Performance Appraisal BY modern techniques -----BY RAMYA

Definitions
According to Newstrom, It is the process of evaluating

the performance of employees, sharing that information with them and searching for ways to improve their performance.

Meaning
Performance appraisal is the step where the management finds out how effective it has been at

hiring and placing employees .

A Performance appraisal is a process of

evaluating an employees performance of a job in terms of its requirements.

Various Methods Used

Performance Appraisal
Traditional Methods *Straight Ranking Method

Modern Methods *MBO.

*Essay Appraisal Method *Paired Comparison Method *Critical Incident Method *Field Review *Checklist Method *Graphic Rating Scale *Forced Distribution

*360 Method. *Assessment Centres. *Behaviourally Anchored. Rating Scale. *Human Resource Accounting.

MODERN METHODS :

BEHAVIORALLY ANCHORED RATING SCALES: Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which combines the graphic rating scale and critical incidents method.

Performance

Behavioral Anchored Rating Scales

Points Behavior

Extremely good

Can expect trainee to make valuable suggestions for increased sales and to have positive relationships with customers all over the country. Can expect to initiate creative ideas for improved sales. Can expect to keep in touch with the customers throughout the year. Can manage, with difficulty, to deliver the goods in time. Can expect to unload the trucks when asked by the supervisor.

Good Above average Average Below average

6 5 4 3

Poor

Can expect to inform only a part of the customers.

Can expect to take extended coffee breaks & roam around purposelessly.

Extremely poor 1

MERITS AND DEMERITS

Merits High participation and hence acceptance of the technique by supervisors and subordinates Differentiates among behavior , performance and results Technique is valid and reliable as it identifies observable and measurable behaviors of specific jobs. Demerits Identification of critical behaviors that are activity directed rather than result directed. Construction of BARS is expensive and time consuming. Research does not support the high gain claims of BARS.

360 DEGREE PERFORMANCE APPRAISAL: 360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees performance comes from all the sources that come in contact with the employee on his job.

What the process involves

Obtaining feedback from the manager's key contacts. These would normally include: o The manager him/herself o Subordinates (employees who work for the manager) o Peers (fellow managers) o Managers (senior management) o Customers o Suppliers

(SELF APPRAISAL)

The Process

Supervisor Appraisal
Performance appraisal done by an employees manager and often reviewed by a manager one level higher.

Self-Appraisal

Performance appraisal done by the employee being evaluated, generally on an appraisal form completed by the employee prior to the performance review.

Subordinate Appraisal

Performance appraisal of a superior by an employee, which is more appropriate for developmental than for administrative purposes.

Peer Appraisal

Performance appraisal done by ones fellow employees, generally on forms that are complied into a single profile for use in the performance interview conducted by the employees manager.

Team Appraisal

Performance appraisal, based on TQM concepts, that recognizes team accomplishment rather than individual performance.

Advantages ..
Method of collecting information from as many sources in an employees environment. Honest assessment as viewed by a variety of constituents. Confidential input from many people of how an employee fares in his job. Helps employees in seeing themselves as others see them. It provides information which neither employee nor his/her superior may be aware.

Advantages
Confidentiality an important aspect. Employees find this method to be fair. Gives an indication of performance enhancing or distracting work situation. Allows to improve the system creating greater harmony and overall improvement. Help employees identify strength and address skill gaps. Lends to continuous learning , growing self confidence and improved productivity.

Advantages to the Supervisor

The system is helpful to the supervisor as :

Accurate assessment. Eliminate accusations of favoritism. Provides greater Objectivity.

Why 360 degree Appraisal Programs Fail? .

360 performance rating system is not a validated or corroborated technique for performance Appraisal With the increase in the number of raters from one to five (commonly), it become difficult to separate, calculate and eliminate personal biasness and differences. It is often time consuming and difficult to analyze the information gathered.

The results can be manipulated by the employees towards their desired ratings with the help of the raters.

.Why 360 degree Appraisal Programs Fail?

The 360 degree appraisal mechanism can have a adversely effect on the motivation and the performance of the employees. 360 degree feedback as a process requires commitment of top management and the HR, resources(time, financial resources etc), planned implementation and follow up. 360 degree feedback can be adversely affected by the customers perception of the organization and their incomplete knowledge about the process and the clarity of the process. Often, the process suffers because of the lack of knowledge on the part of the participants or the raters.

What is MBO?
According to Dr.George S. Odiorne Management by Objectives is a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individuals major areas of responsibility in terms of the results expected of him and use these measures as guides for operating the unit and assessing the contribution of each of its members.

Main Principle of MBO

The principle behind Management by Objectives (MBO) is to make sure that everybody within the organization has a clear understanding of the aims, or objectives, of that organization, as well as awareness of their own roles and responsibilities in achieving those aims. The complete MBO system is to get managers and empowered employees acting to implement and achieve their plans, which automatically achieve those of the organization.

Where to Use MBO

The MBO style is appropriate for knowledge-based enterprises when your staff is competent. It is appropriate in situations where you wish to build employees' management and self-leadership skills and tap their creativity, tacit knowledge and initiative. Management by Objectives (MBO) is also used by chief executives of multinational corporations (MNCs) for their country managers abroad.

The Five-Step MBO Process

MBO Strategy : Three Basic Parts

All individuals within an organization are assigned a special set of objectives that they try to reach during a normal operating period. These objectives are mutually set and agreed upon by individuals and their managers. Performance reviews are conducted periodically to determine how close individuals are to attaining their objectives. Rewards are given to individuals on the basis of how close they come to reaching their goals.

Six MBO Stages

Define corporate objectives at board level Analyze management tasks and devise formal job specifications, which allocate responsibilities and decisions to individual managers Set performance standards Agree and set specific objectives Align individual targets with corporate objectives Establish a management information system to monitor achievements against objectives

8 Key Result Areas Where Managers

Must Pursue Clear Objectives
Marketing Innovation Human organization Financial resources Physical resources Productivity Social responsibility Profit requirements

MBO Advantages & Disadvantages

Advantages MBO programs continually emphasize what should be done in an organization to achieve organizational goals. MBO process secures employee commitment to attaining organizational goals. Disadvantages The development of objectives can be time consuming, leaving both managers and employees less time in which to do their actual work. The elaborate written goals, careful communication of goals, and detailed performance evaluation required in an MBO program increase the volume of paperwork in an organization.

Examples of 360 degree performance appraisal method

These companies are using 360 Degree Performance Appraisal Method Wipro Infosys Reliance Industries Maruti Udyog HCL Technologies Wyeth Consumer Health (WCH)