hr.pfrmns aprazl methods

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FEATURES , BENEFITS & METHODS OF

³ PERFORMANCE APPRAISAL ¶¶

QUESTION:

Define performance appraisal features,it¶s benefits and explain different methodsof performance appraisal.

ANSWER:

Basic Purposes And Features of Performance Appraisal:

Effective performance appraisal systems contain two basic systems operating inconjunction: an evaluation system and a feedback system.

The main aim of the evaluation system is to identify the performance gap (if any).This gap is the shortfall that occurs when performance does not meet the standardset by the organization as acceptable.

The main aim of the feedback system is to inform the employee about the quality

of his or her performance. (However, the information flow is not exclusively oneway. The appraisers also receive feedback from the employee about job problems,etc.)

One of the best ways to appreciate the purposes of performance appraisal is to look at it from the different viewpoints of the main stakeholders: the employee and theorganization.

Employee ViewpointFrom the employee viewpoint, the purpose of performance appraisal is four-fold:

(1) Tell me what you want me to do

(2) Tell me how well I have done it

(3) Help me improve my performance

(4) Reward me for doing well.

Organizational ViewpointFrom the organization's viewpoint, one of the most important reasons for having a



system of performance appraisal is to establish and uphold the principle of accountability.

For decades it has been known to researchers that one of the chief causes of organizational failure is "non-alignment of responsibility and accountability." Non-alignment occurs where employees are given responsibilities and duties, but arenot held accountable for the way in which those responsibilities and duties are

performed. What typically happens is that several individuals or work units appear to have overlapping roles.

The overlap allows - indeed actively encourages - each individual or business unitto "pass the buck" to the others. Ultimately, in the severely non-aligned system, noone is accountable for anything. In this event, the principle of accountability breaksdown completely. Organizational failure is the only possible outcome.

In cases where the non-alignment is not so severe, the organization may continueto function, albeit inefficiently. Like a poorly made or badly tuned engine, the non-aligned organization may run, but it will be sluggish, costly and unreliable. One of the principal aims of performance appraisal is to make people accountable. Theobjective is to align responsibility and accountability at every organizational level.

Benefits of Appraisal:

Perhaps the most significant benefit of appraisal is that, in the rush and bustle of daily working life, it offers a rare chance for a supervisor and subordinate to have"time out" for a one-on-one discussion of important work issues that might nototherwise be addressed.

Almost universally, where performance appraisal is conducted properly, both

supervisors and subordinates have reported the experience as beneficial and positive.

Appraisal offers a valuable opportunity to focus on work activities and goals, to

identify and correct existing problems, and to encourage better future performance.Thus the performance of the whole organization is enhanced.

For many employees, an "official" appraisal interview may be the only time theyget to have exclusive, uninterrupted access to their supervisor. Said one employeeof a large organization after his first formal performance appraisal, "In twenty



years of work, that's the first time anyone has ever bothered to sit down and tell mehow I'm doing."

The value of this intense and purposeful interaction between a supervisors and

subordinate should not be underestimated.

Motivation and Satisfaction Performance appraisal can have a profound effect on levels of employeemotivation and satisfaction - for better as well as for worse.

Performance appraisal provides employees with recognition for their work efforts.The power of social recognition as an incentive has been long noted. In fact, thereis evidence that human beings will even prefer negative recognition in preference

to no recognition at all.

If nothing else, the existence of an appraisal program indicates to an employee thatthe organization is genuinely interested in their individual performance anddevelopment. This alone can have a positive influence on the individual's sense of worth, commitment and belonging.

The strength and prevalence of this natural human desire for individual recognitionshould not be overlooked. Absenteeism and turnover rates in some organizationsmight be greatly reduced if more attention were paid to it. Regular performanceappraisal, at least, is a good start.

Training and Development

Performance appraisal offers an excellent opportunity - perhaps the best that willever occur - for a supervisor and subordinate to recognize and agree uponindividual training and development needs.

During the discussion of an employee's work performance, the presence or absenceof work skills can become very obvious - even to those who habitually reject theidea of training for them!

Performance appraisal can make the need for training more pressing and relevant by linking it clearly to performance outcomes and future career aspirations.

From the point of view of the organization as a whole, consolidated appraisal datacan form a picture of the overall demand for training. This data may be analysed

by variables such as sex, department, etc. In this respect, performance appraisalcan provide a regular and efficient training needs audit for the entire organization.



Recruitment and Induction

Appraisal data can be used to monitor the success of the organization's recruitmentand induction practices. For example, how well are the employees performing whowere hired in the past two years?

Appraisal data can also be used to monitor the effectiveness of changes inrecruitment strategies. By following the yearly data related to new hires (and givensufficient numbers on which to base the analysis) it is possible to assess whether the general quality of the workforce is improving, staying steady, or declining.

