UNIT V

Method of performance evaluation

feedback industry practices.
Promotion, demotion, transfer and
separation implication of job
change. The control process
importance methods
requirement of effective control
systems grievances causes
implications redressal methods.

PERFORMANCE APPRAISAL
It is a method of evaluating the
behavior of employees in the work
spot, normally including both the
quantitative and qualitative aspects of
job performance.
It refers to how well someone is doing
the assigned job and it is a continuous
process in every large scale
organization.
Definition
Flippo Performance
appraisal is the systematic,
periodic and an impartial rating
of an employees excellence in
matters pertaining to his present
job and his potential for a better
job
Methods of Performance
Appraisal
Traditional
Methods
Modern Methods
Graphic Rating scale
Ranking method
Paired comparison
method
Forced distribution
method
Checklist method
Essay or free form
appraisal
Group appraisal
Confidential reports
Behaviorally
Anchored Rating
scales (BARS)
Assessment centre
Human resource
accounting
Management by
objectives (MBO)
Psychological
Appraisal
Performance appraisal methods

1. Critical incident method
This format of performance appraisal
is a method which is involved
identifying and describing specific
incidents where employees did
something really well or that needs
improving during their performance
period.

2. Weighted checklist method
In this style, performance
appraisal is made under a
method where the jobs being
evaluated based on descriptive
statements about effective and
ineffective behavior on jobs.

3. Paired comparison analysis
This form of performance appraisal is
a good way to make full use of the
methods of options. There will be a
list of relevant options. Each option is
in comparison with the others in the
list. The results will be calculated and
then such option with highest score
will be mostly chosen.

4. Graphic rating scales
This format is considered the
oldest and most popular method to
assess the employees
performance.
In this style of performance
appraisal, the management just
simply does checks on the
performance levels of their staff.

5. Essay Evaluation method
In this style of performance appraisal,
managers/ supervisors are required to
figure out the strong and weak points
of staffs behaviors. Essay evaluation
method is a non-quantitative
technique. It is often mixed with the
method the graphic rating scale.

6. Behaviorally anchored rating
scales(BARS)
This formatted performance appraisal
is based on making rates on behaviors
or sets of indicators to determine the
effectiveness or ineffectiveness of
working performance. The form is a
mix of the rating scale and critical
incident techniques to assess
performance of the staff.

EXAMPLE: BARS
JOB: Specialty stores manager Dimension: Inventory control

5-------- always orders in the right quantities and at the right times
4--------
3---------
2---------
1--------- Never orders in the right quantities or at the right times
7. Performance ranking method
The performance appraisal of
ranking is used to assess the
working performance of employees
from the highest to lowest levels.
Managers will make comparisons of
an employee with the others, instead
of making comparison of each
employee with some certain
standards.

8. Management By Objectives (MBO)
method
MBO is a method of performance
appraisal in which managers or
employers set a list of objectives and
make assessments on their performance
on a regular basis, and finally make
rewards based on the results achieved.
This method mostly cares about the
results achieved (goals) but not to the
way how employees can fulfill them.

9. 360 performance appraisal
The style of 360 degree performance
appraisal is a method that employees
will give confidential and anonymous
assessments on their colleagues. This
post also information that can be used
as references for such methods of
performance assessments of 720, 540,
180

10.Forced ranking (forced distribution)
In this style of performance appraisal,
employees are ranked in terms of forced
allocations.
For instance, it is vital that the proportions
be shared in the way that 10 or 20 % will
be the highest levels of performances,
while 70 or 80% will be in the middle
level and the rest will be in the lowest
one.

11. Behavioral Observation
Scales(BOS)
The method based on the scales of
observation on behaviors is the one
in which important tasks that
workers have performed during
their working time will be assessed
on a regular basis.

12.ASSESSM ENT CENTRE METHOD
It is an assessment method that consists of
a standardized evaluation of behavior based on
multiple raters and multiple measures such as
in-basket exercises, paper and pencil ability
test, leaderless group discussions, simulations
and personality questionnaires.
Strictly speaking, an assessment centre is
designed to appraise individuals current
managerial ability, rather than their past
performance.
Rating Errors/ Appraisal Errors
Leniency/strictness errors
Halo error/effect
Central tendency error
Similarity Error
Contrast error
Recency error
Personal bias error
Anchoring / adjustment error
Control

