casual occurrence but as an important activity, an integral part of the organizations culture. The formal appraisal occurs usually annually on a formalized basis and involves appraise and appraiser in finding out the following questions: What performance was set out to be achieved during the period? Has it been achieved? What has been the short fall and constraints? What are we going to do now? How we will know that we have done it? What assistance can be expected to improve performance? And What rewards and opportunities are likely to follow from the performance appraisal? When the employees have this type of information, they know what the organization expects from them, what assistance is available, and what can they expect when the required level of performance is achieved. This will increase employee acceptance of the appraisal process and result in the trust that the employee has in the organization. An environment that affords an opportunity for further growth while minimizing stressful situations will certainly enhance appraisal acceptance. Establishing this type of environment goes far beyond the performance appraisal process. Every aspect of managing people and their work relates to the improvement of their quality-of-work-life. Performance appraisal is an integral part of a trusting, healthy, and happy work environment that goes a long way in promoting the same. Performance appraisal has been used for basically three purpose- remedial, maintenance, and development. A performance appraisal needs to cover all these three purpose with the same focus. If any purpose predominates, the system will become out of balance. For instance, if remedial purpose is foremost, then the performance appraisal may become a disciplinary tool, a form of a charge sheet, a tool of power instead of instrument of evaluation. If maintenance is the main objective, then the process may become a short, skimped and per functionary ritual. If there is too

much emphasis on development, then the focus falls on the future assignment rather than the current job. OBJECTIVES OF PERFORMANCE APPRAISAL objectives 1 Setting target and goal as performance standards Remarks Performance standard and specific goal are set at the beginning of the appraisal period. These targets motivate the employee to perform better.

Evaluating employee performance

The evaluation of employee performance helps understand the strength and weaknesses of the employee. This evaluation also helps to determine the achievement of pre-set goal and targets.

3 Identifying training and development needs

An employees area of weakness is also the areas for improvement or development. These are the shortcomings in the individuals performance, which need to improvement upon.

Rewarding performance

Rewarding a good performer and punishing a bad one encourages employees to perform better. As has been stated in the reinforcement theory, behavior is a function of its consequences.

Improving performance

Once the strength and weaknesses are identified, the employee can be encouraged to overcome his weaknesses and leverage his strengths to optimize his performance.

PROCESS OF PERFORMANCE APPRAISAL Performance appraisal comprises the following steps: Select performance factors (base on job description) to be evaluated and set the standards to be achieved. Set the performance review period

 Measure actual performance Compare performance with the set standards and rate it with a suitable scale Communicate the rating to the appraisee Use the performance appraisal for the desired purpose. PERFORMANCE APPRAISAL METHODS The different methods of performance appraisal could be classified into five categories: Rating by superiors: - In this system, supervisors appraise the performance of subordinates without involving the latter. This method is commonly used in government organizations. However, it suffers from the prejudiced approach and the ability of the superiors. The validity of the system can be improved by basing it on performance. The various methods which are used under this system are: Ranking methods- order of rating from best to worst Paired comparison method- comparing rates to one another Graphic rating scales- standardized, quantitative rating MBO- measuring performance against results

Critical incident method- evaluation based on key incidents Force distribution method- one to one comparison Feedback on appraisal information : - In this system, the appraisee is informed about his strong and weak points, and afforded an opportunity to defend himself in terms of constraints or weaknesses. This system leads to greater satisfaction and higher work performance due to participative approach. Meyer suggested that the goal of the appraisal should be to improve the future performance of subordinates and, therefore, suggested that performance appraisal should be made a continuous process rather than once-a-year Field review technique: - In this technique, the appraiser goes to the field and obtains the information about work performance of the employee by way of questioning the said individual, his peer group, and the superiors. The information received about how he is performing helps the appraiser in defining the profile of the employee. Rating by self and peer group: - In this method, the employee appraisal is done independently at three levels- employee, peer group, and the superior. HRD department analyzes these appraisal reports and draws a profile based on common aspects. 360 degree performance appraisal: - This system aims at a comprehensive and objective appraisal of employee performance. In a 360 degree appraisal system, the employees performance is evaluated by his supervisor, his peers, his internal/external customers his internal/external suppliers and subordinates.

