Presented by:-

Nisha Goyal

Rakesh Singh

Performance Appraisal

IntroductionPurpose of Performance Appraisalprerequisites for conducting performance

AppraisalBasic Steps in a Performance AppraisalPerformance Appraisal and Competitive

AdvantageMethod of AppraisalChallenges of Performance AppraisalPerformance Appraisal in TCS

Contents

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.

Strategic Performance Appraisal- employees evaluated by individual goals that are linked to overall organizational goals and objectives

Introduction

To effect promotions based on competence and performance.

To confirm the services of probationary employees upon their completing the probationary period satisfactorily.

To assess the training and development needs of employees.

To decide upon a pay raise where (as in the unorganized sector) regular pay scales have not been fixed.

Purpose of Performance Appraisal

To let the employees know where they stand .To improve communication.Finally, performance appraisal can be used to

determine whether HR programmes such a selection, training, and transfers have been effective or not

Broadly, performance appraisal serves four objectives-

 developmental uses,administrative uses/decisions,organizational maintenance/objectives, anddocumentation purposes

Contd…..

DocumentationStandards / GoalsPractical and simple formatEvaluation techniqueCommunicationFeedbackPersonal Bias

Prerequisites for Effective & Successful performance Appraisal

Calibration meetings- managers and supervisors discuss performance ratings and come to a consensus on individual ratings

Reinforces perceived importance of process Improves differentiation factorWorkforce performance and learning goals

identified, based on organizational objectivesDay-to-Day feedback

Strategic Performance Appraisal Trends

Manager as a ‘coach’ instead of ‘appraiser’Allows for future career planning and

organizational goal linkage Changing the employee perception of

performance managementHelp employees set appropriate goals

Contd…

A manager performs the appraisal annually, based on individual productivity stats

The appraiser fills out a form which states the employee’s productivity and some subjective comments about behavior

The appraisal’s main purpose is to determine raises and promotions

Example of Traditional PA

An organization’s core values include continuous improvement of customer service. A goal is set during the PA process that involves reducing customer service complaints by 15% in the coming year. This is linked to organizational values and is measurable.

The manager establishes bi-monthly feedback sessions, where employees and managers have a brief one-on-one conversation regarding current performance goals and standards related to the status of the organization at that specific point in time.

Examples of Strategic Performance Appraisal

Employees set their own goalsThe core competencies are all tied into one of

the five “pillars of excellence”

Change in focus from past performance to forward-focus and goal attainment

Employees and managers now have an ongoing ‘performance partnership’

Expectations adjusted and based on global corporate demands

How are Organizations Using Strategic PA?

Conduct ongoing observations and measurements to track performance

Exchange ongoing feedback about performance

Conduct a performance appraisal (sometimes called performance review)

If performance meets desired performance standards, reward for performance

Basic Steps in a Performance Appraisal

Performance Appraisal and Competitive Advantage

Minimizing dissatisfaction and

turnover

CompetitiveAdvantage

Strategy andBehavior

ImprovingPerformance

Making correct decisions

Ensuring Legal Compliance

Values and Behavior

Method of Appraisal

Performance Appraisal

Traditional

Modern

•Essay Appraisal Method•Straight Ranking Method•Paired Comparison•Critical Incident Method•Field Review•Checklist Method•Graphic Rating Scale•Forced Distribution

•Management By Objective•360 Degree Appraisal•Assessment Center•Behaviorally Anchored Rating Scale•Human Resource Accounting

Application of MBO in the field of performance appraisal is a recent thinking.

The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.

Management By Objectives

Four Steps in the MBO ProcessThe first step is to establish the goals each

subordinate is to attain.The second step involves setting the performance

standard for the subordinates in a previously arranged time period.

In the third step, the actual level of goal attainment is compared with the goals agreed upon.

The final step involves establishing new goals and, possibly new strategies for goals not previously attained.

MBO Process

360 Degree Appraisal

360 degree feedback

The combination of peer, subordinate, and

self-review

Sanctioned from the top Involve employees / managers in developing

appraisal criteria / processTrain employees how to give feedbackInform employees of the processPilot test in part of organizationReinforce goals of 360° appraisal Revise process when necessary

360 Degree Appraisal Process

An assessment centre will have a standardized process for evaluation of behavior using multiple inputs.

Assessment centers serve three main human resources functions:

Selection and promotion DiagnosisDevelopment

Assesment Center

Candidates participate in a series of exercises that simulate on- the job situations

A Typical Assessment Center

Trained assessors carefully observe and document the behaviorsdisplayed by the participants. Each assessor observes each participant at least onceAssessors individually write evaluation reports,

documenting their observations of each participant's performance

Assessors integrate the data through a consensus discussion process, led by the center administrator, who documents the ratings and decisions

Each participant receives objective performance information from the administrator or one of the assessors

Behaviorally Anchored Rating Scales (BARS) are scales used to rate performance. BARS are normally presented vertically with scale points ranging from five to nine.

Developing a BARS typically requires five steps:

1. Generate critical incidents2. Develop performance dimensions 3. Reallocate incidents4. Scale the incidents5. Develop a final instrument

BARs

Ratings Example: BARS

Indicate the appropriate level of performance on each factor:Quantity of work

Quality of work

Judgment

Volume low & erratic

Satisfactory steady volume

Volume above expectations

Results always accurate; model work

Results accurate and thorough

Results generally inaccurate and not thorough

Systematic, analytical, Good with complex problems

Practical judgment,

solves problems, difficulty with

assessing relative value of factors

Does not always show good judgment; problem analysis not always adequate

In 720 degree appraisal, raters include-Customers SuppliersStakeholders Family

This  gives  a  pre and  a  post   intervention results. The  pre-intervention results   set   the  baseline.

720 degree Appraisal

Human Resource Accounting is a method to measure the effectiveness of personnel management activities and the use of people in an organization.

In this method the Performance appraisal of the employees is judged in terms of cost and contribution of the employees.

Human Resource Accounting

Appraiser DiscomfortLack of ObjectivityHallo/Horn effectLeniency/StrictnessCentral TendencyPersonal BiasManipulating the evaluation

Challenges of Performance Appraisal

“A poor performer is not always a poor performer for life,” says S Padmanabhan, executive vice president, global human resources, Tata Consultancy Services (TCS).

TCS conducts two appraisals:At the end of the yearAt the end of a project

Performance Appraisal Criteria at TCS

Appraisals are based on Balanced Scorecard, which tracks the achievement of employees on the basis of targets at four levels — 

financialcustomerinternallearning and growth

Based on their individual achievements, employees are rated on a scale of one to five

Contd…..

To avoid that, TCS shuffles its employees between projects every 18 months or so. “Performance drops if motivation drops”

TCS's performance appraisal system is supported by an online system called the Human Resource Management System- an Oracle Developer 2000 based tool.

Contd….