You are on page 1of 25

PERFORMANCE MANAGEMENT AND

APPRAISAL

BY
PROF. JYOTI VERMA
CIMP
PERFORMANCE APPRAISAL
It is an objective assessment of an individuals’ performance
against well defined benchmarks (such as job knowledge,
quality and quantity of output, leadership abilities,
dependability, co-operation, initiative, creativity etc. ).

It is linked to job analysis at one end and training and


development at the other.

Performance Performance
Job Analysis
Standards Appraisal
PMS
Performance Management System (PMS)- automated means
of continuously monitoring performance. It includes:
1. Setting work standards,

2. Assessment of employees’ actual performance relative to


those standards and
3. Providing feedback (motivate/remove perf. deficiencies)

4. Archiving performance data

5. Using appraisal data

6. Taking required actions

Apollo tyres, L&T, TCS, Wipro and Infosys, where PMS is formal
and structure and an important tool for transformation and
culture change.
PM VS PA
Elements Appraisal Performance Management

Primary Assessing performance Improve employee


Focus as well as potential performance and
development
Activities Designing appraisal Set of HR activities designed
Involved programmes and executed to assess and
improve performance
Leadership Evaluative Facilitative

Frequency Usually yearly Often, can be ongoing

Degree of High Low


formality
SETTING GOALS AND WORK STANDARDS

Specific- who have specific goals usually perform better


Measurable- always try to express goals in terms of number,
include target dates or deadlines.
Challenging but doable- not so difficult that they appear
impossible or unrealistic.
Encourage participation- involvement of all produce higher
performance.

 Set SMART goals: specific, measurable, attainable, relevant


and timely.
WHY APPRAISE PERFORMANCE
Main reasons:

1. For pay and promotional decisions


2. For developing a plan to remove perf. deficiencies and
reinforcing the right behaviours and actions
3. For career planning purposes in lights of employee’s
strengths and weaknesses.

Appraisals are more important than appraisal tools or forms.


DESIGNING APPRAISAL PROGRAMME
What Problems?
What RATING
Methods? ERRORS, affect
Traditional/ assessment
Modern results

When to How to solve?


Evaluate? Training-
Timing of accuracy of
evaluation ratings
Appraisal
Design
Whose
What to Performance?
evaluate? (Individual/T
productivity, eams)
Who are the
timeliness, raters?
quality, quantity,
need of Supervisors, Formal/
supervision etc. peers, self,
committees, Informal/
combination of Mixed
raters etc.
METHODS FOR APPRAISAL- TRADITIONAL
1) Graphic Rating Scale-
 Simplest most popular method

 Lists of traits

 Circling the score that best describes the performance of


subordinate for each trait

2) Alternation Ranking Method-


 Ranking employee from best to worst on a particular trait,
choosing highest, then lowest until all are ranked.

3) Paired Comparison Method-


 Ranking employees by making a chart of all possible pairs
of the employees for each trait and indicating which is the
better employee of the pair.
METHODS FOR APPRAISAL- TRADITIONAL
4) Forced Distribution Method-
 Similar to grading on a curve, predetermined percentages
of ratees are placed in various performance categories.
 All proportions in each category need not be symmetrical

 Best method to avoid appraisal problems

5) Critical Incident Method-


 Keeping a record of employees’ positive and negative
work-related behaviour and discussing it with the
employee at predetermined times.
 Eg. May 1st- Mr. X listened patiently to the customer’s
complaint, answered the women’s questions, he was
polite, prompt and interested in customer’s problem.
METHODS FOR APPRAISAL
Eg. Mr. X stayed eight minutes over on his break during the
busiest part of the day.
Advantage- It makes the supervisor thinks about the
subordinate’s appraisal all during the year.
Disadvantage- without numerical rating, not useful for
employee comparisons or salary decisions.

6) Narrative Forms/Essay Methods-


 Includes open ended questions

 Actual performance and how to improve


METHODS FOR APPRAISAL- MODERN
1) Behaviorally Anchored Rating Scale (BARS)-
 aims at combining the benefits of narrative critical
incidents and quantified ratings by anchoring a quantified
scale with specific narrative examples of good or poor
performance. (critical incident method + graphic rating
scale)