Employee Evaluation Though often understated or even denied, evaluation is a legitimate and major objective of performance appraisal.

But the need to evaluate (i.e., to judge) is also an ongoing source of tension, sinceevaluative and developmental priorities appear to frequently clash. Yet at its most

basic level, performance appraisal is the process of examining and evaluating the performance of an individual.

Though organizations have a clear right - some would say a duty - to conduct suchevaluations of performance, many still recoil from the idea. To them, the explicit

process of judgement can be dehumanizing and demoralizing and a source of

anxiety and distress to employees.

It is been said by some that appraisal cannot serve the needs of evaluation anddevelopment at the same time; it must be one or the other.

But there may be an acceptable middle ground, where the need to evaluate

employees objectively, and the need to encourage and develop them, can be balanced.

METHODS OF PERFORMANCE APPRAISAL:

1.Management by objectives.

2.360 Degree Appraisal.

3.Behavioral Observation Scale (BOS).

4.Behavoiraly Anchored rating Scales (BARS).



Management By Objectives (MBO)

The use of management objectives was first widely advocated in the 1950s by thenoted management theorist Peter Drucker.

MBO (management by objectives) methods of performance appraisal are results-oriented. That is, they seek to measure employee performance by examining theextent to which predetermined work objectives have been met.

Usually the objectives are established jointly by the supervisor and subordinate. An

example of an objective for a sales manager might be: Increase the gross monthlysales volume to $250,000 by 30 June.

Once an objective is agreed, the employee is usually expected to self-audit; that is,

to identify the skills needed to achieve the objective. Typically they do not rely onothers to locate and specify their strengths and weaknesses. They are expected tomonitor their own development and progress.

AdvantagesThe MBO approach overcomes some of the problems that arise as a result of

assuming that the employee traits needed for job success can be reliably identifiedand measured.

Instead of assuming traits, the MBO method concentrates on actual outcomes.

If the employee meets or exceeds the set objectives, then he or she has

demonstrated an acceptable level of job performance. Employees are judgedaccording to real outcomes, and not on their potential for success, or on someone'ssubjective opinion of their abilities.

The guiding principle of the MBO approach is that direct results can be observed,whereas the traits and attributes of employees (which may or may not contribute to

performance) must be guessed at or inferred.

The MBO method recognizes the fact that it is difficult to neatly dissect all thecomplex and varied elements that go to make up employee performance.

MBO advocates claim that the performance of employees cannot be broken up intoso many constituent parts - as one might take apart an engine to study it. But put allthe parts together and the performance may be directly observed and measured.



DisadvantagesMBO methods of performance appraisal can give employees a satisfying sense of autonomy and achievement. But on the downside, they can lead to unrealisticexpectations about what can and cannot be reasonably accomplished.

Supervisors and subordinates must have very good "reality checking" skills to useMBO appraisal methods. They will need these skills during the initial stage of objective setting, and for the purposes of self-auditing and self-monitoring.

Unfortunately, research studies have shown repeatedly that human beings tend tolack the skills needed to do their own "reality checking". Nor are these skills easilyconveyed by training. Reality itself is an intensely personal experience, prone to allforms of perceptual bias.

One of the strengths of the MBO method is the clarity of purpose that flows from aset of well-articulated objectives. But this can be a source of weakness also. It has become very apparent that the modern organization must be flexible to survive.Objectives, by their very nature, tend to impose a certain rigidity.

Of course, the obvious answer is to make the objectives more fluid and yielding.

But the penalty for fluidity is loss of clarity. Variable objectives may causeemployee confusion. It is also possible that fluid objectives may be distorted todisguise or justify failures in performance.

360 DEGREE APPRAISAL:

A 360-degree performance appraisal system is a multisource assessment approachthat taps the collective wisdom of those who work closely with an employee. Theemployee and their supervisors, colleagues, direct reports (subordinates), internalcustomers, external customers, and others may be part of the evaluation process.

Proponents of the 360-degree feedback approach offer it as a ³progressive´ meansof conducting performance appraisal. Many contend that 360-degree feedback systems and other forms of multisource or multirater assessment methods in

organizations have evolved from an innovative ³nice-to-have´ techniqueadministered only to the most senior levels to a ³must-have´ tool for integrationinto overall performance and human resource management strategies. Thesesystems appear well suited for the flexible, team-based, change-orientedorganizational cultures of many organizations today.

