DEFINITION OF PMS
Performance is a process of creating a work environment or setting in which people are enabled to perform to the best of their abilities. Performance management is nothing but achieving progress and success towards goal achievement Performance Appraisal means evaluating/appraising the performance of an employee
Specific Measurable Attainable Relevant Time sensitive
• Your goals • The employee’s goals • The department’s goals • The organization’s goals
Why Do Performance Management?/Objectives
To communicate goals, mission, values,
purposes To improve working relationships
To improve management
To identify and communicate strengths and
areas for improvement To provide feedback
To develop To monitor
Importance of PMS
An effective Performance Management System::
Creates conditions that provide lean initiatives Recognizes individual contribution Recognizes team effort Rewards innovation Rewards attainment of new skills
Components of PMS
Employee development Employee Compensation Employee Performance Business Performance Objectives for
individuals and teams
Process of Appraisal
Establish Performance Standards Communicate the standards Measure actual performance Compare actual performance with standards
and discuss the appraisal
Take corrective action
Methods of Appraisal
Rating by superiors consisting of traits and behavioural methods:
Ranking Method Graphic Rating Scale method Paired Comparison Method Forced Choice List Method Critical Incidence Method Forced Distribution Method
3/18/13 Feedback on appraisal information
Under this method the employees are ranked from best to worst or some characteristics. The rater first finds the employee with the highest performance and the employees with the lowest performance in that particular job category and rates the former as the best and the latter as the poorest. This will be repeated until he rates all the employees in the group.
Graphic Rating Scales
Graphic rating scales compare individual performance to an absolute standard. In this method, judgments about performance are recorded on a scale. This method is also known as linear rating scale or simple rating scale. Under this method the appraisers are supplied with printed forms, one for each employee. These forms contain a number of objectives, behaviour and trait-based qualities and characters to be rated like quality and volume of work, job knowledge, dependability, 3/18/13 initiative, attitude etc., according to the
Paired Comparison Method
Under this method, the appraiser ranks the employees by comparing one employee with all other employees in the group, one at a time. This method could be employed when the number of employees is less. Another limitation of this method is employees are simply compared to each other on total performance rather than specific job criteria.
Checklist is a simple rating technique in which the supervisor is given a list of statements or words and asked to check statements representing the characteristics and performance of each employee. There are three types of checklist methods. They are:
1. Simple Checklist Method 2. Weighted Checklist Method 3. Forced Choice Method
Checklist Methods contd.,
Simple Checklist Method: This method contains a large number of statements concerning an employee behaviour in the form of YES/No answers type. Weighted Checklist Method: The weighted checklist involves weighting different items in the checklist, having a series of statements about an individual, to indicate that some are more important than others.
Checklist Methods contd.,
Forced Choice Method: Under this method, a large number of statements in groups are prepared. Each group consists of four descriptive statements concerning employee behaviour. Two statements are most descriptive (favourable) and two are least descriptive (unfavourable) of each tetrad.
Critical Incidents Method
Under this method employees are rated continuously. The supervisor continuously records the critical incidents of the employee performance or behaviour relating to all characteristics. This method has the advantage of being objective because the rater considers the records of performance rather than the subjective points of opinion.
Forced Distribution Method
This method is developed to prevent the rater from rating too high or too low. Under this method, the rater after assigning the points to the performance of each of employee has to distribute his ratings in a pattern to conform to normal frequency distribution.
Rating by self and peers
This method is one way an alternative source of appraisal under this method the employee himself evaluates his performance – Self This can also be done one’s fellow employeespeers Various other alterative sources of appraisal:
Team Members Vendors Superiors Subordinates
This system collects performance information from multiple parties, including one’s subordinates, peers, supervisors and customers. The major problem rests with this system is that it is highly sensitive. It may fail to deliver results if it is not designed and implemented properly.
BALANCED SCORE CARD
This method is developed by Robert S.Kaplan and David P.Norton in 1990s. Balanced Score Card model enables an organization in clarifying its vision, mission and strategy leading to action and thus provides feedback on both the internal process and external outcomes by focusing on four key elements:
1. Financial 2. Customer 3. Internal Business Processes
Behaviourally Anchored Rating Scales(BARS)
This method combines elements of the traditional rating scales and critical incidents methods. This method employs individuals who are familiar with a particular job to identify its major components. They then rank and validate specific behaviours for each of the components.
Constructing BARS involves certain steps:
Collect Critical Incidents Identify Performance Dimensions Reclassification of Incidents Assigning Scale Values to the Incidents Producing the Final Instrument
Which method to follow?
The choice of the method depends on the purpose of the appraisal because each method has its own advantages and disadvantages. The research supports the more sophisticated and more time-consuming methods as they offer useful information. The effectiveness of the system depends on its adaptability i.e., annual or periodic. Appraisal should be meant for each level of management
Limitations of Appraisal systems
Manager lacks information concerning
Standards not clear No seriousness No honesty on the part of appraiser Lacking appraising skills Using unclear language in the appraisal