 5-10 perf. dimensions are identified and defined


 The dimensions are anchored with positive and negative
critical incidents
 Each ratee is then rated on the dimensions
METHODS FOR APPRAISAL- MODERN
Behaviorally Anchored Rating Scale (BARS)- Eg.
Most to least effective behaviour
 Nurse would be expected to put in extra time and care to
ensure patient’s comfort.
 Nurse would be expected to read nursing journals to
improve his/her skill sets.
 Nurse would take extra care to memorize patient names.
 Nurse would expected to feel good about being a nurse.
 Nurse would not be expected to give patients their
medications on time.
Scale- 1-10
METHODS FOR APPRAISAL- MODERN
2) Management by Objectives (MBO)-
 Many use it as primary appraisal methods while some use
it with graphic rating or other appraisal method.
 Managers and subordinates plan, organize, control,
communicate and debate to set goals. Eg.
Sales representative of medium firm- Contact six new clients
in West region of Bihar and sell to at least two of these new
clients within the next semiannual cycle.
Product Manager of large firm- Increase market share of
butter by at least 3.5% before next objective meeting (8
months from today) without increasing cost by more than
2%
3) 360 degree Appraisal- it is used for developmental
purposes rather than for pay increase
METHODS FOR APPRAISAL- MODERN
4) Computerized and Web-Based Performance Appraisal-
 Using appraisal soft-wares

 Keep computerized notes on subordinates during the year


and then to merge these with notes (characteristics and
performance essay) of employees on several performance
traits.
Eg. Infosys, Indian Oil Corporation Limited, Apollo Tyres- have
ePMS

5) Electronic Performance Monitoring- these systems use


computer network technology to allow managers access to
their employee’s computers and telephones.

Disadvantage- increases stress


ADVANTAGES AND DISADVANTAGES TO VARIOUS
PERFORMANCE APPRAISAL TOOLS
Individual Methods Comments

Rating Scales East to use, easy to complete, focus too much on


person instead of on performance
Forced Choice Easy to use, difficult to explain to those evaluated

Essay Good in providing specific feedback, difficult in


making comparisons
Critical Incidents Time consuming, must be disciplined to log in
incidents
Behavioural Scales Difficult to develop, great for providing specific
feedback
Ranking and paired Good for making comparisons, hard to use for
comparisons providing feedback
MBO Focus on results, does not engage in comparisons
among employees.
POTENTIAL APPRAISAL PROBLEMS

 Unclear Standards

 Halo Effect

 Central Tendency

 Leniency or Strictness

 Primacy or Recency

 Biases
REALISTIC APPRAISALS
Why employer’s are soft in employee appraisals:

1. Fear of having new hire and train them


2. The ratee’s unpleasant reaction
3. Company’s appraisal process that is not conducive to
candor.

Note: Poor performances should not be ignored

GE and Apple are famous for hard-hearted appraisal.


ROLE OF RATERS AND HR
Role of Raters
 Don’t give too high or too low or average scores to all
 Must be familiar with appraisal techniques
 Understand and avoid problems that can cripple
appraisals
 Should know how to conduct appraisals fairly

Role of HR
 Serves as policy making and advisory role
 Prepares detailed forms and procedures to operating
division heads
 Train supervisors to improve their appraisal skills, for
monitoring the appraisal system’s effectiveness, for
ensuring that it complies with EEO laws.
CONDUCTING EFFECTIVE APPRAISALS

 Know the problems- learn and understand the potential


appraisal problems

 Use the right appraisal tool- or combination of tools

 Maintain a diary

 Aim of appraisal should be developmental

 Be fair- not sharing information/providing feedback about


the performance is unfair and unjust as per law.
HOW TO CONDUCT THE APPRAISAL INTERVIEW

1. Talk in terms of objective work data

2. Don’t get personal

3. Encourage the person to talk

4. Get Agreement- how things could be improve and develop


an action plan with targets and dates.
HOW TO HANDLE A DEFENSIVE SUBORDINATE

1. Recognize that the defensive behaviour is normal.

2. Never attack a person’s defenses.

3. Postpone action

4. Supervisor should not try to be a psychologists.


PERFORMANCE MANAGEMENT
 PM is the continuous process of identifying, measuring, and
developing the performance of individuals and teams and
aligning their performance with the organizations’ goals.
 It includes, PA, archiving performance data and using that data.

Basic building blocks of performance management-


Direction sharing
Goal Alignment
Ongoing performance monitoring
Ongoing feedback
Coaching and developmental support
Rewards, recognition and compensation/dismissals or
terminations
DISCUSSION QUESTIONS
1. What is the purpose of the performance appraisal? Explain
the problems to be avoided in appraising performance?
2. Discuss the pros and cons of any four performance
appraisal tools?
3. How to conduct an appraisal interview? How would you
avoid a defensive subordinate during an appraisal
interview?
THANK YOU

You might also like