Answer PERFORMANCE APPRAISAL NEED FOR EVALUATING HUMAN RESOURCES: Recruitment in any organisation is continuing responsibility, as it is necessary for

new members to be brought in to the fold of an organisation. An organisations success depends on the effective utilization of manpower or human resources available in hand. It is very necessary to provide accurate, timely evaluation of the capabilities of an organisations current human resources with a forward look towards future needs. The principle question in this chapter is to see how can a management effectively recognise the present and potential capabilities of the human resources under its command. Most of the organisations seeks to monitor the job performance of their members through effective evaluatation systems. The most important issue in personnel Administration as on date is to have an important issue in personnel Administration as on date is to have an impartial and accurate appraisal of the members contribution. We can say that they performance appraisal concept is central to effective management. WHAT IS PERFORMANCE APPRAISAL SYSTEM ? It is the process by which organisation evaluates employees job performance. It is an essential function that supervisors and employees perform informally as an on goin process. It is necessary for every employee to know as to how he/she performs [as feedback] and those who manage should know how to evaluate the individual performance in order to take necessary step or action i.e. when performance is not unto the mark supervisor should take corrective action and when the performance is good the said employees should be rewarded by the supervisor. Informal and on going evaluation ate necessary but they are inefficient as it does not leave behind any documentation of either good/bad performance. But on the contrary with a systematic feedback system, the manager can identify good and bad performers. Performance appraisal can also be taken as one aspect of motivating applied in organisation context. Job performance is partially determined by the motivation to work hard. Vicher Vroom a motivational theorist suggested the Performance = ability x motivation An increased motivation should automatically result in better performance as a result of greater effort. Any change in performance should be identifiably and measurable. Performance appraisal is a systematic and objective way of evaluating the ability of an employee in performing the job. Performance appraisal is use in may aspects of organisational functioning. 1. To provide a more objective basis for promotion and transfer decisions. 2. Helps in wage and salary administration 3. To facilitate successive planning and general planning of staff requirements 4. To provide more effective utilization of manpower 5. To facilitate decision about incentives, merit, awards 6. To identify training and development needs and facilitate improvement of skills and knowledge 7. To determine employee potentialities 8. To counsel employees about their career plans 9. To provide a continuous record of an employees performance history 10. To develop standards of satisfactory performance Performance appraisal is a developmental tool with the following objectives: 1. To assess objectively the performance of the individual and his contribution to organisational goals 2. To provide feedback to the employee about the performance and his strengths and weaknesses without which improvement is not possible. 3. To help him improve his strengths and in overcoming his weaknesses

4. To help in assessment of development needs as well as motivating him to develop himself. PERFORMANCE APPRISAL BOILS DOWN TO a. As a system for control [old appraisal] b. As a system for motivation [new appraisal] How do we find whether the system is control-oriented or motivation-oriented? The best way is to ask whether the Appraisee sees the evaluation form and the analysis of his performance is only when it is unsatisfactory. If the answer is yes then it is control-oriented and it can exist only in old style bureaucratic set-up. Control bases systems are often perceived by employees to have strong punnnative connotations and as reinforcing superior power over their staff. A system which is motivation oriented is to ensure that performance in a present post gets better and identity employees who have the potential to do a more advanced job than what they are doing now. The degree of employee involvement in the system directly reflects the balance the system between motivation and control. KEY ELEMENTS OF PERFORMANCE APPRAISAL

HUMAN PERFORMANCE

PERFORMANCE APPRAISAL

EMPLOYEE FEEDBACK

PERFORMANCE MEASURES

PERFORMANCE RELATED CRITERIA

PERSONNEL DECISIONS

EMPLOYEE RECORDS

Performance measure should be job-related, otherwise it will lead to inaccurate and biased results. The following are some key issue in performance appraisal: A. FEEDBACK TO THE APPRAISEE People do not improve on their results without feedback on their performance. Performance. Performance appraisal systems help in the following ways: 1. They can be a source of direct feedback from the supervisor to the employee. 2. They can help the employee to monitor this own performance. For feedback to be effective, it must be 1. HONEST Suppose that a man is observing an archer whose arrows are barely hitting a target, and he keeps saying, wonderful. This way, not only is the failing to help the archer improve, he has also succeeded in confusing him. It is likewise impossible to expect employees to improve when manger or superiors dont give honest feedback, is often failing to differentiate between a substandard worker and a top performer by rating then the same. 2. SPECIFIC If feedback is too general, subordinates will not understand how to correct their behaviour. An employee should be told as clearly as possible why his performance was below expectations. 3. BEHAVIOUR-ORIENTED It is easier for an employee to accept feedback when it describes

