Presented by: Amit Kumar, Varun Bansal, Arjun Kafle, Amit Pandey, Anand Prakash, Rohit Kumar

FLOW OF PRESENTATION

1. Concept of Performance Appraisal 2. Objective and Importance of Performance Appraisal 3. Methods of Performance Appraisal 4. Problems in Performance Appraisal 5. New Developments in Performance Appraisal 6. Case Study

The assessment of an individuals performance in a systematic way, the performance being measured against such factors as Job knowledge Quality and quantity of output Initiatives Leadership abilities Supervision Dependability Co-operation Judgment Health etc.

Performance Appraisal is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development.

Performance Appraisal is an assessment of an individuals performance against well defined benchmarks.

 Salary Increase Promotion Training and Development Feedback Pressure on employees

PAST ORIENTED METHODS

Rating Scales Checklist Forced Choice Method Forced Distribution Method Critical Incidents Method Field Review Method Essay Method Cost Accounting Method Ranking Method

Rating Scales
It consists of several numerical scales representing a job related performance criterion such as dependability, initiative, output, attendance, attitude, co-operation and the like. Each scale ranges from excellent to poor. A large no. of employees can be evaluated in a short period. Drawbacks

The raters biases are likely to influence evaluation. The biases are particularly pronounced on subjective criteria such as co-operation, attitude and initiative.

Checklist
A performance appraisal tool that uses a list of

statements or work behaviors that are checked by raters.

Can be quantified by applying weights to individual checklist items.

Drawbacks

Weighting creates problems in appraisal interpretation Assignment of weights to items by persons other than the raters

Forced Choice Method

Performance appraisal method in which rater is

forced to select statements which are readymade.

Drawbacks

The statements may not be properly framed. The statements may not be precisely descriptive of the ratees traits.

Forced Distribution Method

Performance appraisal method in which ratings of

employees are distributed along a bell-shaped curve.

Drawbacks

Assumes a normal distribution of performance Providing explanation for placement in a higher or lower grouping can be difficult. Is not readily applicable to small groups of employees

Forced Distribution on a Bell-Shaped Curve

Critical Incidents Methods

Manager keeps a written record of highly favorable

and unfavorable employee actions.

Drawbacks

Variations in how managers define a critical incident Time involved in documenting employee actions Most employee actions are not observed and may become different if observed

Field Review Method

Outside reviewer reviews employee record and interviews the employee and his or her superior and develops a rating for the employees from the interview notes.

Drawbacks
An outsider is usually not familiar with conditions in an employees work environment which may affect the employees ability or motivation to perform. Reviewer doesnt have the opportunity to observe employee behavior of performance over a period of time and a variety of situation.

Cost Accounting Method

This method evaluates performance from the

monetary returns the employee yields to his or her organization.

Drawbacks

Performance of employee is evaluated only on the basis of the cost in keeping the employee and the benefits derives from him or her.

Essay Method
Manager writes a short essay describing an

employees performance. Drawbacks

Depends on the managers writing skills and their ability to express themselves. It takes much time because the rater first collect the information necessary to develop the essay and write it.

Ranking Method
Listing of all employees from highest to lowest in

performance.
Drawbacks

Does not show size of differences in performance between employees Implies that lowest-ranked employees are unsatisfactory performers. Becomes an unwieldy process if the group to be ranked is large.

Methods of Performance Appraisal

Future Oriented Methods
Management by objective

360 degree appraisal

Psychological appraisal Assessment centers

Management by Objective (MBO)

Peter Drucker gave the concept of MBO in 1954
MBO requires the management to set specific measurable

goals with each employee and then periodically discuss the latters progress towards these goals.
MBO focuses attention on what must be accomplished

(goals) rather than how it is to be accomplished.

Contd..
It is thus a kind of goal setting and appraisal

program involved 6 steps :

Setting the organizational goals Setting the departmental goals Discussing departmental goals Defining expected results Reviewing the performance

Providing feedback

360 Degree feedback system

It collects performance information from multiple parties

including ones subordinate, peers, superiors and customers.

It is also currently used for designing the promotion and

rewards besides being earlier used as a fact finding and self correction techniques.
By design the 360 degree appraisal is effective in identifying

and measuring interpersonal skills, customer satisfaction and team building skills.

Psychological Appraisal
Large organization employs full time industrial

psychologist, who assess an individuals future potential and not past performance.
Appraisal

normally consist of in depth interviews, psychological tests, discussion with superior and a review of other evaluation.

Contd..
Psychologist then makes an evaluation of the

employees future performance.

These evaluations helps in placement and

development decision to shape the persons career.

This approach is slow and costly, quality of

appraisal depends largely on the skills of psychologist.

Assessment Centers
First applied in German army in 1930. Meant for assessing the potential. It is not a technique of performance appraisal by

itself. In fact it is the assessment of individual. Techniques used are role playing, case studies, simulation exercises etc.

