Performance Appraisal & Performance Management 2

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Performance Appraisal & Performance Management
• Performance Management is the continuous process of identifying, measuring & developing the performance of individuals & teams and aligning their performance with the organizational goals.

Performance Appraisal VS Performance Management

In comparing performance management and performance appraisal, ‘the distinction is the contrast between a year-end event – the completion of the appraisal form- and a process that starts the year with performance planning and is integral to the way people are managed throughout the year.

Three issues that distinguish Performance Appraisal.

Performance

Management

from

First, Performance Management never means just meeting with a subordinate once or twice a year to ‘review performance’. It means continuous, daily or weekly interactions and feedback to ensure continuous improvement. Second, Performance Management is goal-directed. The continuing performance reviews always involve comparing the employee’s or team’s performance against goals that specifically stem from and link to the company’s strategic goals.

Third, Performance Management means continuously reevaluating and (if needed) modifying how the employee & team get their work done. Depending on the issue, this may mean additional training, changing work procedures or instituting new incentive plans for instance.

Problems Some fail because subordinate does not know ahead of time exactly what you expect in terms of good performance. Others fail because of problems with the forms or procedures used to actually appraise the performance; a lenient supervisor might rate as ‘high’ for instance, subordinates who are actually substandard. Other problems, like arguing & poor communication, undermine the interview-feedback session.

Appraisal Methods
Managers usually conduct the appraisal using predetermined and formal method like one or more of those described next. It is ‘predetermined’ in so far as most firms do (or should) decide ahead of time what tools and processes they are going to use. The process would include specific decisions like what time of year appraisal done, and who will review the completed appraisals. Some firms create their own appraisal forms and tools; others- especially smaller ones- use off–theshelf methods from HR suppliers.

Appraisal Methods Graphic Rating Scale Method
The graphic rating scale is the simplest and most popular technique for appraising performance. A graphic rating scale lists traits (such as quality and reliability) and a range of performance values (from unsatisfactory to understanding) for each trait. You rate each subordinate by circling or checking the score that best describe his or her performance for each trait. You then total the assigned values for the traits. Instead of appraising generic factors (such as quality and quantity) that apply to all or most jobs, you may focus on the jobs actual duties. For example, an appraisal form for an administrative secretary. The form uses the jobs five main sets of duties, one of which is ‘reception’. HR took the five duties from the job description and priorities them. It then assigned an importance rating to each duty, shown as a percentage at the top of each of the five duties (reception is 30%). There are also space in the form for comments.

Graphic Rating Scale Method
Graphic Rating Scale with Space for Comments: Name Employ Payroll Number Title Department

Reasons for Review: Annual / Promotion / Merit / End Probation Period / Other Date of Employee Began Present Position ………………………….. Date of Last Appraisal ……………………

Scheduled Appraisal Date …………….
Instruction: carefully evaluate employees work performance in relation to current job requirement. Check rating box to indicate the employees performance. Indicate N/A if not applicable.

Example:
General Factors
1. Quality    

Rating Scale
O V G I 100-90 90-80 80-70 Below 70

Comments

2. Productivity

   

O V G I

100-90 90-80 80-70 Below 70

3. Job Knowledge

   
   

O V G I
O V G I

100-90 90-80 80-70 Below 70
100-90 90-80 80-70 Below 70

4. Reliability

Alternative Ranking Method
Ranking employees from best to worst on a trait or traits is another option. Since it is usually easier to distinguish between the worst and the best employees, an alternative ranking method is most popular. First, list all subordinates to be rated, and then cross out the names of any not known well enough to rank. Then on a form like that indicate the employee who is the highest on the characteristic being measured and also the one who is the lowest. Then choose the next highest and the next lowest, alternating between highest and lowest until all employees have been ranked.

Paired Comparison Method
The Paired Comparison Method helps make the ranking method more precise. For every unit trait (quality of work, quantity of work & so on) you pair and compare every subordinate with every other subordinate. By this way supervisor can understand who is the better employee in the pair.

