Performance Appraisals

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Performance Appraisal
The

systematic, periodic and an impartial rating of an employees excellence in the matters pertaining to:: His present job His potential for a better job

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Objectives Of Performance appraisal

Estimate

gap between the actual and the desired performance. Exercising organizational control. Feedback to the employees regarding their past performance.

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Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.
To judge the effectiveness of the other HR functions such as recruitment, selection,

training and development.

To reduce the grievances of the employees.

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::Appraisals Assist::
Employee

Training Needs Assessment Organizational Performance Succession Planning TQM Change organizational Culture

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Process
Establishing Standards

Communicating Standards and expectations

Measuring the actual performance

Comparing with standards

Providing feedback

Corrective Actions Purvish Shah - NAVIGATOR

Pre-requisites for Performance Appraisal

Documentation

--continuous noting and documenting the performance Standards / Goals --should be clear, easy to understand, achievable, motivating, time bound and measurable Practical and simple format - The appraisal format should be simple, clear, fair and objective.
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technique An appropriate evaluation technique should be selected Communication Expected results should be communicated to the employees as well as the evaluators Feedback Should be developmental rather than judgmental Personal Bias --evaluators should be trained to carry out appraisals without personal bias
Evaluation
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Purpose Of Performance Appraisal

Others Mobility Deciding future goals Gaps T&D needs Payroll 0% 20% 40% 60% 80% 100%

(A Survey of 100 Companies done by AC Nelsons)

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Payroll and compensation decisions 80% Training and development needs 71%

Identifying the gaps in desired and actual performance 76%

Deciding future goals and course of action 42% Promotions, demotions and transfers 49% Other purposes 6% (job analysis and providing superior support, assistance and counseling)

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Performance Appraisals as Career Development Get paid according to what you contribute

Performance appraisal as Career Development leads to the recognition of the work done by the employees It is a link between the organizational goals and the employees personal career goals. Potential appraisal, a part of Performance appraisal, helps to identify the hidden talents and potential of the individuals Purvish Shah - NAVIGATOR

A positive feedback motivates employees to identify individual career developmental plans Based on the evaluation, employees can develop ::
Their career goals Achieve new levels of competencies Chart their career progression

Performance appraisal encourages employees to reinforce their strengths and overcome their weaknesses.
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Approaches to Performance Appraisals

Traditional approach Traditionally, P.A. has been used as just a method for determining and justifying the salaries of the employees Than it began to be used a tool for determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past performance of the employees

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Traditional Approach

A past oriented approach Focused only on the past performance of the employees Did not consider the developmental aspects of the employee performance

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Modern approach

Performance appraisal processes are more formal and structured. Apart from the routine HR Functions, Modern approach to performance appraisals includes a feedback process This improves the communication between superiorsubordinates The modern approach to is a future oriented approach and is developmental in nature. This recognizes employees as individuals and focuses on their development.

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Balanced Scorecard
The

balanced scorecard provides a list of measures that balance the organizations internal and process measures with results, achievements and financial measures. The two basic features of the balanced scorecard are:
A balanced set of measures based on. the four perspectives of balanced scorecard Linking the measures to Employee Performance
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The 4 key areas::

The financial measures

Profits, increase in the market share, return on investments and other economic measures as a result of the actions taken. customer satisfaction, the customers perspective about the organisation, customer loyalty, acquiring new customers. Number of customer complaints, The time taken to deliver the products and services, improvement in quality etc.

The customers measures

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The internal business measures These are the measures related to the organizations internal processes which help to achieve the customer satisfaction. Infrastructure, The long term and short term goals and objectives, Organizational processes and procedures, Systems and the human resources. The innovation and learning perspective organization's ability to learn, Innovations and improvements Key competencies Value added and the revenue per employee.
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Methods of Performance appraisals

Traditional

Methods

ESSAY APPRAISAL METHOD STRAIGHT RANKING METHOD PAIRED COMPARISON CRITICAL INCIDENTS METHODS FIELD REVIEW CHECKLIST METHOD GRAPHIC RATING SCALE FORCED DISTRIBUTION
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 Modern

Methods

Assessment Center Human Resource Accounting Behaviorally Anchored Rating Scales MBO 360 Degree Appraisals

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Appraisal as Employee Motivation Mechanism

Inaccurate

Performance Review + Increased Salary = De-motivated Employee Accurate Review + No Change in Salary = De-motivated Employee Accurate Review + Increased Salary = Highly Motivated Employee

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Arguments Against Performance Appraisal

Disparities between the theory and its application PA is a bitter process for most of the employees Creates emotional pressures and stress for the employees PA is often looked upon as a tool to control the employees by the superiors which dampen the intrinsic motivation of the employees. PA process increases the dependency of the employees on their superiors

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Performance appraisal
. process encourages accountability, approvals and discourages the spirit of creativity and initiative by employees and also Demotivates them are conducted by managers who are often not trained to be appraisers. .This obstructs the genuine feedback, leading to incorrect and unreliable data regarding the performance of the employees Example:: BPOs, Government Organizations Etc
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MANAGING WITHOUT PERFORMANCE APPRAISALS

The "appraisals and review meetings", continuous accountability and check can cause emotional stress for the employees. Therefore, it is recommended to create such a work culture where the employees are made responsible for their own performance and development the managers / superiors suggestions, inputs are encouraged and incorporated in the actions.

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Changing pay practices--Periodic cost of living increases, rewards on some accomplishments, tem bonuses, profit and gain sharing Motivating peopleChallenging work, Reminding them about their personal goals Creating an organization with a culture that
Encourages creativity, Fosters innovative efforts and productivity, Teamwork, Reformulating strategic plans and assumptions but can be effectively put into place without the need of performance appraisals
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Performance Appraisal For Employees at Different Levels

For top level management Degree of organizational growth and expansion Extent of achievement of organizational goals Contribution towards the society Profitability and return on capital employed

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For middle level managers Performance of the departments or teams Co-ordination with other departments Optimal use of resources Costs Vs. revenues for a given period of time The communication with superiors and subordinates

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For front line supervisors Quantity of actual output against the targets Quality of output against the targets Number of accidents in a given period Rate of employee absenteeism

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Global Trends In Performance Appraisal Program

The focus of the performance appraisals is turning towards career development Trend towards a 360-degree feedback system The problems in the performance appraisal processes are being anticipated and efforts are being made to overcome them. Rank and Yank Strategy or Up or Out Strategy Team Performance Appraisal

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Points to be Remembered

What is the purpose of performance appraisals? How should the self appraisal be used? How should the ratings be given if there has been a change of supervisor or manager during the period of the appraisal? How can input/feedback be collected for the appraisal process? What if the employee refuses to agree or/and accept the review? How do you deal with an average or a non-performer?

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:::Don't let employees come into the Performance Appraisal blindly or leave blindly, without a sense of direction or accomplishment!:::

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