Lectuer 11 Performance Appraisal1

 

 

Performance Management System (PMS)

Lecture 11

Performan Perfor mance ce manage managemen mentt system system involv involves es a number number of activi activitie ties. s. They They are more more than than simply simply reviewing what an employee has done.

Purpose of PMS : •

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Performan Perfor mance ce apprai appraisal sal conveys conveys to employ employees ees how effici efficient ently ly they they have have perfor performed med on established goals & tasks. Goals and performance measurement are mutually set between employee and supervisor  which ultimately help to ensure performance of employee. Acts as a criteria for rewarding increment, promotion etc. PMS influences decision to reward or punish employee in an appropriate way.

Difficulty in PMS: Appr prai aisi sing ng indi indivi vidu dual al is pr proba obabl bly y on onee of th thee di diff ffic icul ultt jo jobs bs of a • Individual Individu al focus: Ap supervisor. Because emotions acts in the way which may influence decision and may give rise to conflict. So any emotional aspect must be removed which increases the confidence and satisfaction of the employee. • Focus Fo cus on the the proce process: ss: A partic particula ularr and standa standard rd proces processs must must be follow followed ed while while conducting appraisal process. The performance appraisal process should be designed in such a way that maximum benefit can be achieved in terms of future direction for  developing the employee and reward for the employee. Appraisal Process

1. Estrablish performance standards with employees 2. Mutually set measurable goals 3. Measure actual performance 4 Compare actual performance with standard 5. Discuss the appraisal with the employee 6. Initiate corrective action, if needed.

 

Appraisal methods Different methods exist to do the appraisal. 1) Absolute standard method : Here employee are compared with an standard. •

Easy appraisa Easy appraisall method method : Apprai Appraiser ser writes down a narrative narrative description description of employees’ employees’ strength weakness, past performance, potential & suggestion for improvement. Though it is a simple method, description are unstructured so variation exists.

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Critical incident Critical incident method : The appraiser rates critical factors or key behavior that make the difference diff erence between doing a job effectively effectively or ineffectiv ineffectively. ely. The main part of such method is that it focuses more on the behavioral aspect a spect of an employee. Check list appraisal : In this method, the evaluator uses a list of behavioral description and check these points against those behaviors of the employee. Ex: Are supervisors order usually followed ? Yes No Does the individual approach the customers promptly ? Yes No Does the employee lose his temper while dealing customers ? Yes No

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Adjective rating scale : Rating scale can be used to asses quantity & quality of work, job knowledge, co-operation, loyalty, dependability, attendance, honesty, integrity, attitudes and initiative.

Performance rating Performance Factor Accuracy, skill & completeness of  work  Productivity, volume of work  done in a day

Performance rating

Consistently unsatisfactory

Occassionally unsatisfactory

Consistently satisfactory

Sometimes superior 

Consistently Superior 

Consistently unsatisfactory

Occassionally unsatisfactory

Consistently satisfactory

Sometimes superior 

Consistently Superior 

Job knowledge

P oor   knowledge

Occassionally unsatisfactory

Supervision / explation of  directions and company policies required

Requires constant supervision

Requires occasional follow-up

Can answer most questions about  job Usually can be counted on

Understands all phases of   job Requires very little supervision

Has complete knowledge in all aspects Requires minimum or  no supervision.

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Forced choice appraisal : It is special type of check list where the rater must choose between two or more statements. Each statement may be favourable and unfavorable. Ex:: St Ex Stud udent entss ev eval aluat uatin ing g co coll llege ege inst instru ruct ctor or “ Keep Keep up wi with th sc sche hedu dule le id iden enti tifi fied ed in th thee syllabus” / “ Give lecture with confidence” / demonstrate how concepts are practically applied in todays’ organizations” etc. The advantage is that it reduces the biasness and distortion of 

 

appraiser as he does not know the right answer. The disadvantage is that the rater is frustrated as he cannot determine which is the good or poor answer. 2) Relative Standard Method

Here the individuals are compared against other individuals. These methods are relative standards rather than absolute measuring methods. • • •

Group ordering method : Individual ranking Paired comparison

3) Management by objective (MBO) :Employees are evaluated on how well they accomplish a specific set of objectives. The process covers organizational objectives into individual objectives. It consists of four steps: 1. Goal oal se settting ting 2. Acti Action on plan planni ning ng 3. Sel Self cont contrrol 4. Peri Period odic ic re revi view ew

Factors distorting appraisals : Many factors come into play to influence the impartiality of appraisal process as follows: •

Leniency error : Every evaluator has his own value system which acts as a standard against which appraisal are made. Thus some evaluations are marked high or even low.

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Halo error: It is the tendency of the rater to rate high or low on all factors due to impression of a high or low rating on some specific factors. For example : if an employee tends to be dependable, the rater might become biased to give him good rating on many other issues.

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Similarity error : When evalautor perceives the candidate to be of themselves will initiate error in appraisal. (Ex: The evaluator perceives himself or herself as aggressive may evaluate others by looking for aggressiveness.)

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Low appraisal motivation: motivation: If the evaluator evaluator percei perceives ves that that poor appraisa appraisall may hurt hurt the employee, the evaluator may be reluctant to give a realistic appraisal.

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Central tendency : It is the reluctance of the evaluator to make extreme ratings. Here there is tendency to rate all employee as average.

 

Establishing effective performance evaluating system: •

Use behavior-based measures: Traits like loyalty, initiative, courage, reliability, selfexpress expr ession ion are intuit intuitive ively ly appeali appealing ng but does not mean mean that that the factor factorss will will ensure ensure  performance. 

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Combine absolute and relative standard: This is a dual method of appraisal when absolute and relative standard are judged . Ex: Studen Students ts get an absolute absolute grade like A B C D and next to it is a relative mark showing how the student ranked in the class. 

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Provide ongoing feed back: Employees frequently want to know how they are doing instead of being appraised once or twice is a year. So the solution lies in communicating with the employee regarding expectations and disappointment on a frequent basis.

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Have multiple raters : As the number of raters increases, the probability of attaining more accurate information increases. Some raters may be more careful in eliciting any strength and weakness. 

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Supervisors are notinformations. able to observe themain employee all the time. So Use peer evaluation  peer remains a better : means to collect The advantages of peer  evaluation are 1) Coworkers tend to have a constructive insight regarding colleagues 2) Recommendation tends to be more specific 

360 degree appraisal: An appraisal system that seeks performance feedback from various sources various sources like boss, peer, team member, member, customers & suppliers suppliers which has become very popular in contemporary organizations. The system also helps in the following ways: 

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Many managers do not care about how other members in the organizations evaluate their performance and behavioral pattern. Ideas from various corners help to develop in a more effective way. Accu Ac cura rate te fe feed edbac back, k, re redu duci cing ng th thee su subj bjec ecti tive ve evalu evaluat atio ion n pr proc oces esss an and d develo dev elopin ping g leader leadershi ship p abilit ability y are influe influenced nced by 360 degree degree apprais appraisal al method.

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Rate selectively : The appraisers should rate in in only those areas where they have considerable expertise.

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  Train appraisers : Training can make raters more accurate in terms of rating. Many types of error can be minimized through proper training.