index

IntroductionHistoryObjectivesWhat is Performance Appraisal?Performance Appraisal Process.Methods of Performance AppraisalConclusion.

History

• Roots in the early 20th century

• The world's second oldest profession

• PA recognized by US government in 1950

• This became evident in the late 1980s.

• The UK (consistent with Europe) Employment Equality (Age) Regulations 2006,

Definition

• “Any system of determining how well an individual employee has performed during a period of time, frequently used as a basis for determining merit increases.”

• “OBSERVE and EVALUATE an employee’s in

relation to PRE-SET performance standards.”

PAObjectives

Documentation

Organizational

Maintenance

PromotionsTraining and development

Pay scales & Pay raise

Constructive criticism and guidance

Administrative uses

HR programmes

Communication

Appraisal Process

Establish job Expectations

Design an Appraisal Programme

Appraise Performance

Performance Interview

Objectives of Performance Appraisal

ArchiveAppraisal Data

Use appraisal data for appropriate purposes

THREE AND ONE

• WHO ? SUPERVISORS DO EVALUATIONS

• WHAT ? COMPLETION OF JOB TASKS

• WHEN ? NEW EMPLOYEES 3-6 MONTHS

• HOW ? SPECIAL CARE & RESPECT

Sources of Information

1) Supervisors (most common)

• Role Conflict (e.g., judge and trainer/teacher)

• Motivation

• Time availability

• Friendship

2) Co-Workers (Peers)

• Friendship bias

• Leniency

• High level of accuracy

• Best used as a source of feedback

Sources of Information (cont)

3) Self

• Lots of knowledge

• Leniency effect

• Good preparation for performance appraisal meeting (conducive for dialog)

4) Subordinates

• Biases (e.g., # of subordinates, type of job, expected evaluation from supervisor)

5) Client

• Good source of feedback

• Negativity bias

Methods of pa1. Confidential Report

2. Graphic Rating Scale

3. Ranking Method

4. Forced Choice Method

5. Critical Incidents Method

6. MBO 7. Checklist8 Forced Choice Method9 Critical Incidence Method10 Performance Tests and Observations11 Field Review12 Rating Scales 13 Forced Distribution Method14 Behaviorally Anchored Rating Scales

confidential report

• Evaluation of Characteristics e.g. Loyalty, attendance

• Traditional Method

• Workshop on Performance Appraisal in 1983

• Objectives of Category “C” & “D”

• Characteristics should be easily understandable .

• Rating scale of report should be introduce as Qualitative Reporting.

Graphic rating scale

• Measure the degree of characteristics required for adequate performance of the job.

• Sawlapurkar(1967), Dayal(1969), Bolar(1978), Dwivedi

Poor Average Good Excellent

Quantity of Work

1 2 3 4

Quality of Work 1 2 3 4Job knowledge 1 2 3 4Dependability 1 2 3 4Attitude 1 2 3 4

Ranking method

• Employee is evaluated by different Supervisors with ranks and then these ranks are grouped to see which employee is rated “BEST”. E.g.

Subordinates A B C Mean Rank

Mohan 2 4 3 3.0

Kumar 1 2 1 1.3

Sunil 3 1 2 2.0

Bharat 5 3 4 4.0

Ravi 4 5 5 4.6

Forced Choice method

• Supervisor asked to indicate one least & one most descriptive statement for particular subordinate.

• Each statement carries some weight which is not known to the supervisor.

• Statistical tools having numerical score provides merit of employee.

Critical incidents method

• Any critical incidents or Outstanding examples of success or failure of subordinates is recorded by supervisor.

• It improve the supervisor ability as an observer

• Identifies Areas where counseling may be useful.

• It is less Reliable and valid for many organizations.

Management By objectives

• “Management by Objectives (MBO) is a process of agreeing upon objectives within an organization so that management and employees agree to the objectives and understand what they are.”

• Largest user of MBO in India is public sector but failure of it is lack of performance appraisal system.

• Setting goal is difficult in MBO.

Five step mbo process

• Explanation of MBO in more detail as its an important topic

MBO HAS A METHOD OF PERFORMANCE

APPRASIAL.USES AND LIMITATIONS

DEFINITION

• A GOAL –DIRECTED APPROACH TO PERFORMANCE APPRAISAL IN WHICH WORKERS AND THEIR SUPERVISORS SET GOALS TOGETHER FOR THE UPCOMING EVALUATION PERIOD

USES

• THE OUTCOME APPROACH PROVIDES CLEAR AND AMBIGUOUS CRITERIA BY WHICH WORKER PERFORMANCE CAN BE JUDGED.

