concept of Performance Appraisal in Human Resource Management

Performance Appraisal

1. Concept of Performance Appraisal A performance appraisal is a systematic and periodic process of measuring an individual’s work performance against the established requirements of the job. It’s a subjective evaluation of the employee’s strengths and weaknesses, relative worth to the organization, and future development potential. Performance appraisals are also called performance evaluations, performance reviews, development discussions, or employee appraisals.

2. Uses of performance appraisal Reward management : Performance appraisal can be used as a basis for reward allocation. Decisions as to who gets salary increased, promotion and rewards are determined by performance evaluation. Training and development decision : Performance appraisal can be used for identifying areas where development effort are needed. In an organization, management needs to find out those individuals, who have specific knowledge or skill deficiencies. This helps the management to take decision on training and development So to overcome such problems like skill deficiencies, performance appraisal can be used as a major tool.

3. Continue…... Validation of selection test : Higher score in selection test means higher performer. This can only be valid when and individual performance is evaluated and meets the expectation of job. To evaluate and individual performance : Performance of an individual play vital role in the achievement of an organizational goal effectively and Whether workers are putting their full effort on work or not can only be ascertained by certain evaluation. So performance appraisal helps in finding out the ability and performance relation and takes corrective action if necessary.

4. Methods of Performance Appraisal Ranking method: Ranking method is one of the simplest performance evaluation methods. In this method, employees are ranked from best to worst in a group. The simplicity of this method is overshadowed by the negative impact of assigning a ‘worst’ and a ‘best’ rating to an employee. Such discriminations lead to negativity within a group and have a negative impact on performance.   Alternative ranking method:  Under this method, employees are rank from best to worst on a particular trait, choosing highest ,then lowest, until all are ranked .This method takes considerable time for appraising and is based on objective.

5. Continue….. Paired comparison method:  This method rank employees by making a chart of all possible pairs of the employees for each trait and indicating which the better employee of the pair is. This method allows for the comparison of each employee with every other The paired comparison method is calculated by taking the total of n (n-1)/2 comparisons. This method compares each employee with another one .However it is very difficult when larger number of employees need to be compared.

6. Continue….. Forced choice method:  The forced choice appraisal is a special type of checklist, but he rater has to choose between two or more statement all of which may be favorable or The appraiser’s job is to identify which statement is most descriptive of the individual being evaluated. Once the evaluation is done, the HR department score the answer based on the key (validate answers). This method is bias free. However, it is costly and may be disliked by the appraiser because of forced selection of option. Critical incident:  Under this method, the appraiser write down a little story (note)that describe the key behavior of an individual, that make the difference between doing a job effectively or doing it This method looks at the behavior and help HRM to identify the desirable and undesirable behaviors of an individual and take corrective action if necessary. However, it is not used for comparison.

7. Continue….. Behaviorally Anchored Rating Scale (BARS):  It combines the benefits of narrative, critical incident and quantified (graphic rating type) scales by anchoring a rating scale with specific behavioral examples of good or poor performance. Developing BARS typically requires five steps: Generate critical incidents:  Person who know the job (jobholders and or supervisors) describe specific illustration (critical incidents) of effective and ineffective performance. Develop performance dimension:  All these critical incidents are grouped on 5 to 10 different job dimension (e.g. Technical ability, knowledge and judgment, human relation skills etc). Reallocate incidents:  Supervisor reallocates the Each relevant incident is assigned to specific performance dimension. Scale the incident:  All the incidents are scales on 7 to 9 points scales. Each employee in the particular job is rated on each dimension or appropriate scale of the BARS.

8. Steps in performance appraisal process Establish performance standards: Broadly speaking, the process of evaluation begins with the establishment of ‘performance standards'. At the time of designing a job and formulating a job description, performance standards are usually developed for the position. The standards should be clear enough to be understood. Communicate performance expectations to employees: The next steps is to communicate these standards to the employees. By doing so employees would not find it difficult to guess what is expected of them. To make communication effective , ‘feedback’ is necessary from the subordinate to the manager. Measure actual performance: The third step is the ‘measure of actual performance’. To determine what actual performance is ,it is necessary to acquire information about it.Four sources of information is frequently used to measure actual performance: personal observation, statistical report, oral reports and written report.

9. Continue….. Compare actual performance with standards: The forth steps is the comparison of actual performance with standards. This step generally reveals three different situation (a)Above average or excellent performance (b)average or expected performance (c)below average or poor performance standards. First two are desirable but the last one isn’t desirable on the organization. Discuss the appraisal with the employee: At the next stage, the result of appraisal are discussed periodically with the employees. In this activity good points,weakpoints and difficulties are indicated.Again,it should be discussed with the jobholder, so that performance is improved. Initiate correction action: The final step is the initation of correction action when necessary.Immediation correction action can be of two types. One is immediate and deals predominantly(mainly)with symptoms. The other is basic and deals into causes. Immediate correction action is often described as putting out fires.

10. Selection of performance evaluation criteria There are basically six basic criteria for assessing employee performance: Quality: This is the naturally the first and most important criteria of performance appraisal throughout the world. The performance outcome of employee is judged/evaluated based on quality of goods and services produced by him/her. Quality is the most important criteria because of increasing competition in the market. It also indicates the level of motivaton,ability and dedication of employees towards organizations goals. Quantity: It is the second most important criteria which is used to evaluate the employee performance. The quantity criteria is generally expressed in terms of (a) amount produced (b) monetary value (c) numbers of units (d) number of completed activity cycles. Timeliness: It is the degree to which an activity is completed or a result is produced. It should be the earliest time desirable from. Timeliness can be judged from the standpoints of both coordinating with he outputs of others and maximizing the time available for other activities.

11. Continue….. Cost effectiveness: It is the fourth most important criteria generally used to evaluation employee performance. Its important is increasing day-by-day due to increasing competition in the market place. This criteria evaluates the level of efficiency of employees. It is related with the ratio between inputs and outputs. Needs for supervision: It is the fifth most important criteria generally used to evaluate the performance of employee. It evaluates the degree to which a job performer can carry out job function independently. Interpersonal impact: It is the last and important criteria under which the candidates job performance is evaluated. It evaluates the degree to which a job performer promoters feeling of self-esteem/self respect. It also tries to evaluate goodwill and co-operations among the co-workers and subordinates.