PERFORMANCE APPRAISAL

Performance appraisal is the systematic, periodic and an impartial rating of an employees excellence in matters pertaining to his present job and his potential for a better job

Edwin.B.Flippo

PERFORMANCE The degree or the extent to which an employee applies his skill, knowledge and efforts to a job, assigned to him and the result of that application

APPRAISAL Appraisal means analysis, review or evaluation of performance of an employee

NEED FOR PERFORMANCE APPRAISAL

Provide information about the performance ranks, which is the basis for salary fixation, confirmation, promotion, transfer, demotion Provide information about the level of achievement and behaviour of sub-ordinate, rectifying performance deficiencies and to set new standards of work , if necessary Provide information which helps to counsel the subordinate Provide information about deficiencies in ASK To prevent grievances and in disciplinary activities

PROCESS OF PA

Job analysis, job description, Job specification Establishing standards of performance Communicating performance standards to employees Measuring actual performance Comparing actual performance with stds & discussing with employees Initiating corrective action, if necessary

IN NUTSHELL PA INCLUDES
Observation Storage Evaluation

PERFORMANCE STANDARDS
The bench mark against which the performance is measured Describe performance expectations in terms of timeliness, cost, quality, quantity, customer satisfaction, independent initiative demonstrated and any other verifiable measure

PS FOR OPERATIVES
Quantity and quality of output in a given period Amount of training necessary No. of accidents in a given period No. of absence in a given period

PS FOR SUPERVISORS
Quantity

and quality of output in a given

period Total cost per unit of output in a given period Absenteeism rate Turnover rate Man shifts lost due to stoppage of work in a given period No. of accidents

PS FOR MIDDLE LEVEL MANAGERS

Co-ordination

among supervisors Degree of knowledge among supervisors about corporate goals and policies Extent to which supervisors regard themselves as Managers and behave like wise Extent of upward communication of ideas, information and queries from supervisors

PS FOR TOP MANAGERS

Return on capital employed Labour productivity indices Capacity utilization Gain or loss in market share Contribution to the socio-cultural values of the environment

SOURCES OF INFORMATION
Superiors Subordinates Co-workers Self Client

OBJECTIVES OF PA
Developmental Administrative

DEVELOPMENTAL
Provide performance feedback Recognize individual performance Identify individual training needs Allow employees to discuss concerns Improve communication Provide a forum for leaders to help

ADMINISTRATIVE
Determine promotion candidates Determine transfers and assignments Identify poor performance Decide retention or termination Make reward / compensation decisions.

METHODS OF APPRAISAL

TRAIT METHODS
Graphic Rating Scales Ranking methods Forced distribution method Checklist method Simple checklist Weighted checklist Forced choice method Confidential reports Essay or Free form appraisal

BEHAVIOURAL METHODS
Critical Incident Method Behaviourally Anchored Rating Scales (BARS) Behavioural Observation Scales (BOS)

MODERN METHODS
Balanced Score Card Management By Objectives 360 degree appraisal

GRAPHIC RATING SCALE

Rates each employee on a particular scale 2 types Continuous & Discontinuous For continuous rating scales are:

5 = Outstanding one of the best 4 = Above average 3 = Average 2 = Needs improvement 1 = Unsatisfactory 6 = Not applicable

COMMON RATING SCALE ERRORS

1)

Leniency (positive bias) _____ Very Poor X _____ _____ _____ _____ Average Excellent

2)

Severity (negative bias) X _____ Very Poor _____ _____ Average _____ _____ Excellent

3)

Central Tendency (midpoint) X _____ _____ _____ _____ Very Poor Average

_____
Excellent

RANKING METHOD

Under this method the employees are ranked from best to worst

FORCED DISTRIBUTION METHOD

The appraiser is forced to appraise the appraisees according to the pattern of a normal curve. The performance level conforms to a normal statistical distribution

10% must be outstanding 10% must be unsatisfactory 40% must be average 20% must be above average 20% must be below average

The method overcomes the problem of adopting a central tendency towards rating

CHECKLIST METHOD
Simple Checklist Yes/No Is the employee regular on the job Y/N Is the employee always willing to help his subordinates Y/N Weighted checklist Attendance 0.5 Knowledge of job-1.0 Quality of work -1.5 Interpersonal relations2.0 Quantity of work 1.0

FORCED CHOICE METHOD

The rating form consists of a number of statements which describe an individual being rated Statements may be +ve, -ve or both The rater is compelled to check a most and a least in each group hence the term Forced Choice.