This system reduces the subjectivity of a traditional supervisor appraisal. It is also more comprehensive because the feedback is given by the peers, customers, suppliers and subordinates of the employee, who are more directly affected by his behavior and performance, apart from the boss.

BENEFITS OF PERFORMANCE APPRAISAL Performance appraisal is a formal exercise carried out for all executives and workers/staff with respect to their contributions made towards the growth of the organization. The aim is to measure the overall performance of the employee over a period of time, usually one year by his immediate supervisor so as to provide a feedback to the employees and aid the management. Performance appraisal does not merely measure the performance of the people but has many other benefits. The benefits of a successful appraisal system can be summed up as follows: (a) For the appraise Better understanding of his role in the organization what is expected and what need to be done to meet those expectations Clear understanding of his strength and weaknesses so as to develop himself into a better performer in future Increase motivation, job satisfaction and self-esteem Opportunity to discuss work problems and how they can be overcome Improved working relationships with the superiors

(b) for the management Identification of performers and non-performers and their development towards better performance. Opportunities to prepare employees for assuming higher responsibilities. Opportunities to improve communication between the employees and the management Identification of training and development needs Generation of ideas for improvements

(c) For the organization Improved performance throughout the organization Creation of culture of continuous improvement and success Conveyance of message that people are valued

The above benefits will be realized only if performance appraisal is considered as a process of management. PITFALLS IN PERFORMANCE APPRAISAL Performance appraisal helps management to collect data on human resources and use it for enhancing responsiveness of the organization. Since performance appraisal is done by people who have emotions, there will always be some subjectivity. Being subjective in nature, there are certain pitfalls which need to be guarded against. Some of the common pitfalls encountered in performance appraisal are the following: Halo effect: - the appraiser allows a single characteristic of the appraisee to dominate his judgment of the employee performance. This can result in either a positive report or a negative report on the performance of the employee. Leniency effect: -this refers to the situation where the appraiser tends to give high ratings and only positive feedback to the appraisee, irrespective of his actual performance. The main reason for leniency could be the appraisers desire to maintain a cordial relationship with appraise. Stringency effect: - this is just opposite of the leniency effect. An appraiser, who feels that the rule and standards of the organization are not strict enough, tries to be very strict in rating his appraises. This might lead to dissatisfaction among his appraises as they will feel that the evaluation is biased and unfair. Recency effect: - this occurs when the recent performance of the appraisee dominates the appraisal. The appraiser tends to get influenced by the performance of the employee over the last 2-3 months of the appraisal period as it is still fresh in his memory. This is due to recency effect. Primary effect: - the performance of the appraisee at the beginning of the appraisal period dominates the evaluation. The appraiser tends to be influenced by the behavior or outcomes exhibited in the early stages of the appraisal period and this lea to a distorted evaluation. Central tendency effect: - central tendency is the tendency of the appraiser to rate most of the appraisees in the middle of the performance scale. This appraiser gives neither high nor low ratings and tends to gives ratings in the middle of the scale to all the appraisees. This is one of the most common errors in employee performance rating. Culture: - in some cases, the culture of the organization or the country can influence the appraiser to rate the appraisee in a particular way. For examples, in India context, a young appraiser who has to evaluate the performance of his elder colleague may tend to give him higher ratings than his performance warrants. In this case, the Indian culture which advocates respect for elders subconsciously influences the young appraiser. Stereotyping: -stereotyping is a potential error in personality analysis that can distort performance appraisal. It involving judging someone based on the group he belongs to and

the appraisers perception of the group. For example, an appraiser who believes that women good managers would tend to rate his female appraisees better than his male appraisees. Perceptual set: - this is the tendency of the appraisers to have an exception of the performance level, which might distort the perception and judgment of actual performance. Fundamental attribution error: - an employees performance might have been affected due to some external factors outside his control. The appraiser might however underestimate the influence of the external factors and overestimate the influence of internal factors while judging the behavior/performance of the employee.

Many other behavioral and perception error distort the appraisal system and reduce its effectiveness. If these errors are taken care of in a suitable and well-executed appraisal system, it can add immense value to the organization. CONCLUSION Performance appraisal measures the qualitative and quantitative aspects of job performance. An appraisal evaluates not only the employees 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.