Tools For Measuring Performance

TOOLS FOR MEASURING PERFORMANCE

TWO TYPES OF APPROACHES n 

Traditional Approach - Primarily concerned with the overall organization

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n 

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and involved with past performance.

Modern Approach - Viewed the employees as individuals and forward looking through the use of goal setting.

Traditional Methods n n n n n n n n

Graphic Rating Scales Method Confidential Report Straight Ranking Method Paired Comparison Method Forced Comparison Method Grading System Checklist Method Critical Incident Method

Modern Methods n n n n

n n n

n

HR Scorecard HR Accounting Competency Mapping Assessment and Development Centre 360 Degree Appraisal 540 Degree Appraisal Management by Objectives (MBO) Behaviorally Anchored Rating Scale (BARS)

Purposes of Traditional Performance Appraisal n

Promotion, separation, and transfer decisions

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Feedback to the employee regarding how the organization viewed the employee's performance

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Criteria for evaluating the effectiveness of selection and placement decisions

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Reward decisions, including merit increases, promotions, and other rewards

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Ascertaining and diagnosing training and development decisions

n

Criteria for evaluating the success of training and development decisions

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Information upon which work scheduling plans, budgeting, and human resources planning can be used

GRAPHIC RATING SCALES METHOD n

A form is used to evaluate the performance of the employees

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A variety of traits may be used in this device, the most common being quality and quantity of work

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Easy to understand and use.

n

Permits statistical tabulation of scores of employees

CONFIDENTIAL REPORTS 

Descriptive report n

Prepared at the end of the year

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Prepared by the employee’s immediate supervisor

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The report highlights the strengths and weaknesses of employees

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Prepared in Government organizations

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Does not offer any feedback to the

STRAIGHT RANKING METHOD n

Rated all the employees doing a specific job from best to poorest on a specific criteria.

n

Easy to select best and poor one, but it is difficult identify moderate employee.

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PAIRED COMPARISONS METHOD

n

Each worker is compared with all other employees in a group

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For several traits paired comparisons are made, tabulated and then rank is assigned to each worker

n

This method is not applicable when the group is large

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For ce d D ist r ib u t ion M e t h od s nThe

rater is asked to appraise the employee according to

predetermined distribution scale. nTwo

criteria used for rating are: job performance and

promotability. nA

five point performance scale is also used without mentionin

any descriptive statements. nThe

worker is placed between two extremes of “good” and

“bad” performance.

GRADING SYSTEM n

In this method, performance of employees are determined in advance and defined as categories. The categories can be grade ‘A’ for an outsourcing performance, grade ‘B’ for an excellent performance, ‘C’ can be for average and ‘D’ for poor etc.

Checklist Method

nA

checklist is a set of object ives or descript ive

st at em ent s about t he em ployee and his behavior. nUnder

weight ed checklist , value of each quest ion m ay be weight ed.

nExam ple: nIs

t he em ployee really int erest ed in t he t ask assigned? Yes / No

Cr it ica l In cid e n t Te ch n iq u e

nManager

prepares list s of st at em ent s of very

effect ive and ineffect ive behavior of an em ployee nThese

crit ical incident s represent t he

out st anding or poor behavior of t he em ployees

Cr it ica l In cid e n t Te ch n iq u e Example: nJuly

20 - Sales clerk patiently attended to the customers

complaint. He is polite, prompt, enthusiastic in solving the customers’ problem nJuly

20 - The sales assistant stayed 45 minutes beyond

his break during the busiest part of the day. He failed to answer store manager’s call thrice. He is lazy, negligent, stubborn and uninterested in work

Critical Incident Technique

n

Limitation of this technique are: nNegative

incidents may be more noticeable than positive

incidents. nSupervisors have a tendency to unload a series of complain complai about incidents. nResults in very close supervision which may not be liked b the employee. nThe recording of incidents may be a chore for the manager concerned who may be too busy or forget to do it.

FREE ESSAY APPRAISAL METHODS

n

n

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The supervisor continuously observes and writes a report about employees assessment. Essay evaluation is a non-quantitative technique of appraisal. The essay method may suffer from personal and human bias.

Essa y Eva lu a t ion n nThe

r a t e r is a sk e d t o e xp r e ss t he st r ong a s w e ll a s w e a k p oint s of e m p loye e ’ s b e ha vior

nThe

r a t e r con sid e r s t he e m p loye e ’ s : nJob

k n ow le d g e a n d p ot e n t ia l

nUn d e r st a n d in g

of com p a n y’ s p r og r a m s, p olicie s,

ob je ct ive s e t c nRe la t ion

w it h co-w or k e r s a n d su p e r visor s

nPla n n in g , nAt t it u d e

n

or g a n izin g a n d con t r ollin g a b ilit y

a nd p e r ce p t ion

Essa y Eva lu a t ion

nThis

method has the following limitations: nHighly

subjective

nSupervisor nDifficult

may write biased essay

to find effective writers

nA

busy appraiser may write the essay hurriedly without assessing properly the actual performance of the worker

nIf

the appraiser takes a long time it becomes uneconomical from the view point of the firm

Group Appraisal nEmployee nThe

is appraised by a group of appraisers.

group consists of nImmediate nOther

supervisor of the employee

supervisors who have close contact with the

employee’s work. nManager

or head of the departments.

nConsultants

or Clients

Modern Approach - HR Scorecard n

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

HR Accounting n

n

n

n

HR accounting method attaches money value of a firms internal Human Resources and external customer’s goodwill. Performance is judged in terms of costs and contributions of employees. Ideally the contribution of the employees should be greater than the cost incurred on them. When competent and well trained employees leave an organisation, the human asset is decreased.

Competency Mapping n

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First popularized by Boyatzis (1982) with research result on clusters of competencies: “A capacity that exists in a personal that leads to behaviour that meets the job demands within parameters of organizational environment, and that, in turn brings about desired results”

Assessment and Development Centre n

n

An assessment center can be used as a tool for competence development. The major competencies that are judged in assessment centers are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centers also an effective way to determine the training and development needs of the targeted employees.

360o Appraisal System nIt

is a systematic collection and feedback of performanc

data on an individual or group, derived from a number of stakeholders nData

is gathered and fed back to the individual

participant in a clear way designed to promote understanding, acceptance and ultimately behavior n

540 Degree Appraisal n

n

n

General Electric Company, USA was the first to try out this concept in early 1990s. Feedback from stakeholders – superiors, subordinators, peers, internal and external customers and suppliers In 540 degree feedback method customers and suppliers also evaluate the performance to differentiate from the 360 degree performance appraisal.

Management by Objectives (MBO) n

MBO emphasizes collectively set goals that are tangible, verifiable, and measurable

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Focuses attention on goals rather than on methods

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Concentrates on Key Result Areas (KRA)

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Systematic and rational technique that allows management to attain maximum results from available resources by

Ke y Ele m e n t s Of M BO nArranging

organizational goals in a means-ends chain

nEngaging

in joint goal setting

nThis

process has the following steps: nIdentify nDefine

KRAs

expected results

nAssign

specific responsibilities to employees

nDefine

authority and responsibility relationship

nConducting

periodic progress review

nConducting

annual performance review

Behaviorally Anchored Rating Scale (BARS) 

Combination of rating scale and critical incidence n

Steps: n

Collect critical incidents

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Identify performance dimensions

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Reclassification of incidents

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Assigning scale values to incidents

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Producing the final instrument