Controlling is the process by
which management assures that
actual activities conform to
planned activities.
It is the managerial process for
measuring progress towards
planned performance and when
required taking corrective action.
Importance of control
Adapting to changing conditions
The modern business is associated with a
greater uncertainty. The conditions that
are existing and perceived during planning
phase may change so fast that it becomes
difficult to achieve the goals. A properly
designed control system can help the
managers to anticipate, monitor and
respond to changing conditions.
Minimizing mistakes and errors
Since mistakes and errors are
inevitable, so controls must be established
to catch and correct those errors that are
determinable to be effective and efficient
operation of the organization.
Coping with organizational complexity
diverse product lines and services must
be monitored along with the associated
markets, customers, competitors and so on.
Given such diversity and such magnitude of
operations, close controls are necessary.
Minimizing costs
Proper control system can make
significant contributions to the reduction
of operational costs as well as to the
maximization of output. Effective control
processes eliminate waste and
duplication of effort while lowering labor
costs and increasing output quality.
Delegation
There is a major trend toward the
downward delegation of authority and the
creation of autonomous work groups.

Control process
Establish
Standard
Evaluate performance
and take action
Compare performance
and standards
Measure
performance
Change the
standards
Correct the
deviation

Maintain the
status quo

INTERNAL MOBILITY
Companies move the employees from
one level to the another level and
from one job to the another job within
the company. This practice is called
internal mobility. It is of three types:
Promotion
Transfer
Demotion

Internal
Mobility
Promotions
Promotion refers to advancement of an
employee to a higher post carrying greater
responsibilities, higher status and better
salary.
A promotion may be defined as an upward
advancement of an employee in an
organization to another job, which
commands better pay/wages, better
status/prestige, and higher
opportunities/challenges, responsibility and
authority, better working environment,
hours of work and facilities and a higher
rank.
TYPES OF PROMOTION
VERTICAL PROMOTION:
under this type of promotion,
employee is moved to the next
higher level, in the organizational
hierarchy with greater
responsibility, authority, pay and
status.

Up gradation:
Under this type of promotion,
the job is upgraded in the
organizational hierarchy.
Consequently, the employee gets
more salary, higher authority and
responsibility. For example, the job
of medical officer in Railways
which was in group C is upgraded
as Group B position.
Dry Promotion
Under this promotion, the
employee is moved to the next
higher level in the
organizational hierarchy with
greater responsibility, authority
and status without any increase
in salary.
Bases of promotion/methods




Merit seniority Merit cum seniority
TRANSFER
It consists of a reassignment of an
employee to another job of
similar pay, status and
responsibility.
A transfer is a horizontal move
from one job to another. It is to be
distinguished from a promotion,
which is a vertical move in rank
and responsibility
Transfer may be defined as a lateral shift
causing movement of individuals from one
position to another usually without
involving any marked change in duties,
responsibilities, skills needed or
compensation.
TYPES OF TRANSFER
Personal

Production Remedial Versatility

Production Transfer
Such transfers are resorted to when
there is a need of manpower in one
department and surplus manpower in
other. Thus, production transfers are
made from a department which is
overstaffed to the other department
where manpower needs have increased
or vacancies have occurred through
separations.
Remedial Transfer
These transfers are made to rectify the
situation caused by faulty selection and
placement procedures. For instance, if the
initial placement of an individual is faulty
or he cannot adjust on the job, his transfer
to a more appropriate job is desirable. This
will act as a follow-up measure of selection
and placement procedures and will help the
employees to adjust themselves to suitable
jobs.
Versatility Transfer
Such transfers are made to
increase versatility of the
employees from one job to
another one department to
another. Transfer(job rotation) are
used as a device to train the
employees. Each employee is
provided a varied and broader job
experience by moving from one
job to another.



RESIGNATION
RETIREMENT
DISMISSAL
LAYOFF RETRENCHMENT
SEPARATION
DEMOTION
A demotion is the reassignment of an
employee to a job of lower status and pay.
Demotion is sometimes called a
downward transfer.
Demotion may be defined as the
assignment of an individual to a job of
lower rank and pay usually involving
lower of difficulty and responsibility.
Separation
Separation of an employee takes place when
his service agreement with the organization
comes to an end and the employee leaves the
organization. It may occur due to resignation,
retirement, death, dismissal and layoff.
Resignation
Resignation or quitting is a voluntary
separation initiated by the employee himself.
Exit interview need to be conducted at the
time of resignation
Layoff
It implies to the temporary removal of
an employee from the payroll of the
organization due to the circumstances
beyond the control of the employer. The
employee is not terminated and is expected
to be called back in future. The purpose of
layoff is to reduce the financial burden on
the organization when the human resources
cannot be utilized profitably.
Retrenchment
It means permanent termination of an
employees services for economic reasons
in a growing concern.
The employee must be given one months
notice in writing indicating the reason for
retrenchment or wages in lieu of such
notice.
The employee must be paid compensation
equal to 15 days wages for every completed
year of service
Termination of service due to disciplinary
action, prolonged illness, retirement, expiry
of agreement, closure of establishment does
not constitute retrenchment.