• IT ALSO ELIMINATES SUBJECTIVITY AND POTENTIAL FOR ERROR AND BIAS THEN ALONG WITH IT.

• PROVIDES FLEXIBILTY

EXAMPLE

• A CHANGE IN THE PRODUCTION SYSTEM MAY LEAD TO A NEW SET OF OUTCOME APPROACHES AND MEASURES AND PERHAPS A SET OF PERFORMANCE STANDARDS .

USES

THIS HAPPENED BECAUSE OF MBO

A WORKERS OBJECTIVES WERE BETTER UNDERSTOOD AT THE BEGINNING OF A NEW EVALUATION PERIOD IF THE ORGANISATION

CALLS FOR EMPHASES

LIMITATIONS

• SUPPOSE THE EQUIPMENT OR THE MACHINERY IS WORKING FINE THEN ANY INEXPERIENCED LABOUR CAN DO THE JOB BUT WHAT IF THE MACHINERY IS NOT WORKING PROPERLY THEN WILL THE INEXPERIENCED PERSON WOULD BE ABLE TO RESOLVE THE PROBLEM

LIMITATIONS(CONTD)

• IF YOU WERE THE MANGER WHAT WOULD YOU DO ?

• GET THE BEST WORKER ON TO THE JOB DEPENDING ON HIS PERFORMANCE RECORDS

• BUT YOUR WORKER WOULD ACTUALLY END UP LOOKING LIKE THE WORST WORKERS IN THE TERMS OF THE AMOUT OF PRODUCT PRODUCED

LIMITATIONS (CONTD)

• POTENTIAL DIFFICULTY WITH OUTCOME BASED- PERFORMANCE MEASURES IS THE DEVELOPMENT OF A”RESULTS AT ANY COST” MENTALITY. FOR EXAMPLE , AN ORGANISATION MAY USE THE NUMBER OF UNITS PRODUCED AS PERFORMANCE MEASURE BECAUSE IT IS FAIRLY EASY TO QUANTIFY.WORKERS CONCENTRATING ON QUANITITY MAY NEGLECT QUALITY AND FOLLOW UP SERVICE TO THE LONG –TERM DTERIMENT OF THE ORGANISATION

DEFINITION OF OUTCOME MEASURE

• “THE NUMBER OF UNITS PRODUCED THAT ARE WITHIN ACCEPTABLE QUALITY LIMITS”

Checklist

• Statement on the traits of employee and his job

• When points are allotted it becomes – weighted checklist

• Advantage – standardisation, economy, ease of use

• Disadvantage – relative rating is not possible

Field Review

• A senior member of the HR department or a training officer discusses and interviews the supervisors to evaluate and rate

• The assessor does not belong to the ratee’s department.

Essay Method

Employee is described in a number of broad categories like

• Overall impression

• Strengths and weakness

The strength of this method is the writing skills and analytical skills of the rater.

Comparative Evaluation Approaches

• Conducted by supervisors.

• These appraisals result in ranking from best to worst – helpful in deciding merit pay, promotions and organisational rewards.

Paired-Comparison Method

• The appraiser compares each employee with every other employee

PROCESS

First: A and B are compared

Second: Then A is compared with C, D,E….

Paired-Comparison Method (contd..)

The no. of comparisons may be calculated with the help of a formula:

N (N-1)

2

where N is the no. of employees to be compared.

PA in Government Organisations

• Most commonly used method is Confidential Reports

Discrepancies– Lack of accountability– Laid back attitude due to high level of job

security– Unrealistic objectives– Team appraisal is often not possible

Compensation and Performance

• Merit Pay

• Profit Sharing

• Incentives and Performance Bonus

• Gain Sharing

Current Global Trends in PA

• Trend towards a 360-Degree feedback system

• Problems in implementation are anticipated and efforts are being made to overcome them

• Team Performance Appraisal

• Rank and Yank Strategy

• TQM an Performance Appraisal

Challenges

• Determining the evaluation criteria• Lack of competence • Errors in rating and evaluation • Resistance

360º PERFORMANCE APPRAISAL

CONTENTS

INTRODUCTION TO 360º PA WHO DOSE 360º PA? WHY TO USE 360º PA? HOW TO IMPLEMENT 360º PA? TIMING OF 360º PA USES OF 360º PA ADVANTAGES OF 360º PA DISADVANTAGES OF 360º PA COMPANIES USING 360º PA SAMPLE QUESTIONNARIE

INTRODUCTI0N

A developmental and/or performance appraisal tool which utilizes multiple-source feedback from people who work most closely with the employee.