Paired Comparison Method
For the Trait ‘Quality of Work’ Employee Rated
As Compared to A Art B MARIA C Chuck D Diana E Jose

A Art B Maria C Chuck D Diana E Jose

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+ + +

+ + + + +

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Management by Objectives
Management by Objectives requires the manager to set specific measurable goals with each objectives and then periodically discuss the latter’s progress with

subordinates by jointly setting goals and periodically providing feedback. However
the term MBO generally refers to a comprehensive, organization wide goal settings and appraisal program consisting of six steps.

1.
2. 3. 4. 5. 6.

Set the organizational goals
Set the departmental goals Discuss departmental goals Define expected results Performance review Provide feedback

Management by Objectives
1. Set the organizational goals Establish an organizational wide plan for next year and set company goals. 2. Set departmental goals: next, departmental heads take these company goals (like boost profit by 20%) and with their superiors, jointly set goals for their departments. Discuss departmental goals: departmental heads discuss the department’s goals with all subordinates, often at a department wide meeting. They ask employees to set their own preliminary individual goals; in other words, how can each employee contribute to the departments goals? Define expected results (set individual goals): department heads and their subordinates set short term individual performance targets. Performance review: department heads and employees discuss and evaluate the alters progress.

3.

4. 5.

MBO
MBO is time consuming. Setting objectives, measuring progress, and giving feedback can take several hours per employee per year, over and above the time you already spend doing each person’s appraisal. Setting objectives with the subordinate sometimes turn into a tug-of war, with you pushing for higher quotas and the subordinate pushing for lower ones. Knowing the job and the person’s ability is important. To motivate performance, the objectives must be fair and attainable. The more you know about the job and the person’s ability, the more confident you can be about the standards you set.

Problems in Performance Appraisal
Many performance appraisal methods have been severely criticized. The rating scale methods seem to have received the greatest attention. In all fairness, many of the problems commonly mentioned are not inherent in the method but rather reflect improper usage. For example, raters may be inadequately trained, or the appraisal device actually used may not be job related.

Problems in Performance Appraisal
• Lack of objectivity • A potential weakness of traditional performance appraisal methods is that they lack objectivity. In the rating scales, for example, commonly used factors, such as attitudes, loyalty, and personality are difficult to measure. In addition, these factors may have little to do with an employees job performance. • Some subjectivity will always exist in appraisal methods. However, the use of job related factors does increase objectivity. Employee appraisal based primarily on personal characteristics may place the evaluator –and the company – in untenable positions with the employee and EEO guidelines. The firm would be hard pressed to show that these factors are job related.

Problems in Performance Appraisal
• Halo Error • Halo error occurs when the evaluator perceives one factor as having paramount important and give a good or bad overall rating to an employee based on this one factor. For example: David Edwards, accounting supervisor, placed a high value on neatness, which was a factor used in the company’s performance appraisal system. As David was evaluating the performance of his senior accounting clerk, Carl Curtis, he noted that Carl was not a very neat individual and gave him a low ranking on this factor. David also permitted, consciously or unconsciously, the low ranking on neatness to carry over to other factors, giving Carl undeserved low rating on all factors. Of course, if Carl was very neat the opposite could have occurred. Either way, the halo error does a disservice to the employee involved and the organization.

Problems in Performance Appraisal
• Central Tendency Central tendency is common error that occurs when employees are incorrectly rated near the average or middle of the scale. Some rating scale systems require the evaluator to justify in writing extremely high or extremely low ratings. In these instances, the rater may avoid possible controversy or criticism by giving only average rating.

Problems in Performance Appraisal
• Personal Bias Supervisors doing performance appraisal may have biases related to their employees personal characteristic such as race, religion, gender, disability or age. While federal legislation protects such employees discrimination continues to be an appraisal problem. • Discrimination in appraisal can be based on many factors in adding to those mentioned. For example: mild mannered people may be appraised more harshly simply because they do not raise serious objections to the results. This type of behavior is in sharp contrast to the hell raisers who often confirm the adage, ‘ the squaing wheel gets the grease.’ veso

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