specific behaviour expected on-the-job than when it points to faults in the employee as a person. For example, it is found that the behaviour of Receptionist \in the lobby is not up to par. Rather than telling her critically you have a bad attitude, better results will be obtained by saying, When someone to get a distinct impression that youre delighted to see them? Criticizing her attitude is likely to put her on the defensive. 4. CONSTRUCTIVE Managers need to identify not only what is wrong but how it can be corrected. In the above example of the Receptionist, a suggestion is being made about the inappropriate behavior at present, but is followed immediately by the alternative, desirable behaviour. The Receptionist now knows exactly how to improve. 5. BLANCED! Regular feedback of a positive nature is most effective in reinforcing what the employee does well. It is also far easier for an employee to receive suggestions for improvement without being defensive if his good performance has been recognized. A listing of his weaknesses to be overcome should be accompanied by a number of his strengths to be capitalized upon. B. PERFORMANCE CRITERIA Performance Criteria fall into basically three different kinds: 1. Personality characteristics 2. Performance characteristics 3. Attainment of objectives The traditional emphasis was on certain basic traits of the personality of the individual, such as drive, loyalty, dependability, etc., the emphasis shifted from simple, subjective judgments of personality traits towards more performance-based measures such as delegation, supervision and competence in work. Here, it was possible to pinpoint weaknesses to be rectified and strengths to be developed as well as to identify potentialities of the individuals with a view to his improvement. This would enable the individual to be more effective in his job and contribute to the development of the organisation. Later, it was relaised that in order to obtain higher standards of performance from the employee, appraisal should be done on the basis of the performance against pre-determined goals. Hence, a dimension was added, namely, Appraisal by objectives. It may be concluded as stated under OBJECTIVES that whatever the criteria used, they must be 1. directly related to success or failure in the job they must be relevant 2. they must be capable of objective evaluation 3. they must strike the employee as being fair and relevant If the above it ensured, data from performance appraisals is likely to be useful as it is consistent, making the appraisals easier, and employees will be content with a system that is fair and helpful. C. MANAGEMENT BY OBJECTIVES [MBO] AND PERFORMANCE APPRAISAL This is system or philosophy of management in which, once a year, the big boss decides upon the objective which the company as a whole will try to attain. He then considers any constraints or problems which may hinder the attainment of these objectives, and how he will be able to tell when the objectives are being met. Then he meets with the people who report to him, either singly or in a group, and assigns to then their won targets. Objectives are formally agreed upon after discussion. The subordinates, and this continues down the line. A regular series of review meetings are held at each level, for checking progress and making suitable adjustments where necessary. The appraisal system looks very much like MBO. The reviewing of past progress and setting of future targets reviewing of past progress and setting o future targets is common to both systems. But performance appraisal is not dependent upon the downward systematic flow of information from top management. Performance appraisal interviews can happen at any time, without waiting for the man at the top to begin the process. Also, objective in performance appraisal can be individuals, and personal, without may reference to the objectives of the appraising manager whereas in MBO, a manager must not set objectives until his own have been set. Appraisal by objectives thus has many parallels to MBO. As a technique of performance evauation, it is highly effective. The emphasis is on goal-setting [Setting of objectives] and acceptance of increased