+VE & -VE STATEMENTS

Group I

Group III

Always criticises, never praises Carries out orders by Passing the buck Knows his job and performs well Plays no favourites Group-II Cannot assume responsibility Knows how and when to delegate Offers suggestions Too easily changes his ideas

Publishes in journals each year Obtains high teacher ratings Refuses to speak to the Dean Refuses to serve on Committees

BEHAVIOURAL METHODS

CRITICAL INCIDENT METHOD

A list of critical job requirements both vital for success or failure of the job has to be drawn The critical factors are assigned values A running log or inventory of effective and ineffective behaviors. Record important events throughout the appraisal period and base the evaluation on these recordings

CRITICAL JOB FACTORS

- SALES MAN

Follow up : complaints, requests, orders Planning ahead Communicating true information to Managers and Customers Using new sales technique and methods Knowing customer requirements Meeting deadlines Initiating new selling ideas.

CRITICAL INCIDENTS FOR A BANK OFFICER

Deposit mobilisation Target Rs. 10 lakh in 2009 Rs. 5 lakh from business Customer service Target Rs.2 lakhs from individuals Prompt in disposing customers within 5 min for deposit

Deposit mobilisation Critical Incident Mobilised Rs. 12 lakh Rs. 8 lakh from business Customer service Critical Incident Not mobilised

Throw ther passbook for enquiring about delay

BARS
BARS refers to Behaviourally Anchored Rating Scales. Also called Behavioral Expectation Scale (BES) It was developed by Smith and Kendall It focuses on behaviors that are determined for completing a job task A combination of rating scale and critical incident techniques

So, rather than having a rating item that says: Answers phone promptly and courteously, a BARS approach may break down that task into behaviors: For example: Answers phone within five rings. Greets caller with "Hello, This is BRIM, how may I help you?"

BEHAVIORAL OBSERVATION SCALE (BOS)

Similar to BARS but uses Likert type scale Rate the frequency in which critical incidents are performed by employees Sum the ratings for a total performance score 1) Assists others in job duties. 2) Cleans equipment after each use. 5 = almost always 4 = frequently 3 = sometimes 2 = seldom 1 = almost never

MODERN METHODS

MANAGEMENT BY OBJECTIVES

Is a process whereby performance goals and objectives are set by each subordinate in collaboration with his superior at the start of the appraisal period. Progress is then tracked and results are evaluated periodically.

MBO PRINCIPLES
Cascading of organisational goals and objectives Specific objectives for each member Participative decision making Explicit time period Performance evaluation and feedback

THREE CONSTITUENT PROCESSES IN MBO

Participative decision making Goal setting Objective feedback

MBO PROGRAMME
Every Manager identifies his key Result Area (KRAs ) where he should show results Establishes objectives in such areas (both long term and short term) Objectives should be quantified and time- bound They should be horizontally linked up with the objectives of the peers in the department, and vertically aligned with the objectives of the boss and subordinates They should be established by the job holder and the boss together

CASCADING OF OBJECTIVES

360 DEGREE APPRAISAL

Also called Multi-rater appraisal Multi- source appraisal

SOURCES
Superior Subordinate Peers Clients

OTHER SOURCES INCLUDE

BALANCED SCORE CARD

BALANCED SCORECARD PERSPECTIVES

FINANCIAL PERSPECTIVE

Shareholder Value

Human Capital Effectiveness

CUSTOMER PERSPECTIVE

Human Resource Efficiency

Customer delight
INTERNAL PROCESS PERSPECTIVE

Employee delight

Manage Customer relationships Deliver world class services

Competencie s Leadership
LEARNING & GROWTH PERSPECTIVE 47

Manage Operating efficiency

Team Integration Strategic Alignment /Motivation

Cultural Climate

Work Capability