PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL • SCOPE: • Meaning & objectives, • Uses & benefits, • Process, • Methods, • errors of raters, • performance assessment & feedback.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL • Contents: Objectives, Uses, Benefits, Process, Planning, Requisites of Effective Appraisal System, Approaches, Components, Types, Concerns & Issues, Steps, Methods, MBO, 360 degrees, HR Balanced Score-card, Result oriented, Self-appraisal, Drawbacks & problems, TQM’s critique of Performance appraisal, How to improve, Steps in appraisal interview, assessment, Practice, Review, Feedback, Ethics of appraisal.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL • Performance appraisal (PA) is evaluation of performance of employee using goals, plans, etc and facts, data and individual history. This is done periodically by subordinate and supervisor. • The six primary criteria on which the value of performance may be assessed are: • quality, • quantity, • timeliness, • cost effectiveness, • need for supervision, and • interpersonal impact.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL • Results of appraisal are normally used to: 1. estimate effectiveness of employee. 2 identify strengths and weaknesses in knowledge & skills, 3. Determine if his responsibilities can be extended, 4. Identify future training & development needs. 5. Review progress towards goals & objectives. 6. Determine readiness for promotion. 7. Motivate & guide growth & development
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.1 Objectives of performance appraisal: • PA plans are designed to meet three needs of organization and employees: 1. Provide judgment for salary revision, promotion, transfer, demotion, termination. 2. Tell employee where he stands; suggest changes in behavior, attitudes, skills, job knowledge. 3. Basis for coaching and counseling.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.1 Objectives of performance appraisal: • Developmental objectives: • Performance Planning- develop role clarity, systematic planning & review. • Performance development- gain more insight, help employees in performi8ng higher level jobs through development. 3. Culture building 4. Performance monitoring & Control.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.1 Objectives of performance appraisal • Specific objectives of PA are: 1. Help employee overcome his weaknesses and improve his strength. 2. Generate feedback & guidance. 3. Realistic goal setting. 4. Provide inputs for rewards etc. 5. Create desirable culture and tradition.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.1 Objectives of performance appraisal Specific objectives of PA are (cont) 6. Identify employees for motivation, training & development. 7. Observe employee for coaching him. 8. Identify promotion potential. 9. Generate significant relevant, free and valid information about employees.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.2 Uses of PA • Common uses are: 1. Determining salary increases, bonus, promotions, demotions, terminations, transfer. 2. Determining training and development needs. 3. Promoting communication within different levels in organization. 4. Motivating employees and establishing data bank on appraisals. The data bank also shows how effective recruiting, selection and placement have been and helps manpower planning.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.3 Benefits of PA : • Benefits of PA, besides those mentioned above, are: • 1. Offers opportunity for discussion on important issues. • 2. Gives opportunity to focus on work activities and goals, identify and correct existing problems and encourage better future performance. • 3. It creates profound effect on motivation and satisfaction. • 4. Provides recognition to employees.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.4 PA Process: • Performance Appraisal Process involves: 1. Establish & communicate Performance Standards. 2 Measure actual performance. Quantitative performance by others. Subjective measures are ratings on personal standards of opinions.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.4 PA Process: • Four common sources of information used for measuring actual performance are: a) personal observation, b) statistical reports c) oral reports d) written reports. 3. Compare actual performance with standard and discuss the appraisal, in a way that subordinate accept appraisal in a constructive manner. 4. Taking corrective action.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.5 Planning appraisals • Before appraisal Establish key task areas, set goals, get facts and schedule first interview for appraisal. During appraisal: encourage two way communications, agree on goals, think how employee can be helped, record notes of interview. After appraisal: prepare formal record of interview. Monitor performance.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.6 Requisites of an effective appraisal system: 1. Reliability and validity of information and data which is legally adequate. 2. Job relatedness. 3. Standardisation of appraisal forms, procedures, uses of techniques, ratings etc. 4. Practical validity: visible to administer, possible to implement and economic. …cont.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.6 Requisites of an effective appraisal system: • ..Cont. • 5. Legal sanction as per law. • 6. Training to appraisers. • 7. Open communication. • 8. Access to result to employee to check and challenge them. • 9. Due process of redressal procedure.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.7 Approaches to PA: 1.Personality based systems : consists of list of personality traits significant in the job being appraised. These are initiative, dive, intelligence, ingenuity, creativity, loyalty and trustworthiness. 2. Generalised descriptive systems: these include general management qualities like organizing, planning, coordination, motivating, controlling, delegating, communicating etc. 3. Behavioral descriptive systems: define meaning of each term in respect of actual behaviors required.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.7 Approaches to PA: • 4 . Result-centered systems: these are directly job related. • PA requires job description in questionnaire form giving title, supervisor, subordinates, purpose, responsibility areas, size, targets, standards, other ways of measuring performance etc of the job.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.8 Components of PA Components flow from specific objectives of • appraisal. • Common components of PA are: 1. Key performance areas (KPA) & Key result areas (KRA). 2 Tasks, targets, objectives; attributes, qualities, traits. 3. Self appraisals. 4. Performance analysis. ….cont.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.8 Components of PA • Cont. 5. Performance ratings. 6. Performance review, discussion or counseling. 7. Identification of training/development needs. 8. Ratings/ assessment by appraiser. 9. Assessment/ review by reviewing authority. 10. Potential appraisal.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.9 Types of Appraisals 1. Close ended appraisal system: It is used in Govt. or Public enterprises. A confidential report is made for employee. Individual is informed only in case of adverse report. 2. Open ended appraisal system: Performance is discussed with employee and he is ranked on five/ten point scale. No effort is made to motivate average performer. Appraisal may turn out to be more subjective due to insufficient data.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.10 Concerns & Issues in appraisal: 1. Identifying job responsibilities and duties and performance dimensions, standard, and goals. 2. Prioritising & weighing performance dimensions & performance goals. 3. Determining appropriate methods for PA. 4. Developing suitable appraisal instruments& scoring devices. ….cont.
PERFORMANCE MANAGEMENT SYSTEMS CHAPTER III PERFORMANCE APPRAISAL 3.10 Concerns & Issues in appraisal: • Cont. 5. Establish procedures for fair appraisal. 6. Feedback to employees. 7. Relate performance to reward. 8. Design, monitor and audit process to ensure proper op0eration. 9. Opportunity to appeal for employee. 10. Training employees in appraisal system.
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