Session 7 Performance Appraisal System
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Transcript of Session 7 Performance Appraisal System
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PERFORMANCE APPRAISAL SYSTEMCorporate Score Card
OUTLINE
Definition
MeaningObjective /Need/Purpose / Importance
Company Strategies and PAStechniques
Process of PA
Essentials of Good PASMethods of PAS
Problems of PA
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Definition & Meaning
It is the systematic evaluation of the individual with
respect to his or her performance on the job and his or herpotential for development
Performance refers to the accomplishment of tasks
A formal, structured system of measuring and evaluatingan employee's job related behaviors and outcomes todiscover how and why the employee is presently performingon the job and how the employee can perform moreeffectively in the future so that all the three cadres arebenefited i.e. the employee, organization, & society
PA indicates the desired performance level, level of actual
performance and the gap between these two
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Objective /Need/Purpose / Importance
It helps in rectifying performance deficiencies & to set
new standards Eg.- Raymonds
Effective to take decisions regarding promotions andtransfers, pay raise where regular pay scales have not beenfixed Eg- Indian Rayon
To contribute to the employee growth & developmentthrough training and development Eg.-Tata Power
To provide information for making decision regarding layoff, retrenchment etc. Eg- Hyundai Engg
To prevent grievances and in disciplinary activities EgGalxo
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Repetition of above slide into 4 broad categories
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Company Strategies and PAStechniques
Strategies PA- Techniques Appraiser
Stability &
Sustainable
Growth
Traditional Superior
Expansion,Diversification,
M &A
Modern 360 DegreeAppraisal
Retrenchment Traditional Superior
Low Cost
Leadership, New
Product
Differentiation
Modern 360 Degree
Appraisal
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Types of Appraisal Confirmation AppraisalThis determines whether the
assessment of the organization as regards the knowledge,skills and experience of the employee has been provenduring the testing period.
Potential Appraisal
People at the senior most levels inthe organizations hierarchy generally carry out potentialappraisals. It is more objective
Periodic AppraisalSeveral organizations carry thepractice of appraising their performance against targets aswell as assessing the candidates traits. Eg aggressivenessv/s assertiveness
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Degrees of Appraisals
90 degree appraisal Boss & subordinate
180 degree appraisal Boss ,subordinate, peer
280 degree appraisal not applicable
360 degree appraisal Boss, subordinate,peers,
customers / clients
720 degree appraisal Under development
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Process of PA
Objectives of Performance Appraisal
Establish Job Expectations
Design an Appraisal Programme
Appraise Performance
Performance Interview
Use Appraisal Data for Appropriate Purposes
Individual
Systems
Formal /Informal
App
Whose performance is
app ?
Who are raters
When to evaluate
How to evaluate
What methods to be used
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Essentials of Good PASStandardized PAS
Uniformity of PAS
Defined Performance Standards
Trained Raters
Usage of relevant rating tools or methods
PAS should be based on job analysis
Consistent Documentation
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Difference PA & PMS
Performance Appraisal Performance Mgmt System
PA is just a mechanism of controlling
employee performance through--salary
administration, reward administration,
promotion and taking disciplinary action. it
focuses on the method of appraisal.
PM is about managing the performance of the
employees by setting KRAs( key result areas)
and KPAs ( key performance areas) so that
people know that what targets they are expected
to achieve and what activities will be required to
accomplish your goals
PA the motive is to reward
People at the end or in the midst of theyear by means of incentives
PM the motive is to manage theperformance throughout the year and not
just judging it at the end of the year.
The main aim is to reward and notdevelop. main aim is development of performance tomake it reach to the level of excellence.
PA is just a systematic evaluation of theemployee based on traits and
performance.
PMs has 3 stages involved in it goal setting& motivation; encouraging process that is
applied; rewards and consequences.
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Methods of PAS
Past Oriented Future Oriented
Rating Scales
Checklists
Forced Choice Methods
Forced Distribution Method
Critical Incident Method
Behaviorally Anchored Scales
Field Review Method
Performance Tests & Observations
Annual Confidential reports
Essay Method
Comparative Evaluation Approach
Management By Objectives
360 Degree Appraisal
Psychological Appraisal
Assessment Centers
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Traditional Techniques Rating Scales
Simplest and popular method
Typical rating scale consisting of numerical scales each representing a
job related performance criterion ( eg- attendance, punctuality
cooperation etc rated from excellent to poor )
The rater calculates the no of score and links the incentives or salary
depending upon the score.