responsibility for achievement of target by both the superior and the subordinate of targets by both the superior and the subordinate. An objective is a statement of what has of be done, the purpose for which it has to be done, with measures for the achievement of both of these [steward]. Individual objectives are set and these are into terms of they key result areas of the employees job. This is not the same as result areas of the employees job. This is not the same as writing a job description, as the latter is exhaustive, and may run into the hundreds. Employees may either be given the freedom to frame their won objectives in consultation with a superior, or may be given a list of objectives to choose from. It is a widely-held misconception that it is not possible to set objectives for certain job as something can ably be an objective if it is numerically measurable. As Stewart states, it is important to stress that an objective must be achievable, and one must be able to tell when one has achieved it, but that this judgment need not be numerical. At the end of the appraisal period, performance is measured against these clearly stated objectives and to what extent they have been achieved. The committment from each employee is likely to be greater since each person fells responsible for monitoring and controlling his own performance so that it is in line with the objectives he himself has chosen. Subjectivity in ratings by superiors is reduced to a great extent because performance is judged on objectives-based criteria. Discussion between the superior and subordinate is made more constructive by focusing on the facilitating and hindering factors, and it is usually the case that the employee himself initiates discussion on these. The two then agree on specific action to be taken as a result of the discussion. The entire cyclic process then begins again with agreement and setting of goals for the next year. Thus, it can be seen that the whole purpose of the appraisal shifts from being an onesided subjective judgment of performance to an interactive tool for individual growth and development. D. SELF-APPRAISAL The concept of self-appraisal goes hand-in-hand with that of open appraisal systems since selfappraisals allow for maximum participation form employee. Many companies have introduced selfappraisal for their managerial and other professional staff. The self-appraisal from may either be identical to the superiors copy, or it may be an individual preparation for counseling form. As organisations be come more complex and jobs more specialized, it is an increased well-known fact that individuals have to be responsible for their own performance and its improvement. Some peoples jobs are so specialised that a superior cannot really appraise it without failing to do justice to the less visible aspects of the persons work. The same is true for people who work unsupervised. Un such cases, on other person than the individual himself is in a position to monitor and evaluate his own performance. Self-appraisal is thus a tool for self-initiated development. During appraisal interviews between superior and subordinate, it has been found that self-appraisals help in getting the dialogue going. Often the employee initiatives discussion about what he feels are his own strengths and weaknesses affecting job performance. The superiors judgmental role is also reduced. Organisations with Matrix management have found self-appraisals to be very useful. Matrix management is a system where teams or groups of people are organized according to the project they are undertaking at that time. The reporting structure is flexible and changes from project to project a project Manager in one project may be a subordinate in another. The group shares responsibility for a given task and it may become very difficult to each persons contribution. Self-appraisal is a motivator. Although doubts are raised initially in introducing such a system about employees ability to judge their own performance fairly, most of these have been unjustified, In practice, it has been generally found that the appraisees rating of his own performance is slightly lower than the superiors a fact which encourages both sides. Self-appraisals often help a superior in getting a fuller picture of its subordinates job, as they sometimes throw up strengths and weaknesses of the employee which have been previously quire un-noticed. Then use of self-appraisal forms is bound to grow as more firms come to realise the motivational and developmental aspects of appraisal. E. TRAINING AND DEVELOPMENT It may be noticed that may appraisal forms contain a section for the appraiser to indicate training and

