PERFORMANCE APPRAISAL


INTRODUCTION






       After an employee has been selected for a job, has been trained to do it and has worked on it for a period of time, his performance should be evaluated.


       Performance Evaluation or Appraisal is the process of deciding how employees do their jobs. Performance here refers to the degree of accomplishment of the tasks that make up an individual’s job. It indicates how well an individual is fulfilling the job requirements. Often the term is confused with efforts, which means energy expended and used in a wrong sense.



DEFINITION


      Performance appraisal is a method of evaluating the behavior of employees in the workspot, normally including both the quantitative and qualitative aspects of job performance.

      It is a systematic and objective way of evaluating both work-related behavior and potential of employees. It is a process that involves determining and communicating to an employee how he or she is performing the job and ideally, establishing a plan of improvement.


FEATURES


          The main characteristics of performance appraisal may be listed thus:

      i. The appraisal is a systematic process involving three steps:

      a. Setting work standards.

      b. Assessing employee's actual performance relative to these standards.

      c. Offering feedback to the employee so that he can eliminate deficiencies and improve performance in course of time.

      ii. It tries to find out how well the employee is performing the job and tries to establish a plan for further improvement.

      iii. The appraisal is carried out periodically, according to a definite plan. It is certainly not a one shot deal.

      iv. Performance appraisal is not a past-oriented activity, with the intention of putting poor performers in a spot. Rather, it is a future oriented activity showing employees where things have gone wrong, how to set everything in order, and deliver results using their potential in a proper way.

      v. Performance appraisal is not job evaluation. Performance appraisal refers to how well someone is doing an assigned job. Job evaluation, on the other hand, determines how much a job is worth to the organization and therefore, what range of pay should be assigned to the job.

      vi. Performance appraisal is not limited to ‘calling the fouls’. Its focus is on employee development. It forces managers to become coaches rather then judges. The appraisal process provides an opportunity to identify issues for discussion, eliminate any potential problems, and set new goals for achieving high performance.

      vii. Performance appraisal may be formal or informal. The informal evaluation is more likely to be subjective and influenced by personal factors. Some employees are liked better than others and have, for that reason only, better chances of receiving various kinds of rewards than others. The formal system is likely to be more fair and objective, since it is carried out in a systematic manner, using printed appraisal forms.


METHODS


The performance appraisal methods may be classified into three categories:
Individual Evaluation Methods

      Under the individual evaluation methods of merit rating, employees are evaluated one at a time without comparing them with other employees in the organization.

      1. Confidential report: It is mostly used in government organizations. It is a descriptive report prepared, generally at the end of every year, by the employee’s immediate superior. The report highlights the strengths and weaknesses of the subordinate. The report is not databased. The impressions of the superior about the subordinate are merely recorded there. It does not offer any feedback to the appraisee.

      2. Essay evaluation: Under this method, the rater is asked to express the strong as well as weak points of the employee’s behavior. This technique is normally used with a combination of the graphic rating scale because the rater can elaborately present the scale by substantiating an explanation for his rating. While preparing the essay on the employee, the rater considers the following factors: (i) Job knowledge and potential of the employee; (ii) Employee’s understanding of the company’s programmes, policies, objectives, etc.; (iii) The employee’s relations with co-workers and superiors; (iv) The employee’s general planning, organizing and controlling ability; (v) The attitudes and perceptions of the employee, in general.

      3. Critical incident technique: Under this method, the manager prepares lists of statements of every effective and ineffective behavior of an employee. These critical incidents or events represent the outstanding or poor behavior of employees on the job. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers’ behavior. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers’ performance. 



