Performance Appraisal

Performance Appraisal

Definition It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development

Method of performance Appraisal Traditional methods 1. Alternation Ranking Method 2. Paired Comparison Method 3. Critical Incident Method Modern methods 6. 360 Degrees Feedback 7. Management By Objective (MBO)

Alternation Ranking Method Ranking employees from best to worst on a particular trait, choosing highest, then lowest, until all are ranked Alternation ranking Method

1. 2. 3. 4. 5. 6. 7.

……………………….. Highest ……………………….. ……………………….. ……………………….. ……………………….. ……………………….. ……………………….. Lowest

Paired Comparison Method Ranking employees by making a chart of all possible employees for each trait and indicating which is better employee of the pair. By this technique, each employee is compared with every trait with all the other persons in pairs once at a time. The results of the comparisons are tabulated, and a rank is assigned to each individual. Not suitable for larger groups

Paired Comparison Method For the trait “Quality of Work”

For the trait “Creativity”

Employee Rated

Employee Rated

As Compared to

A B C D E

As Compared to

A

+ + -

-

A

B C D E

- - - + + + + + + + + -

B C D E

Highest Rank - B

A B C D E -

-

-

-

+ - + + + + - + + - + + - - + Highest Rank - A

Critical Incident Method Keeping a record of uncommonly good or undesirable examples of an employee’s work relate behavior and reviewing it with the employee at predetermined times. The supervisor keeps a written record of the events (either good or bad) that can easily be recalled and used in the periodical or formal appraisal. Feedback is provided about the incidents during performance interview session.

Critical Incident Method Limitations: 3. 4. 5. 6.

Negative incidents are more noticeable than the positive ones Such close supervision may not be liked by the employee Supervisor may forget recording of certain incidents. The feedback may appear to be punishment

Critical Incident Method Critical Incidents of Purchase Officer which the Logistics or Material Manager may look for 1. He treated a salesman in a discourteous fashion 2. He helped an assistant to prepare an unusually different purchase order 3. He rejected a bid that was extremely overpriced 4. He persuaded a local vendor stock an important material needed by the firm 5. He failed to return a very important phone call 6. He improved the design of the internal material requisition form

Management By Objectives Peter Drucker - 1954

Management By Objectives 1. Described by Peter Drucker in 1954 2. It seeks to minimise external controls and maximise internal motivation through joint goal setting between the manager and the subordinates and increasing the subordinates own control of his work 3. It allows the subordinate to participate actively in the decisions that affect him directly 4. Drucker never regarded this tool in a narrow way rather he considered it as an approach to management philosophy.

Definitions – “The superior and the subordinates of an organization jointly define its common goals, define each individuals major areas of responsibility in terms of the results expected of him and use these measures as guide for operating the unit and assessing the contribution of each of its members”.

Definition “A system approach to managing an organisation, where those accountable for directing the organisation first determine where they want to take the organisation; a process requiring and encouraging all key management personnel to contribute their maximum to achieving the overall objectives; an effort to blend and balance all the goals of all key personnel; and an evaluation mechanism.”

MBO PROCESSES 1. 2. 3. 4. 5. 6. 7.

Formulating long range organizational goals Develop strategic objectives Develop departmental objectives Define group and individual objectives Formulate and implement action plan Performance reviews Provide feedback

MBO PROCESSES - 1

Formulating long range organizational goals Guided by the organizational mission statement Senior manager define critical long term objectives Determine how available resources will be used The process then leads to strategic planning activities It guides to cope with the changing environment.

MBO PROCESSES - 2

Develop strategic objectives Broad objectives are translated into specific measurable outcomes with clearly stated timeframes. Organizational objectives may include areas such as profitability, market share, and quality All objectives must be stated in clear terms.

MBO PROCESSES - 3

Develop departmental objectives Each department must develop a set of specific goals that will enable the organization to achieve its objectives. The departmental goals also must be stated in terms of measurable outcomes.

MBO PROCESSES - 4

Define group and individual objectives Setting of individual and group goals has to be done in a coordinated manner. Individual must clarify their roles and take responsibility for specific results. Individual goal setting is done in a collaborative manner Goal setting include both, personnel and professional objectives. (Research indicates that individual goals produce the most positive results when they are challenging and specific.)

MBO PROCESSES - 5

Formulate and implement action plan Action plan is needed to provide a way of attaining goals Action plan systematically identifies the  methods  activities &  resources required to accomplish objectives.

MBO PROCESSES - 6

Performance reviews Mangers and subordinates discuss problem and difficulties involved in completing the goals. These meetings evaluate individual performance based on degree to which targeted goals were actually achieved.  The meeting may provide opportunity for review and modify the goals in case they are outdated and unattainable. Managers and subordinates mutually agree upon goals and formulate strategy to achieve them.

Conclusion MBO Process in practice requires great analytical skill and clarity of purpose on the part of management as it involves people whose behavior is unpredictable.

360 Degrees Feedback

360 Degrees Feedback It is a systematic collection of performance data on an individual or group. It is derived from number of stakeholders The stakeholders –  the immediate superiors,  the team members,  the customers, and  the peers, including  the individual himself. In fact, anyone who has useful information on ‘how an employee does his job’ may be one of the appraisers.

360 Degree feedback Model MANAGER

PEERS

INDIVIDUAL

SUBORDINATE

CUSTOMER

Definition “ The systematic collection and feedback of performance data on individual or group derived from a number of stakeholders on their performance” Ward (1997)

Benefits of 360 Degree Feedback 1. It provides a broader perspective about an employees performance 2. It facilitates greater self development of the employees 3. It enables an employee to compare his or her perception about self with perceptions of others 4. It provides a formalised communication link between an employee and his or her customers 5. It makes employee to feel much more accountable to his or her internal or external customers 6. It is helpful in assessing soft skill of an employee 7. It identifies and measures interpersonal skills, customer satisfaction, and team building skills