development needs of the appraisee. It is assumed that action is to be taken on the basis of this. Firms vary in the extent to which they manage a connection between what are written down as recommendations and space on the form being filled in as a pure formality to recommendations being passed on to a separate Training Department for them to frame suitable training courses, Some appraisers recommend training because they are genuinely interested in seeing improvement in the people under them. Others may use training courses as a punishment or as a reward. It is a generally accepted belief that training should never be used as a punishment. It is also advisable for superiors to distinguish between training for development and training for reward. Rather than superiors recommending specific training courses, it would be better for them to indicate training needs, and for someone else [for e.g. the personnel manager, Training officer] to training course limits the recommendations to courses known by him. Another reason for this is that training needs need not necessarily point to training courses. A need might be better met through on-the-job training or being assigned a special project or through job rotation. Appraisers are also generally not familiar with training vocabulary, and may recommend vaguely a management course where a training officer may be able to come up wit a much more specific and useful. It is not of course enough to put training recommendations on paper and then see that they are carried out. Feedback on how effective the training has been must be obtained by superior who recommended it in first place. This must be the done with discretion and the full awareness of the trainee. The whole purpose of training is defeated by the superior demanding a conduct report on the trainees behaviour at the end of the course. The point that has been missed is that a training course is just the right environment for an employee to experiment, make mistakes, and from them, thus stimulating the process of development. The best thing would and initiate be for the trainee himself to report back on his own progress and initiate a course of action for improvement back on the job. If feedback is not obtained by the superior, all the learning that has taken place during the training is likely to be forgotten as quickly as it was learnt. It has to be put to use in the real world. It is leanrt. It has to be on the form for the appraiser to indicate what action has been taken and the improvements seen. One more related issue is that of training appraisers to identify training needs. This has been found to be lacking in many organisations. A simple exercise that may be used is to provide groups of appraisers with short written conversations, and ask them to study the characters and craw up how this has been done and related matters. Such training proves very valuable in getting superiors to study their subordinates performance in detail. F. IDENTIFICATION OF POTENTIAL Another common feature of appraisal forms issue forms that section requiring the appraiser to make a judgment, usually on a single scale, about the employees potential. This is usually in terms of where he may be expected to be in a number of years. Experts strongly recommend against using the performance appraisal system as an exclusive measure of potential form the following reasons: 1. Track record alone is an insufficient and inaccurate predictor of future performance. For example, a good salesman promoted because of his excellent performance turns out to be totally incompetent sales manager: performance in a managerial one. This may be true generally also. Any good performer may find himself totally out of his depth in a new position. 2. The superior may not be in a position to evaluate the employees potential. This might especially be true where he may be asked to assess the individuals capability to reach a position higher than the one he himself holds. 3. Superiors often lack confidence in the assessment of potential they are making. This is all the more obvious if they are asked to reveal their judgments to their subordinates. Since extremely few companies provide appraisers with training in such evaluation they should not be asked to do son on appraisal forms. 4. Certain employees may find themselves doing the wrong jobs. This does not mean that they are to be condemned as having no potential on the basis of their present poor performance. Rather than using the performance appraisal reports, a number of other ways of assessing potential

can be used. For example, specific psychological tests may be used, or an employee may be assigned a special project to test his performance in a different capacity. Ideally made for potential assessment are formal assessment programmes. These consist of lists of tasks for the individuals to undergo. These tasks are meant to stimulate a potential job, and trained observers carry out the assessment. Tasks include in-basket exercises, group discussions, tests, etc. A general conclusion and recommendation would be to refrain from using performance appraisals as an exclusive measure of potential PERFORMANCE EVALUATION Requires 1. PERFORMANCE STANDARDS [i] RELATE TO THE DONE BY [Results to the job]

JOB ANALYSIS

2. PERFORMANCE MEASURES

RATER BIAS The problem with the subjective measure is an opportunity for BIAS. BIAS is the inaccurate distortion of a measurement. The most common rater bias are 1. The Halo Effect: The raters personal opinion of an employee sways the measurement of performance. If a superior personally likes or dislikes that opinion can distort the superiors estimate of the employee performance. 2. The Error of Central Tendency: Some raters do not want to rate their employees as effective or ineffective and hence they rate them as average. 3. The Leniency & Stricktness Bias: The leniency bias results when the rates tend to be easy in evaluating performance of employees. Such raters see all employees performance as good and rate it favourably. The strictness bias results when the rater is too harsh in the evaluation performance. He wants to make it appear he is a tough judge. Both to these errors occur during assessment of employees. 4. Personal Prejudice: Rater dislike for a group a or class or people may affect the ratings of the employees. Halo effect affects the evaluation of an individual and prejudice affects ones judgement of an entire group. Eg. Raters give low ratings to women who hold traditionally male jobs. 5. The Decency Effect: Sometimes rating are affected strongly by the employees most recent action. Recent action either good or bad are more likely to be remembered by the rater.

Performance Appraisal is a critical activity of personnel Management. It is a means to provide an accurate picture of past and employee performance