It is also known as multirate feedback,multisource feedback & multisource assessment.

It is done either by interview method or questionnaire

Who Does 360º PA?

Why to use 360º PA?

It provides the individual with an opportunity to learn how different colleagues perceive them, leading to increase self-awareness.

It encourages self-development. It increases understanding of the behaviours

required to improve personal and organisational effectiveness.

Contd…

It promotes a more open culture where giving and receiving feedback is an accepted norm.

It increases communication within the organisation.

It can be a powerful trigger for change.

How to implement 360º PA?

EXPLAIN THE PUROSE OF THE PROCESS

DEFINE SKILL MODEL

DISCUSS WITH EMPLOYEE

PROVIDE FEED BACK

PROCESS QUESTIONNARIES

COMPLETE QUESTIONNAIRES

DISTRIBUTE QUESTIONNARIES

Timing of 360º PA

It is not appropriate to introduce it during periods of downturn or when re-organisations have been announced.

Uses of 360º PA

Validating selection processes and development programmes

Identifying training and development needs Pinpointing skills and competencies Making personnel decisions such as

promotions, terminations, salary hike and probationary status

Career development

Contd….

Employee coaching Supervisory training Management development

Advantages

Increase awareness of senior management that they too have development needs.

More reliable feed back to senior manager about their performance.

Encouraging more open feed back.Identifing key development areas for the

individual, a department and organization as whole.

Contd…

Identifying strength that can be used to the best advantages of business.

Provide clear picture to senior management about individual’s real worth.

Raising self awareness of employee & managers about how they personally affect others positively& negatively.

Disadvantages

People not giving frank or honest feed back.

People being put under stress in receiving or giving feed back.

Lack of action following feed back.Too much bureaucracy.

MNC’sUsing 360º PA

American Airlines AT&T American Express Boeing Compaq General Electric Glaxo General Mills Hewlett-Packard

Intel Herman Miller J.P. Morgan Morgan Stanley Motorola Procter & Gamble Levi Strauss 3M FedEx

Indian companies using 360º PA

Reliance IndustriesCrompton GreavesGodrej ShopsWiproInfosysThermaxGE(India)

ERRORS INPERFORMANCE APPRAISAL,

WAYS & MEANS TO REDUCE IT

Performance Appraisal and Other HRM Functions

Performance appraisal Performance appraisal validates selection functionvalidates selection function

Performance appraisal Performance appraisal validates selection functionvalidates selection function SelectionSelectionSelectionSelection

Selection should produce Selection should produce workers best able to meet workers best able to meet job requirementsjob requirements

Selection should produce Selection should produce workers best able to meet workers best able to meet job requirementsjob requirements

Performance appraisal Performance appraisal determines training needsdetermines training needs

Performance appraisal Performance appraisal determines training needsdetermines training needs

Training and Training and DevelopmentDevelopment

Training and Training and DevelopmentDevelopment

Training and development Training and development aids achievement of aids achievement of performance standardsperformance standards

Training and development Training and development aids achievement of aids achievement of performance standardsperformance standards

Performance appraisal is a Performance appraisal is a factor in determining payfactor in determining pay

Performance appraisal is a Performance appraisal is a factor in determining payfactor in determining pay

Compensation Compensation ManagementManagement

Compensation Compensation ManagementManagement

Compensation can affect Compensation can affect appraisal of performanceappraisal of performance

Compensation can affect Compensation can affect appraisal of performanceappraisal of performance

Performance appraisal judges Performance appraisal judges effectiveness of recruitment effectiveness of recruitment effortsefforts

Performance appraisal judges Performance appraisal judges effectiveness of recruitment effectiveness of recruitment effortsefforts

RecruitmentRecruitmentRecruitmentRecruitmentQuality of applicants Quality of applicants determines feasible determines feasible performance standardsperformance standards

Quality of applicants Quality of applicants determines feasible determines feasible performance standardsperformance standards

Performance appraisal justifies Performance appraisal justifies personnel actionspersonnel actions

Performance appraisal justifies Performance appraisal justifies personnel actionspersonnel actions Labor RelationsLabor RelationsLabor RelationsLabor Relations