      4. Checklists and weighted checklists: Another simple type of individual evaluation method is the checklist. A checklist represents, in its simplest form, a set of objectives or descriptive statements about the employee and his behavior. If the rater believes strongly that the employee possesses a particular listed trait, he checks the item; otherwise, he leaves the item blank. A more recent variation of the checklist method is the weighted list. Under this, the value of each question may be weighted equally or certain questions may be weighted more heavily than others. The following are some of the sample questions in the checklist.
      i. Is the employee really interested in the task assigned? Yes/No
      ii. Is he respected by his colleagues (co-workers) Yes/No
      iii. Does he respect his superiors? Yes/No
      iv. Does he follow instructions properly? Yes/No
      v. Does he make mistakes frequently? Yes/No
      A rating score from the checklist helps the manager in evaluation of the performance of the employee.
      5. Graphic rating scale: Under this method, a printed form, as shown below, is used Performance Appraisal to evaluate the performance of an employee.
      A variety of traits may be used in these types of rating devices, the most common being the quantity and quality of work. The rating scales can also be adapted by including traits that the company considers important for effectiveness on the job.
      Typical Graphic Rating Scale
      Employee Name................... Job title .................
      Department ......................... Rate ...............
      Data ..................................
                                                    Unsatis-  factory                                           Fair                             Satis- factory                                       Good Outstanding
Quantity of work
Volume of work
under normal
working conditions
Quality of work
neatness, thoroughness
and accuracy of work
Knowledge of job
A clear understanding
of the factors connected
with the job
Attitude
Exhibits enthusiasm and
cooperativeness on the job
Dependability
Conscientious,
thorough, reliable, accurate,
with respect to attendance,
reliefs, lunch breaks, etc.
Cooperation
Willingness and ability
to work with others to
produce desired goals.
      7. Forced choice method: This method was developed to eliminate bias and the preponderance of high ratings that might occur in some organizations. The primary purpose of the forced choice method is to correct the tendency of a rater to give consistently high or low ratings to all the employees.
      This method makes use of several sets of pair phrases, two of which may be positive and two negative and the rater is asked to indicate which of the four phrases is the most and least descriptive of a particular worker.
      8. Management by Objectives (MBO): MBO requires the management to set specific, measurable goals with each employee and then periodically discuss the latter's progress towards these goals.
      This technique emphazises participatively set goals (that are agreed upon by the superior and the employee) that are tangible, verifiable and measurable. MBO focuses attention on what must be accomplished (goals) rather than how it is to be accomplished.
Multiple-person Evaluation Techniques
         The above discussed methods are used to evaluate employees one at a time. In this section, let us discuss some techniques of evaluating one employee in comparison to another. Three such frequently used methods in organizations are – ranking, paired comparison and forced distribution
      1. Ranking method: This is a relatively easy method of performance evaluation. Under this method, the ranking of an employee in a work group is done against that of another employee. The relative position of each employee is expressed in terms of his numerical rank. It may also be done by ranking a person on his job performance against another member of the competitive group. The quintessence of this method is that employees are ranked according to their relative levels of performance.
      While using this method, the evaluator is asked to rate employees from highest to lowest on some overall criterion. Though it is relatively easier to rank the best and the worst employees, it is very difficult to rank the average employees.
      2. Paired comparison method: Ranking becomes more reliable and easier under the paired comparison method. Each worker is compared with all other employees in the group; for every trait, the worker is compared with all other employees.
      For instance, when there are five employees to be compared, then A’s performance is compared with that of B’s and decision is arrived at as to whose is better or worse. Next, B is also compared with all others. Since A is already compared with B, this time B is to be compared with only C, D and E. By this method, when there are five employees, fifteen decisions are made (comparisons).
      3. Forced distribution method: Under this system, the rater is asked to appraise the employee according to a predetermined distribution scale. The rater’s bias is sought to be eliminated here because workers are not placed at a higher or lower end of the scale.
      Normally, the two criteria used here for rating are the job performance and promotability. Further, a five-point performance scale is used without any mention of descriptive statements. Workers are placed between the two extremes of ‘good’ and ‘bad’ performances.
PROBLEMS AND SOLUTIONS
          The problems inherent in performance appraisal may be listed thus:
      1. Judgement errors: People commit mistakes while evaluating people and their performance. Biases and judgement errors of various kinds may spoil the show. Bias here refers to distortion of a measurement
      2. Lack of rater preparedness: The raters may not be adequately trained to carry out performance management activities.
      3. Ineffective organizational policies and practices: If the sincere appraisal effort put in by a rater is not suitably rewarded, the motivation to do the job thoroughly finishes off.
Solutions
      The following are some of the steps required to be followed while introducing a potential appraisal system:
      1. Role Descriptions: Organizational roles and functions must be defined clearly. To this end, job descriptions must be prepared for each job.
      2. Qualities needed to perform the roles: Based on job descriptions, the roles to be played by people must be prepared (i.e., technical, managerial jobs and behavioral dimensions).
      3. Rating mechanisms: Besides listing the functions and qualities, the potential appraisal system must list mechanisms of judging the qualities of employees
      i. Rating by others: The potential of a candidate could be rated by the immediate supervisor who is acquainted with the candidate’s work in the past, especially his technical capabilities.
      ii. Tests: Managerial and behavioural dimensions can be measured through a battery of psychological tests.
      iii. Games: Simulation games and exercises (assessment centre, business games, in-basket, role play, etc.) could be used to uncover the potential of a candidate.
      iv. Records: Performance records and ratings of a candidate on his previous jobs could be examined carefully on various dimensions such as initiative, creativity, risk taking ability, etc., which might play a key role in discharging his duties in a new job.
      Organizing the system After covering the above preliminaries, the HR manager must set up a system that will allow the introduction of the scheme smoothly incorporating answers to some complex questions
      Feedback The system must provide an opportunity for every employee to know the results of his assessment. “He should be helped to understand the qualities actually required for performing the role for which he thinks he has the potential, the mechanisms used by the organisations to appraise his potential and the results of such an appraisal”.

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