Sandhya

Lesson-26 Performance Appraisal—Methods Newer Or Modern Methods of Appraisal As we have seen, most traditional methods emphasize either on the task or the worker's personality, while making an appraisal. In order to bring about a balance between these two, modern methods have been developed. Of such methods, the most important are: Appraisal by Results or Management by Objectives, Assessment Center Method. Behaviorally Anchored Rating Scales. Management By Objectives (MBO) Peter Drucker has evolved this method. MBO is potentially a powerful philosophy of managing and an effective way. The management by objectives concept is a basic technique. The application of this technique often succeeds or fails because of its interpretations. Definition: . . . The system of management by objectives can be described as a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual's major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members. Management by objectives is not a new technique. It was introduced as a supplementary management tool by Alfred Sloan in the early 1950s; however, Peter Drucker is credited with making it a central management concept in his classic management book, The Practice of Management, in 1954. This method of personnel evaluation followed closely after Drucker's introduction of MBO. During the late 1960s and early 1970s, MBO seemed to emerge as the dominant tool for organizational management. But many applications met with failure. The concept was challenged, and many discard it as a theoretical idea that could not be applied in practical situations. The causes of failure were in the implementation; they were not in the basic procedure. Objectives of MBO: It is result –oriented or it is the performance, which matters the most. It provides responsibility and accountability and recognizes that employees have needs for achievement and self-fulfillment. It meets this need by providing opportunities for participation in goal setting process. The process: Introduction of the concept scope and objectives of MBO to all employees in the organization who supervise one or more person.

Identify the key result areas for the organization as a whole and each unit / division separately. Establish short and long term objectives of each unit/ division and keeping in mind the overall objectives of the organization. Joint goal setting: the preparation by the subordinate appraise of written statements covering his understanding of the objectives of (a) his superior's job; (b) his own job; (c) the proper criteria of performance from his viewpoint; (d) the situation, including problems to be overcome; and (e) his plan of action to accomplish the objectives. This report is discussed with the supervisor for purposes of communication, analysis, modification or approval, and appraisal. Periodic evaluation and review of action and achievements. Giving feedback to the immediate subordinate on his weakness as well as reinforcing his strengths. As with MBO, a successful program with the communication necessary to achieve desired results requires commitment and dedication. In order for the manager to communicate his expectations effectively, he must invest the time required to learn the perceptions, work values, and objectives of his employees. Through this knowledge, the manager can achieve desired results in productivity by achieving what Drucker terms "worker-responsibility." Communication and feedback take many forms in an organization. Informal feedback is just as critical as the formal evaluation process. The single most important contribution to excellent performance lies in the informal, dayto-day interaction between an employee and his manager. In India, The ITC or Indian Tobacco Company is a very good example of the few organizations, which introduced MBO. The company realized that for MBO to work successfully there should be willingness to accept change, spend sufficient time, and put in hard work. It introduced MBO in five stages: A preliminary survey of the feasibility of MBO in ITC. An attempt to bring about changes in the attitude of managers to accept the new system. Participation by all in establishing key result areas and making departmental plans. Preparing individual action plans and introducing job review system. Evaluation of the performance. Benefits of MBO: MBO helps and increase employee motivation because it helps to relate an individual’s goals with the organizational goals. Managers are more likely to compete with themselves than with others. Since my targets are to be achieved by me only and hence attempts to better self performance becomes important. Since MBO focuses on providing clear targets to be achieved and the order of priority it helps to reduce role conflict and ambiguity. Role conflict arises when a person has to face conflicting demands from two or more supervisors; and role ambiguity is a situation when a person is uncertain as to how he will be evaluated, or what he has to achieve. MBO forces mangers to PLAN. Since target setting itself requires planning hence this process aids to planning MBO identifies problems better and early. Frequent review sessions help in this. Since it helps to identify performance deficiencies and enables the management and the employees to understand the training needs. Drawbacks:

MBO programme takes a great deal of time, energy and form- completing on the part of managers. It is very often difficult to apply MBO concepts to work habits. It is hard to think about the results of work rather than the work itself. Subordinates may try to set the lowest possible targets to avoid not meeting them. Behaviorally Anchored Rating Scales (BARS) This is a new appraisal technique, which has been recently developed. The procedure for BARS is usually five stepped. Generate Critical Incidents. Person who have the knowledge of a particular job are asked to describe situations or incidents whereby the effectiveness or ineffectiveness of an individual’s performance can be judged. Develop performance dimensions. The incidents are then clustered into smaller sets of performance dimensions and each dimension is the defined. Relocate incidents: any groups of people who also have knowledge then relocate the incidents. Rating of level of performance for each incident. Development of the final instrument. A set of incidents is used as “behaviour anchors” for the performance dimensions. For example, The BARS for the trait “knowledge and judgment” of salesman at a store Extremely good performance 7 Good performance 6 He is aware of prices of variety of products available at the store. Knows where what is kept. Reacts spontaneously to the customer’s queries and requests. Able to provide information as requested by the customer. Slightly good performance 5 When in doubt he is ready to check out about he price with a colleague Tries to sort out the customer’s queries and requests. Neither good nor bad performance 4 Does not do more than he is asked to Tries to sort out the customer’s queries and requests. Slightly poor performance 3 May be seen spending time in discussion about other things not related to the stores products. May not notice the entry of the customer at times Poor performance 2 In order to take a break he may lie to the customer about unavailability of stock Is not able to solve requests and queries of the customer. Extremely poor performance 1 A number of critical incidents may be collected and grouped into say following performance criteria: Knowledge and judgment Skill in human relations Convincing ability Skill in monetary transactions Though BARS is a more time consuming process but it has some advantages:

Results are sufficiently accurate, since it is done by persons expert in the particular field. It sets clear standards. The critical incidents along the scale help to clarify what is meant by “extremely good performance, average performance and so forth. The use of this method may be useful in giving feedback to the persons being appraised. The technique is not biased by the evaluation of the rater. The assessment center Method The assessment center concept was initially applied to military situations by the German Army in 1930s.the most important feature of this method is job related simulations or mock situations. These simulations involve characteristics that managers feel are important for job success. The evaluators observe and evaluate participants as they perform activities commonly found in these higher-level jobs. Some of the other features of this system are: The use of situational exercises (such as in-basket exercise, a role-playing incident and leaderless group discussion); Evaluations are drawn from experienced managers with proven ability at different levels of management; They evaluate all employees, both individually and collectively, and each candidate is given one of the four categories; more than acceptable, less than acceptable and unacceptable; The members prepare a summary report, and a feedback on face-to-face basis is administered to all the candidates who ask for it. The major limitations are: It is a time consuming process. A relatively expensive process. Assessment center rating are said to be strongly influenced by participants interpersonal skills.