Appraisal standards and Appraisal standards and methods may be subject to methods may be subject to negotiationnegotiation

Appraisal standards and Appraisal standards and methods may be subject to methods may be subject to negotiationnegotiation

Reasons Appraisal Programs Sometimes Fail Lack of top-management information and support

Unclear performance standards Rater bias Too many forms to complete Inadequate preparation on the part of the manager. Employee is not given clear objectives at the

beginning of performance period. Overemphasis on uncharacteristic performance. Organizational politics or personal relationships judgments. Manager may not be trained at evaluation or

giving feedback. No follow-up and coaching after the evaluation

Common Errors in

the Appraisal Process

Halo Error/Horn Error

First Impression Error

Recency Error

Leniency Error

Severity Error

Central Tendency Error

Stereotyping

Attribtion bias

Responsibility

Commitment

Initiative

Sensitivity

Judgment

Communication

Observation of specific behavior (s) (e.g., volunteers

to work overtime)

Halo Error/Horn Error: rating a single individual based on the interviewer’s general feeling toward the individual so that employee receives nearly identical ratings (usually high) on all performance areas

High ratings on other performance dimensions

First Impression Error• Tendency of a rater to make an initial positive or negative judgement of an employee and allow that first impression to color or distort later information

Leniency Error• give more positive ratings to employees than they

deserve

Severity Error • evaluate employees more unfavorably than they deserve

Central Tendency Error• rating all employees near the mid-point of the

performance scale

Recency Error

• The tendency of minor events that have happened recently to have more influence on the rating than major events of many months ago.Stereotyping

• The tendency to generalize across groups and ignore individual differences.

Improve Appraisal FormatsImprove Appraisal Formats

Select the Right RatersSelect the Right Raters

Understand Why Raters Make Understand Why Raters Make MistakesMistakes

Strategies to Better Understand and Measure Job Performance

Training Raters to Rate More Accurately

Rater-error training to reduce psychometric errors

Performance dimension training Performance-standard training

1)Ensure that procedures for personnel decisions do not differ as a function of the race, sex, national origin, religion, or age of those affected by such decisions.

2) Use objective and uncontaminated data whenever they are available.

3) Provide a formal system of review or appeal to resolve disagreements regarding appraisals.

4) Use more than one independent evaluator of performance.

5) Use a formal, standardized system for personnel decisions.

6) Ensure that evaluators have ample opportunity to observe and rate performance if ratings must be made.

7) Avoid ratings on traits such as dependability, drive, aptitude, or attitude.

8) Provide documented performance counseling prior to performance,-based termination decisions.

Prescriptions for Legally Defensible Appraisal Systems

Assessment Centres- Process & Methods

Presentation Outline :-

• What is meant by a Assessment Centre?

• When are they conducted?• Dimensions of Assessment Centre.• The Assessment Process• How Effective are Assessment Centres• Current Trend in Assessment Centres• Questions

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Assessment Centre

It’s a process not a Place or a Location.

• It’s a process which is being increasingly used by middle to large organizations

In Recruitment.In Promotions to identify staff who possess strong

potential for higher level positions.In training and development. Etc..

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Assessment Centre

• It’s a process where a group of participants undertake a series of job-related exercises under observation, so that

• Skills

• Competencies and

• Character traits of an individual can be assessed.

• Specially trained assessors evaluate each participant against predetermined criteria.66

When are they conducted?

Assessment Centres are used after the initial stages of the selection process.

• Other measurements such as psychological tests may complement the selection process.

• Other recruitment activities, which are currently gaining favour, such as an expected attendance with other hopeful recruits at a company social function, are not part of Assessment Centres. 67

What do assessors look for in a candidate – the dimensions

Adaptability: Ability to react to changing situations or information in a timely manner.

Decisiveness: Readiness to make decisions, render judgments, take action, or commit one-self to a course of action.

Delegation: Ability to use subordinates effectively.Development of Subordinates: Ability to maximize human

potential of subordinates through training and developmental activities.

Independence: Ability to act based on own convictions rather than through a desire to please others.

Initiative: Desire to actively influence events rather than passively accepting them; self-starting; takes action beyond what is necessarily called for.

Interpersonal Relations: Ability to perceive and react to the needs of others, paying attention to others' feelings and ideas, accepting what others have to say, and perceiving the impact of self on others.

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What do assessors look for in a candidate – the dimensions

• Judgment: Ability to evaluate courses of action, develop alternative courses of action, and to reach logical decisions based on the information at hand.