Checklists
A check list of statements on the traits of the employee and his or her
job is prepared in two columns Yes & No
Once this list is checked then the total calculated
Its easy, economical, ltd training required for the rater.
But has halo effect as disadvantage
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Checklist Appraisal Questions
Yes No1. Does the employee willingly cooperate
with others in completing work assignments? ___ ___2. Does the employee have adequate job knowledge
to perform duties in a satisfactory manner? ___ ___3. In terms of quality, is the employees work acceptable? ___ ___4. Does the employee meet deadlines for the completion
of work assignments? ___ ___5. Does the employees record indicate ___ ___
unexcused absences?
6. Does the employee follow safety rules and regulations? ___ ___
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Graphic Rating ScaleName_____________________________ Dept.___________________________Date_______________
Outstanding Good Satisfactory Fair Unsatisfactory
Quantity Volume of acceptableof work work under normal conditions ___ ___ ___ ___ ___
Comments:
Quality Thoroughness, neatness, and ___ ___ ___ ___ ___of work accuracy of work
Comments:
Knowledge Clear understanding of the facts ___ ___ ___ ___ ___of job or factors pertinent to the job
Comments:
Personalqualities Personality, appearance, ___ ___ ___ ___ ___
sociability, leadership, integrityComments:
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Performance Tests & Observations
With a ltd no of jobs, employee assessment may be based upon a test ofknowledge or skills. The test may be of paper and pencil variety or an
actual demonstration of skills. These should be reliable and validated.Annual Confidential reports
Confidential records are maintained mostly in govt depts. Though itsapplication in the industry is not ruled out. For eg. ITI called this ACR and
measured attendance, self expression, ability to work with others etc
Essay Method
Here we emphasize the overall performance based on Ss & Ws ofemployees performance rather than specific dimensions
By asking supervisors to enumerate specific egs of employee behaviorminimizes bias to some extent.
Essays are not amenable for evaluation and analysis
Quality of analysis depends upon the writing ability and not on employeeperformance
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Cost Accounting approachThis method evaluates performance form the monetary returns the employee yields to his orher organization.
A relationship is established between the cost included in keeping the employee and thebenefit the organization derives from him or her.
Comparative Evaluation Approach
These are collection of different methods that compare one workers performance withthat of his or her coworkers.
Generally conducted by supervisors. They are useful in deciding merit pay increases,promotions, and organizational rewards.
Ranking Method
In the first one the supervisor ranks his or her subordinates in the order of their merit.The rater finds the employee with best performance and worst performance rates theformer best and later worst.Eg- Bajaj Tempo &BASF
Paired Comparison Method
The appraiser appraises each employee with every other employee one at a time. EgGodrej Soaps, NOCIL
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Forced Choice Methods
The rater is given statements about the employees. These statements have to bearranged in blocks of two or more. and the rater indicates which statement is
most or least descriptive of the employeeThe rater is forced to select statements which are readymade.
Absence of personal bias , Disadvantage- if statements not properly framed Eg-Ceat , Modern threads follow this
Forced Distribution Method
This method prevents the rater from rating the employee too high or too low.
The rater has to distribute his rating in a pattern to confirm normal frequencydistribution
It is assumed that the employee performance levels conform to a bell shapedcurve.
Critical Incident MethodThe approach focuses on certain critical behaviors of an employeethat make all the difference between effective and no effectiveperformance of a job. Such incidents are then recorded by thesuperiors. Evaluation is based on actual job behavior.
M d M th d
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Modern Methods
MBOEg - L & T , HALIt is a process whereby the superior and subordinate
managers of an organization jointly identify its commongoals, define each individuals major areas of responsibilityin terms of results expected of him and use these measures asguides for operating the unit and assessing the contributions
of each of its membersDefn 2
MBOA system approach to managing and organizationwhere those accountable for directing the organization first
determine where they want to take the organizationA process requiring & encouraging all key managementpersonnel to contribute their maximum to achieve overallobjectives
An effort to blend & balance all the goals of all key personnel
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Objectives
To change behaviors and attitudes towards
getting the job done.
