::Performance Appraisals::

Presented By:

Priyanka Balwa

MBA-III-B

Performance Appraisal The systematicsystematic, periodicperiodic and an

impartial rating of an employee’s excellence in the matters pertaining to::-

His present job His potential for a better jobpotential for a better job

:::Objectives Of Performance appraisal:::

Estimate gap between the actual and the desired performance.

Exercising organizational control. Feedback to the employees regarding their

past performance.

Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.

To judge the effectiveness of the other HR functions such as recruitment, selection, training and recruitment, selection, training and development.development.

To reduce the grievances of the employees.

::Appraisals Assist::

Employee Training Needs Assessment Organizational Performance Succession Planning TQM Change organizational Culture

ProcessEstablishing Standards

Communicating Standards and expectations

Measuring the actual performance

Comparing with standards

Providing feedback

Corrective Actions

Pre-requisites for Performance Appraisal

Documentation --continuous noting and documenting the performance

Standards / Goals --should be clear, easy to understand, achievable, motivating, time bound and measurable

Practical and simple format - The appraisal format should be simple, clear, fair and objective.

Evaluation technique – An appropriate evaluation technique should be selected

Communication –Expected results should be communicated to the employees as well as the evaluators

Feedback – Should be developmental rather than judgmental

Personal Bias --evaluators should be trained to carry out appraisals without personal bias

Purpose Of Performance Appraisal

0% 20% 40% 60% 80% 100%

Payroll

T&D needs

Gaps

Deciding future goals

Mobility

Others

(A Survey of 100 Companies)

Payroll and compensation decisions – 80%

Training and development needs – 71%

Identifying the gaps in desired and actual performance– 76%

Deciding future goals and course of action – 42%

Promotions, demotions and transfers – 49%

Other purposes – 6% (job analysis and providing superior support, assistance and counseling)

Performance Appraisals as Career Development

“Get paid according to what you contribute”

Performance appraisal as Career Development leads to the recognition of the work done by the employees

It is a link between the organizational goals and the

employees’ personal career goals.

Potential appraisal, a part of Performance appraisal, helps to identify the hidden talents and potential of the individuals

A positive feedback motivates employees to identify individual career developmental plans

Based on the evaluation, employees can develop :: Their career goals Achieve new levels of competencies Chart their career progression

Performance appraisal encourages employees to reinforce their strengths and overcome their weaknesses.  

::Approaches to Performance Appraisals::

Traditional approachTraditional approach Traditionally, P.A. has been used as just a

method for determining and justifying the salaries of the employees

Than it began to be used a tool for determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past performancepast performance of the employees

Traditional Approach…

A past oriented approach Focused only on the past performance

of the employees

Did not consider the developmental aspects of the employee performance

Modern approach

Performance appraisal processes are more formal and structured.

Apart from the routine HR Functions, Modern approach to performance appraisals includes a includes a feedback process

This improves the communicationimproves the communication between superior-subordinates

The modern approach to is a The modern approach to is a future future orientedoriented approach and is approach and is developmental in developmental in naturenature. This recognizes employees as . This recognizes employees as individualsindividuals and focuses on their and focuses on their development.  development.  

Balanced Scorecard

The balanced scorecard provides a list of measures that balance the organizations internal and process measures with results, achievements and financial measures.

The two basic features of the balanced scorecard are:

A balanced set of measures based on. the four perspectives of balanced scorecard

Linking the measures to Employee Performance

The 4 key areas::

The financial measures – Profits, increase in the market share, return on investments and other economic measures as a result of the actions taken.

The customers’ measures – customer satisfaction, the customer’s perspective about the organisation, customer loyalty, acquiring new customers. Number of customer complaints, The time taken to deliver the products and services, improvement in quality etc.

The internal business measures – These are the measures related to the organization’s internal processes which help to achieve the customer satisfaction.

Infrastructure, The long term and short term goals and objectives, Organizational processes and procedures, Systems and the human resources.

The innovation and learning perspective – organization's ability to learn, Innovations and improvements Key competencies Value added and the revenue per employee.

Methods of Performance appraisals

Traditional Methods ESSAY APPRAISAL METHOD STRAIGHT RANKING METHOD PAIRED COMPARISON CRITICAL INCIDENTS METHODS FIELD REVIEW CHECKLIST METHOD GRAPHIC RATING SCALE FORCED DISTRIBUTION

Modern Methods Assessment Center Human Resource Accounting Behaviorally Anchored Rating Scales MBO 360 Degree Appraisals

Appraisal as Employee Motivation Mechanism

Inaccurate Performance Review + Increased Salary = De-motivated Employee

Accurate Review + No Change in Salary = De-motivated Employee

Accurate Review + Increased Salary = Highly Motivated Employee

Arguments Against Performance Appraisal • Disparities between the theory and its application • PA is a bitter process for most of the employees • Creates emotional pressures and stress for the

employees

• PA is often looked upon as a tool to control the employees by the superiors which dampen the intrinsic motivation of the employees.

• PA process increases the dependency of the employees on their superiors

Performance appraisal…

…. process encourages accountability, approvals and discourages the spirit of creativity and initiative by employees and also Demotivates them

…are conducted by managers who are often not trained to be appraisers.

….This obstructs the genuine feedbackfeedback, leading to incorrect and unreliable data regarding the performance of the employees

Example:: BPOs’, Government Organizations Etc

MANAGING WITHOUT PERFORMANCE APPRAISALS The "appraisals and review meetings",

continuous accountability and check can cause emotional stress for the employees. Therefore, it is recommended to create such a work culture where

the employees are made responsible for their own performance and development

the manager’s / superior’s suggestions, inputs are encouraged and incorporated in the actions.

Changing pay practices--Periodic cost of living increases, rewards on some accomplishments, tem bonuses, profit and gain sharing

Motivating people—Challenging work, Reminding them about their personal goals

Creating an organization with a culture that Encourages creativity, Fosters innovative efforts and productivity, Teamwork, Reformulating strategic plans and assumptions

but can be effectively put into place without the need of performance appraisals

Performance Appraisal For Employees at Different Levels

For top level management Degree of organizational growth and

expansion Extent of achievement of organizational goals Contribution towards the society Profitability and return on capital employed

For middle level managers Performance of the departments or teams Co-ordination with other departments Optimal use of resources Costs Vs. revenues for a given period of time The communication with superiors and

subordinates

For front line supervisors Quantity of actual output against the targets Quality of output against the targets Number of accidents in a given period Rate of employee absenteeism

Global Trends In Performance Appraisal Program The focus of the performance appraisals is

turning towards career development Trend towards a 360-degree feedback

system The problems in the performance appraisal

processes are being anticipated and efforts are being made to overcome them.

Rank and Yank Strategy or “Up or Out Strategy

Team Performance Appraisal

Points to be Remembered

What is the purpose of performance appraisals? How should the self appraisal be used? How should the ratings be given if there has been a

change of supervisor or manager during the period of the appraisal?

How can input/feedback be collected for the appraisal process?

What if the employee refuses to agree or/and accept the review?

How do you deal with an average or a non-performer?

:::Don't let employees come into the Performance Appraisal blindly or leave blindly, without a sense of direction or accomplishment!:::

:::Thankyou:::