Unit - 3 Performance Appraisal

BBA Semester - IIIH.R.M & OB Contents Concept Objectives of Performance Appraisal Process Methods- Uses and Limitations 1

BBA Semester - IIIH.R.M & OB Definitions of Performance Appraisal Wendell French, “the formal, systematic assessment of how well employees are performing their jobs in relation to established standards, and the communication of that assessment to employees” 2

BBA Semester - IIIH.R.M & OB Concept of Performance Appraisal Performance Appraisal is a method which involves — –Setting Work Standards –Assessing Actual Performance –Providing Feedback to the Employees 3

BBA Semester - IIIH.R.M & OB Contents Concept Objectives of Performance Appraisal Process Methods- Uses and Limitations 4

BBA Semester - IIIH.R.M & OB Objectives Feedback to Employee Compensation Decisions Reckoner for Promotion / Demotion /Transfer Inputs for Personal Development Reduce Subjectivity Clarity for the Employee Improves Supervision 5

BBA Semester - IIIH.R.M & OB Contents Concept Objectives of Performance Appraisal Process Methods- Uses and Limitations 6

BBA Semester - IIIH.R.M & OB Who will Appraise? Immediate Supervisor Employee’s Peers Self Appraisal Employee’s Subordinates Higher Level Manager Personal Department Specialist 7

BBA Semester - IIIH.R.M & OB When to Appraise? Periodic Appraisals –Quarterly, Bi-annually, Yearly 8

BBA Semester - IIIH.R.M & OB What to Appraise? What do we want to evaluate? Extracted from the Job Analysis Mostly Organisational Goals which the employee was responsible for Can also have some Softer Aspects 9

BBA Semester - IIIH.R.M & OB Process of Performance Appraisal Job Analysis –Understanding the deliverables –Detailing the Job Description Establishing Standards of Performance –Setting Performance Standards –Benchmarks to Measure Performance –Attainable by a Normal Employee –Clear & Understandable 10

BBA Semester - IIIH.R.M & OB Process of Performance Appraisal Communicating Performance Standards –Appraiser vs. Appraisee –Both should be communicated the standards –Communication should be written Measuring Actual Performance –Objective Measures: Quantitative & Verifiable –Subjective Measures: Personal Standards & Opinions 11

BBA Semester - IIIH.R.M & OB Process of Performance Appraisal Comparing Actual Performance vs. Standards –Note deviations –Could be both positive & negative –Reasons for the deviation –Analysis of Strengths & Weaknesses Initiating Corrective Action –Positive: Discussion & Improvement Plan –Negative: Scolding & Warning 12

BBA Semester - IIIH.R.M & OB Essentials of a Good Appraisal Reliability Job Related Standardisation Training to Appraisers Open Communication Employee Access to Results Clear Objectives 13

BBA Semester - IIIH.R.M & OB Contents Concept Objectives of Performance Appraisal Process Methods- Uses and Limitations 14

BBA Semester - IIIH.R.M & OB Performance Appraisal Methods Broadly of two types: –Traditional Methods (TM) –Modern Methods (MM) 15

BBA Semester - IIIH.R.M & OB TM: Unstructured Method Appraiser describes his impression Unstructured manner Highly subjective in nature Useful at lower levels 16

BBA Semester - IIIH.R.M & OB TM: Straight Ranking Method Ranking of all the employees Same unit, same work profile employees Ranking from best to poorest Highly subjective 17

BBA Semester - IIIH.R.M & OB TM: Paired Comparison Method Employees of a group are compared with one another, one at a time Number of comparisons = (N(N-1))/N Each employee is compared with the other 18

BBA Semester - IIIH.R.M & OB TM: Grading Method Certain categories / grades are determined in advance Grades are based on a variety of parameters Actual performance is compared with parameters to allot a grade 19

BBA Semester - IIIH.R.M & OB TM: Critical Incident Method Performance rated on the basis of certain events that occurred during the performance of the job Incidents represent the outstanding / poor behaviour of the employee Under this technique the behaviour of the employee in all significant incidents is recorded in a book and reviewed at the end 20

BBA Semester - IIIH.R.M & OB MM: Behaviorally Anchored Rating Scales (BARS) Rating scales are created using the following approach – –Identify Critical Incidents –Select Performance Dimensions –Retranslate Incidents –Assign Scale Values Rate the employee on the scale 21

BBA Semester - IIIH.R.M & OB MM: Management By Objectives (MBO) What – How approach? Substitutes good intentions with a process where everything is put in black & white Process –Define Role –Define KRAs –Indicators of Effectiveness –Set SMART objectives –Monitor 22

BBA Semester - IIIH.R.M & OB MM: 360 Appraisal 3 levels of employees rate the performance –Superior –Peers –Subordinates Holistic view Rules out the bias of any one person 23