Dismissal
It means separating an employee from
the payroll for violation of organization
rules or for inadequate performance.
An employee may be discharged on the
ground of unsatisfactory performance or
misconduct.
Retirement
Employees who have rendered services
to the organization for a number of years
expect the organization to provide for their
future, when they have retired.
Every organization should have a clear-cut
rules for retirement and it should help the
employees to adjust himself after
retirement.

Retirement


Compulsory Forced premature
Compulsory retirement
In central and state government
offices, the retirement age is 60. but in
private organization may be given
extension so long as they are suitable to
do a work.
Forced retirement
If an employee is found guilty either in
court of law or has violated the conditions
enumerated in the service agreement, he
may force to retire from the service with
or without the benefits, though he has not
attained retirement age.
Premature retirement
If an employee becomes disabled
in an accident, or due to some
disease, he may be given the
option of retirement by the
management before attaining the
retirement age with full benefits
of retirement. It is also called as
voluntary retirement
scheme(VRS)
Employee Grievances
A grievance is a specific, formal
notice of employee dissatisfaction
expressed through an identified
procedure.
It means any real or imaginary
feeling of dissatisfaction and
injustice which an employee has
about his employment
relationship.
Definition
Grievance is any
dissatisfaction or feeling of
injustice in connection with
ones employment situation
that is brought to the attention
of management Dale S.
Beach
Causes / sources of Grievances
Promotion
Amenities
Continuity of service
Compensation
Disciplinary action
Fines
Increments
Leave
Medical benefits
Condition of work

Voluntary Arbitration
Committee of union &
management representative
Manager
Grievance committee
Head of the
Department
Supervisor
Foreman
Grievant Employee
Departmental
Representatives
Departmental
Representatives
V Stage within 7 days
III Stage communicates the decision
within 7 days
II Stage
within 3 days
I Stage answer to be
given within 48 hours
Conveys verbally
IV stage appeal to
management for revision
DISCIPLINARY PROCEDURE
Discipline refers to a condition or attitude,
prevailing among the employees, with
respect to rules and regulations of an
organization.
Procedure
1. Issuing a letter of charge to the
employee calling upon him for
explanation
2. Consideration of the explanation


3. Show-cause Notice
4. Holding of a Full-fledged
Enquiry
5. Considering the Enquiry
proceedings and findings and
making final order of
punishment
6. Follow-up
Types of Discipline
1. Preventive Discipline
Preventive discipline is action taken to
encourage employees to follow standards
and rules so that infractions are prevented.
2. Corrective discipline
Corrective discipline is an action that
follows a rule infraction and seeks to
discourage further infractions so that
future acts are in compliance with
standards.
Types of punishment
Oral Warnings
Written warnings pink slips
Loss of privileges and fines
Punitive suspension- employer
prohibits the employee from
performing the tasks assigned &
wages will not be provided
Withholding of increments
Demotion
Termination

RED HOT STOVE RULE
Douglas McGregor
Without the continual support and regard of the
subordinates, no manager can get the things done.
Hence Douglas McGregor draws an analogy
between touching a hot stove and undergoing
discipline and
The burn is immediate
He had a warning. When the stove was red, he
knew what would happen if he touched it
The effect is consistent. Everyone who touches a
red hot stove gets burnt
The effect is impersonal. A person is burnt not
because of who he is but because he touched the
red hot stove.
Grievance Redressal in Indian
Industry
The Industrial Employment
(Standing Orders)Act, 1946
It provides that every establishment
employing 100 or more workers should
frame standing orders which should
contain, among other matters, provision
for means of redressing the workers
grievances against unfair treatment or
wrongful exactions by the employer or his
agents or servants.
The Factories Act, 1948
It provides for the
appointment of welfare officers
in every factory wherein 500 or
more workers are ordinarily
employed. These officers are
generally entrusted with the
task of dealing with grievances
and complaints.
The Industrial Disputes Act,
1947: The employer in relation to
every industrial establishment in
which 50 or more workmen are
employed shall provide for
grievance settlement authority for
the settlement of industrial
disputes connected with an
industrial workmen employed in
the establishment