It is results oriented, it is performance that counts
It is management system and philosophy thatstress goals rather than methods
It provides responsibility and accountability andrecognizes that employees have needs forachievement and self fulfillment
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Process
Set Organizational Goals
Joint Goal Setting
Performance Reviews
Set Check posts
Feedback
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BenefitsIt increases employee motivation
Managers are more likely to compete withthemselves
It reduces role conflicting and ambiguity
It forces & aids in planning
It identifies problems at an early stage
It helps individual manager to develop interpersonal
skills, leadership skills , listening, planning, counseling,motivatin and evaluatin
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Assessment Centers First developed in the US & UK 1943
Used for evaluating executive or supervisory potential. A central location where mgrs come together have their
participation in job related exercises evaluated by trainedobservers
To observe the participants over the period of time byobserving their behavior through various exercises like inbasket, work groups, role playing etc.
Characteristics such as assertiveness, persuasive ability,planning and organization ability self confidence creativityetc is checked.
Eg -Crompton Greaves,Eicher, HLL, Modi Xerox,ICICI Bank, Tatas, Birla Group
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Psychological appraisal
They consist of in-depth interviews, psychological tests,consultations and discussions with the supervisors,
employees etc
An evaluation of the employees intellectual, emotional,
motivational and other related characteristics thatsuggest individual potential and may predict future
performance.
From these evaluations placement and development
decisions may be made to shape the person career.
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Behaviorally Anchored Scales
Sometimes called behavioral expectation scale are
rating scales whose scale points are determined by
statements of effective and ineffective behavior. They
are said to be behaviourally anchored in that the scales
represent a range of descriptive statements of behaviour
varying from the least to the most effective
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Behaviorally AnchoredRating Scale (BARS)
Engineers Name: _________________________
9 ___ This engineer applies a full range of technical skills and can beexpected to perform all assignments in an excellent manner.
8 ___
7 ___ This engineer is able to apply in most situations a good rangeof technical skills and can be expected to perform mostassignments well.
6 ___
5 ___ This engineer is able to apply some technical skills and canbe expected to complete most assignments adequately.
Problems of PA
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Problems of PA1. Rating Biasesage, color, sex, favoritism etc
2. Halo Effectthe tendency of raters to excessively depend on therating of one trait or behavioral considerations. To minimize this oneshould rate the employees on one trait and then the next. Eg-employee working late be rated high on productivity.
3. Error of Central TendencyRaters follow a play safe policywherein they rate the employees near the central point and avoid
them rating towards the ends.4. Leniency & Strictnessthis crops up when some raters have a
tendency to be liberal in their rating.
5. Personal Prejudiceif the rater dislikes an employee he may ratethem at the lower end, which distorts the rating purpose.
6. Recency EffectRaters generally remember the recent actions of theemployees and rate them
7. Failure of Superiors
8. Negative Ratings
9. Horns effect
the appraiser bases his report on negative trait notgiving any weight age to positive traits
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Tackling the Challenges in PA
Open Meeting
Encouraging Employees
AppraiserTelling Facts
Counseling Meetings
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360 Degree Appraisal
Immediate Supervisors
Peers /Subordinates
Self Appraisals
Users oftheservices /Consultants
Eg- Ponds, Grasim, Hewlett Packard, Colgate - Palmolive
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The Concept
For example, subordinate assessments of a supervisors performance can provide
valuable developmental guidance, peer feedback can be the heart of excellence in
teamwork, and customer service feedback focuses on the quality of the teams or
agencysresults.
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The Process
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Companies using 360 degreeperformance appraisalsBellcore
International
Ltd(1998)
Johnson &
Johnson
Ltd(1980s)Wipro
Technologies Ltd
(Dec17th 2002)
Xerox (1980s)
IBM (1980)
Bell Atlantic (1980)
Co examples of
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Co examples of
Performance Appraisal System
Co Name PA System
Xerox Provide a core set of metricsfor use across the
organizationToyota Focus performance reviews
on goals rather thannumbers to ensure
employee alignmentFedex Design a balance scorecard
performance mgmt system.
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Modern performance review
Goal Setting
Progress Review
Performance Review
720 Feedback provides a comparison of a participant'sresults over a period of time, often 12-18 months. This
comparison informs participants of their developmental
progress and gives them an opportunity to update and
change their action plan.
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Bell shaped appraisal in BPO
A
B+ B+
BB
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Performance appraisal at TCS
Balance score card on four parameterson 1-5 scale
Financial
Internal Customers Growth
Five scale = superstar One scale = underperformer
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Performance appraisal at Sunmicro system
Forced ranking - rank and yank
Employees are ranked in three groups
top 20% - superior
next 70% - standard
remaining 10% - underperformers
Forced ranking - rank and yank in
Enron corporation produced hotbed ofachievers" -