Contd..
Individuals from various departments work

together in groups on assignments similar to the ones they would be handling when promoted Observer rank the performance of each & every participant in order of merit. All assesses get an equal opportunity Proves to be a better method

BASIC TYPES OF PROBLEMS

JUDGEMENT ERROR
POOR APPRAISAL FORMS LACK OF RATERS PREPAREDNESS INEFFECTIVE ORGANISATIONAL POLICIES &

PRACTICES

JUDGEMENT ERRORS

Errors committed while making decisions, due to biases & prejudices are judgement errors.

FIRST IMPRESSION (PRIMACY EFFECT): The appraisers first impression of a candidate may colour his evaluation. Positive primacy effect- Candidate cant do a wrong thing. Positive primacy effect- Candidate cant do a thing right.

judgement errors

HALO ERROR: One aspect of candidate covers up all other aspects.

eg. If appraiser deduces the worker to be good on the basis of his dress sense.

judgement errors

HORN EFFECT

Raters bias is in other direction.

eg. Candidate doesnt smile at all so he cant mix with other people.

judgement errors
STEREOTYPING

CENTRAL TENDENCY
When rater rates the candidates as average employees.
Recency effect A current performance is given more then the required weightage.

It occurs when a rater creates a mental picture because of the age, sex, religion, caste etc.

POOR APPRAISAL FORMS

Bad appraisal forms are responsible for bad evaluation.

Following factors may make the form bad: 1. 2. 3. 4. Unclear rating scale. Ignored important job aspects. Unnecessary performance dimensions. Too long or complex forms.

LACK OF RATERS PREPAREDNESS

A rater may be unprepared due to:

No proper training Lack of time. Confusion due to vague objectives.

INEFFECTIVE ORGANISATIONAL POLICIES & PRACTICES

Sometimes organisational policies demotivate the whole appraisal process. Some malpractices are: no reward to rater negative attitude of rater. colleagues rating themselves. negative attitude of management.

Annual Performance Appraisals

Purpose: To measure annual performance against

objectives established in performance plan Steps:

1) Ask employee to complete self evaluation form 2) Complete appraisal form 3) Schedule performance appraisal discussion in advance

Completing the Appraisal Form

Consider:
Performance notes kept over

course of the year Employees self evaluation Feedback from key customers Observations of supervisor

Preparing Individual Development Plans

Develop performance plans for each employee based upon the areas of past performance that need improvement and the areas of future development that an employee can strive to attain.

How to Prepare Individual Development Plans

Review training and educational records
Identify educational/training opportunities Consider job rotation

Identify sources of assistance

Follow through on commitments

A New Approach to Executive Performance Management

Executive Performance Appraisal Plan Development

Development Team was comprised of

Directors from the field Field survey was conducted with the best ideas incorporated in the final plan Performance expectations from senior level VBA management were incorporated in the final plan

Performance Appraisal System

Element 1 - Balanced Scorecard Performance
Element 2 - Organizational Support/Teamwork Element 3 - Leadership Development Element 4 - External Relations Element 5 - Workplace Responsibilities

The Balanced Scorecard

Balanced Scorecards for each business line contain the following key elements:
Speed Accuracy Unit Cost Customer Satisfaction Employee Development

Appraisal Smart

A Sophisticated Web-Based, Enterprise-Wide Performance Appraisal / Review System Based on International Best Practice
www.appraisal-smart.com

Managing and Administering the Employee Performance Appraisal / Review process need not be so stressful, time-consuming and paper-intensive any longer

Appraisal Smart offers an innovative, cutting-edge approach to administering Employee Performance Appraisals/Reviews, and will place you at the technological forefront regarding this crucial Human Resources and Managerial function It not only automates Performance Review administration - it elevates it to a superb relationship, productivity and behavior modification tool, effectively driving change, productivity, development of core competence, and ultimately: bottom line results

The Appraisal Smart solution is not just an electronic document management tool - it is an interactive Performance Management Support System

Appraisal Smart Accommodates any kind and combination of Performance Measures such as:

Goals Objectives Key Performance Indicators (KPI's) Competencies

Performance Appraisal HUMAN RESOURCE MANAGEMENT

Electronic industries limited, Faridabad

Products -electric bulbs, water coolers, air coolers, and refrigerators

Recent addition- electric motors both for domestic and agricultural purposes.

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VACANCY
one engineer with B. tech degree

Currently, five engineers having B. Tech are working as

assistant engineer

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Advertisement
12 applications received
5 are from company itself

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selection
Process:- preliminary interview, tests, final interview,

& medical Check-up

Mr. Anil Ambani was selected He was 4th rank Assistant engineer of the company

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Grievance of others
Moved into the court against promotion unfairness.

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Questions
Comment on the managerial choice in favour of Mr

Ambani. Is it necessary to promote only seniors to higher posts in an organisation? Why? Why not? What is the legal position in such cases in India?

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References
Human Resource Management by L.M. Prasad

Human Resource Management by K. Aswathappa