• Listening:  Ability to extract important information in oral communications and to convey the impression that one is interested in what others have to say.

• Organizational Sensitivity: Ability to perceive the impact of a decision on the rest of the organization, awareness of the impact of outside pressures on the organization.

• Persuasiveness: Ability to organize and present material in a convincing manner to gain agreement or acceptance.

• Planning and Organization: Ability to efficiently establish an appropriate course of action for self and/or others, to accomplish a specific goal, make proper assignments of personnel, and appropriate use of resources. 

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Assessment Process :-

• Some of the Common Exercises done are :-– Exercises to measure a particular set of

job skills.– Case Studies– In Tray exercises– Group exercises– Role plays

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Exercises to measure a particular set of job skills.

• For Example :- Recruits for a car production line were tested on physical strength, coordination and aptitude for production line work, by repeatedly fitting tyres onto wheel rims.

• Accounts Clerk recruits were asked to complete tests measuring accuracy against speed.

• Tests may involve calculating hotel accounts, goods invoices, and vehicle mileage examples

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Case Studies• Project Managers may be asked to

plan for the release of a new product, which incorporates scheduling, budgeting and resourcing.

• This type of exercise may measure the ability to: analyse complex data and issues; seek solutions; project plan; and present findings, using a mixture of presentation skills. 72

In Tray exercises

• In In Tray exercise, you may be asked to assume a particular role as an employee of a fictitious company and work through a pile of correspondence in your In Tray.

• These tests commonly measure Job Skills such as: ability to organise and prioritise work; analytical skills; communication with team members and customers; written communication skills; and delegation (if a higher level position).

• This type of exercise may take from several hours to a day. 73

Group Exercises

• Group exercises involve candidates working together as a team, to resolve a presented issue.

• These exercises commonly measure interpersonal skills such as group leadership, teamwork, negotiation, and group problem solving skills.

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Role plays

• If you are asked to do a role play, you will be asked to assume a fictitious role and handle a particular work situation. Customer Service Officers may be asked to respond to a number of phone inquiries, including customer queries and complaints.

• This type of exercise may measure: oral communication, customer service orientation, and problem solving. Managers may be asked to provide feedback to a sales representative staff member, after viewing a videotape of the sales representative's call with a client.

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How effective are Assessment Centres?

Assessment Centres have provided higher validity levels for test outcomes than other selection methods.(Landy 1989). Due to the wider range of skill measurements used, which other tests may lack.

Effectiveness of each Assessment Centre will depend on the strength of its component exercises.

Work simulation tests may closely match the expectations of the employer organisation. The assessors may be senior company employees who have an ongoing involvement with and interest in the successful candidate, whom they helped select (Landy 1989, Robertson, 1987).

Lastly, Assessment Centres, by nature of their work simulation design, 'appear' to more closely evaluate the demands and requirements of the advertised position, compared to interviews and psychological tests.

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Current Trends in Assessment Centre.

• There has been a trend towards using the term “Development Centre”, in place of “Assessment Centre”.

• Helped in Gain in reduced anxiety.

• Participants find the term “development” more friendly and less threatening than “assessment”.

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Example of In Tray exercise

• A common example of an in tray exercise at first level management may involve: placing you in a particular role within a work setting, where a crisis situation is developing. The situation requires you to take responsibility for the situation. During the exercise, mail is delivered and collected each half hour. The exercise will describe what resources are available to you: e.g. a list of internal phone contacts and who's who, a telephone, fax, personal computer, information such as a product reference chart, data showing the work area's performance, a calendar which notes key dates and relevant deadlines, 78

• a highlighter, pen, pencil, eraser, ruler, internal memo pad, letterhead stationery, writing pad, envelopes, out tray, and an in tray containing particular items. Intray items may range from requests to return calls to customers with specific complaints and queries, comments to be provided to your manager, reports to be completed, requests from your staff, and office social club notices. Some of this correspondence may be past the action date, other notes may be vague in meaning. 79

Example of Group Exercises• One example of a problem solving scenario

includes a Tower Building exercise, using play building blocks.

• In this exercise, a group may be competing with other groups to design and build a tower in accordance with a construction brief which may stipulate minimum height, time period the completed tower has to stand 'unsupported', colour, cost of block shapes, a time limit, and a budget.

• There may be monetary penalties for failing to reach particular aspects of the brief. Each group has access to a limited number of blocks.

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