360-Degree systems are gaining popularity because they tend to reduce the



problems of previous generations of assessment methods. 360-Degree appraisalmoves the manager (as appraiser) back into the ³comfort zone´ as she or he is nowonly one among a number of assessors. It greatly reduces the problems of centraltendency, positive skewness, and ³halo effects´ in ratings that plague the boss-subordinate approach. 360-Degree appraisal reduces defensiveness on the part of the appraisee because there are a variety of assessors, feedback is presented asmore balanced, and it is said to have greater face validity. It requires organizations

to resolve the issue of what is meant by job effectiveness and what behaviors arecausally related to it. It recognizes that subordinates are best placed to assess³leadership´ or ³people management´ skills. The technique is helpful in defendinglegal challenges of the outcome of appraisals, it is presented as important inmeeting the demands for employee empowerment and involvement, and finally, itis a useful tool in tapping employee opinions and attitudes.

BEHAVIORAL OBSERVATION SCALE

³How do you measure the performance of your administration staff, your

secretary, or another non-production staff?´

In production floor, we can use the number of product (in units) that processeddaily or in workhours easily, as the basis of employee performance. But, this isvery difficult to determine the quantitative type of work output completed by suchemployees (administration staff, secretary, research & development staff). We

can¶t use the number of letters that has been typed by the secretary as thereference, as the larger the number of the letters, the better the performance.

Then, a qualitative based performance appraisal (PA) method has been developedto handle this problem, called Behavioral Observation Scale (BOS). The rationaleis simple. Good behavior will produce good performance, bad behavior will be adistortion. This method is applicable for production-employees performance, too.

The key factor of measurement in this method is determining the behaviors in

workplace that related to the success or the failure, partially or generally, to the jobs.

There are some consideration in making an effective BOS:

1. The behaviors on the job must be ³Job evaluation´ based analysis.2. Critical Incident Technique (CIT) should be performed to minimize the bias

of performance measurement



3. BOS should be performed by better qualification of supervisor

The instrument of BOS is ordinal scale questionnaires (usually 1-5, or 1-7 scale).The question is related to the ³Frequency´ of the ³Good´ or ³BAD Bad behavior´. N ote that higher score is given to higher frequency good behavior. Lower score for

higher frequency of bad behavior!.

The TOTAL PERFORMANCE of an employee is THE SUM OF THE SCORE OFTHE QUESTIONNAIRE. Better employee (better performer) is someone reachhigher score.

The example of questionnaires below designed for a Hotel Receptionista. Right question, scale of measurement, and scale attribution for GOODBEHAVIOR

Say ³Thank you for your visits´ to the customer who leaves the hotel1 (never) 2 3 4 5 (always)

b. Right question and scale attribution, but wrong scale of measurement for BAD BEHAVIOR

Show the "sad face" to the customer

1 (never) 2 3 4 5 (always)

c. Right question, scale of measurement, and scale attribution for BADBEHAVIOR

Show the "sad face" to the customer 1 (always) 2 3 4 5 (never)

d. WRONG QUESTION, Wrong question, scale of measurement, and scaleattribution

Perform an english conversation with foreigner 1 (poor) 2 3 4 5 (very good)

Note:

1. 1. The difference between b and c questions is on the scale attribution(always for score-5 in b, an never for score-5 in c)

2. 2. A brief explanation must be provided for each scale in all questions. Thedetails should be made based on the PRELIMINARY OBSERVATION(Critical Incident Technique (CIT)is a recommended technique for this

purpose).



For example:Right question, scale of measurement, and scale attribution for BAD

BEHAVIOR Show the "sad face" to the customer 1 (always) 2 3 4 5 (never)Where:1 (always) : more than 80% of customer in a day

2 2 : 60%-79% of customer in a day3 3 : 40%- 59% of customer in a day4 4 : 10% -39% of customer in a day5 5 : 0%-9% of customer in a day

3. 3. For a better result of employee performance appraisal, BOS is suggestedto be combined with another quantitative appraisal method for PRODUCTION

JOB based employee.

BEHAVORALLY ANCHORED RATING SCALES (BARS)

In psychology research on behaviorism, Behaviorally Anchored Rating Scales

(BARS) are scales used to report performance. ' BARS are normally presented

vertically with scale points ranging from five to nine.' It is an appraisal method thataims to combine the benefits of narratives, critical incident incidents, andquantified ratings by anchoring a quantified scale with specific narrative examplesof good or poor performance.

BARS ,Behaviorally Anchored Rating scales is a method that combines elements

of the traditional rating scales and critical incidents methods. In order to constructBARS five steps are followed as mentioned below:

1. Examples of effective and ineffective behavior related to job are collectedfrom people with knowledge of job.

2. These behaviors are converted in to performance dimensions.3. A group of participants will be asked to reclassify the incidents. At this stage

the incidents for which there is not 75% agreement are discarded as beingtoo subjective.4. Then the above mentioned incidents are rated from one to nine on a scale.

5. Finally about six to seven incidents for each performance dimensions- allmeeting retranslation and standard deviation criteria will be used as BARS.

This is by far the best method used for a performance appraisal method.

hr.pfrmns aprazl methods

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