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PERFORMANCE MANAGEMENT SYSTEM

Course Instructor: Ms. Hina Shahab

Outline Lecture 11
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Performance Assessment Meaning Objectives Assessment process Appraisal tools Appraisal forms Appraisal Methods Absolute methods Relative Methods Class activity

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.

Objectives of Performance Appraisal

According to:

concrete and tangible particulars about their work assessment of performance

measuring the efficiency maintaining organizational control.

Aims at:
Personal development work satisfaction involvement in the organization.

mutual goals of the employees & the organization. growth & development increase harmony & enhance effectiveness

Process

Steps in Appraising Performance

Defining the job

Making

sure that you and your subordinate agree on his or her duties and job standards. your subordinates actual performance to the standards that have been set; this usually involves some type of rating form. the subordinates performance and progress, and making plans for any development required.

Appraising performance
Comparing

Providing feedback
Discussing

Designing the Appraisal Tool

What to measure?
Work

output (quality and quantity)

competencies (objective) achievement

Personal Goal

How to measure?
Absolute

methods

Ranking

methods

Major Components of Appraisal Forms (1)

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Basic Employee Information Accountabilities, Objectives, and Standards Competencies and Indicators

Major Achievements and Contributions

Stakeholder Input Employee Comments Signatures

Major Components of Appraisal Forms (2)

(could be included in a separate form)
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Developmental Achievements Developmental

Needs Plans Goals

Desirable Features for All Appraisal Forms

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Simplicity Relevancy Descriptiveness Adaptability

Comprehensiveness Definitional Clarity Communication Time Orientation

Appraisal period
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Number of Meetings

Annual Semi-annual Quarterly

6 Types of Formal Meetings

(can be combined)
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System Inauguration Self-Appraisal Classical Performance Review Merit/Salary Review Development Plan Objective Setting

Who Should Provide Performance Information?

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Employees should be involved in selecting Which sources evaluate Which performance dimensions
When employees are actively involved Higher acceptance of results Perception that system is fair

Who Should Provide Performance Information?

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Direct knowledge of employee performance

Supervisors Peers Subordinates Self Customers

Supervisors
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Advantages
Best

position to evaluate performance vs. strategic goals Make decisions about rewards

Disadvantages
Supervisor

may not be able to directly observe performance Evaluations may be biased

Peers
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Advantages
Assess

teamwork

Disadvantages
Possible

friendship bias May be less discriminating

Subordinates
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Advantages
Accurate

when used for developmental

purposes Good position to assess some competencies

Disadvantages
Inflated

when used for administrative purposes May fear retaliation (confidentiality is key)

Self
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Advantages
Increased

acceptance of decisions Decreased defensiveness during appraisal interview Good position to track activities during review period

Disadvantages
May

be more lenient and biased

Customers (external and internal)

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Advantages
Employees

become more focused on meeting customer expectations

Disadvantages
Time Money

Evaluation Methods
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Absolute Methods Measuring the employee performance against some established standards

Graphic Rating Scale Forced choice approach Bars Checklist method Critical incident method

Relative Methods Evaluating an employee performance by comparing the employee with other employees

Alternative Ranking method Paired Ranking method

Graphic Rating Scale

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Graphic Rating Scale: A performance appraisal that rates the degree to which the employee has achieved various characteristics.
The graphic rating scale is the most common type of appraisal used. Various characteristics such as job knowledge or punctuality are rated by the degree of achievement.

The rate usually receives a score of 1 to 5, with 5 representing excellent performance. Some forms allow for additional comments.

Cont
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The advantage of this type of appraisal is that it is relatively easy to use.

However,
What

the ratings themselves are subjective.

one supervisor considers excellent may seem just average to someone else. Also, many supervisors tend to rate everyone as being at least a little bit above average. Additional descriptive information is an attempt to overcome these problems.

Graphic or Linear Rating Scales

0 5 10 15 20

No interest In work: consistent complainer

Careless: In-different Instructions

Interested in work: Accepts opinions & advice of others

10
Takes decisions promptly

Enthusiasti c about job & fellowworkers

Enthusiastic opinions & advice sought by others

0
Slow to take decisions

5
Take decisions after careful consideration

15
Take decisions in consultation with others whose views he values

20
Take decisions without consultation

925

Graphic Rating Scale with Space for Comments

Figure 93

Forced-Choice Approach
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Forced-choice Approach: A performance appraisal that presents the appraiser with sets of statements describing employee behavior; the appraiser must choose which statement is most characteristic of the employee and which is least characteristic.

Cont
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This type of appraisal form gives the supervisor sets of statements describing employee behavior.

For each set of statements, the supervisor must select the one that is most and the one that is least characteristic of the employee.

These questionnaires prevent the supervisor from saying only positive things about employees. It is used when an organization finds that supervisors have been rating an unbelievably high proportion of employees as above average.

Cont
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Forced distribution method

Similar

to grading on a curve; predetermined percentages of ratees are placed in various performance categories. Example:
15%

high performers 20% high-average performers 30% average performers 20% low-average performers 15% low performers

Narrative Forms

Forced choice method

Criteria 1.Regularity on the job Most Rating Least

Always regular Inform in advance for delay Never regular Remain absent Neither regular nor irregular

Forced distribution method

No. of employees

10% 20%
poor

40%

20%

10%
Excellent

Below average good average Force distribution curve

Essay Appraisal
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Sometimes the supervisor must write a description of the employees performance.

The essay appraisal is often used along with other types of appraisals, notably graphic rating scales. They provide an opportunity for supervisors to describe aspects of performance not thoroughly covered by an appraisal questionnaire. The disadvantage of this method is that their quality depends on the supervisors writing skills.

Specimen of Staff Assessment Form [Descriptive Essay Type]

Staff Appraisal
Name . . . . . . . Job Title . . . . . . . Department . . . . . . . . . . . . Date of Review . . . . . . . Age . . . . . .. . Years in present job Section I Appraisal Of Performance Note to Appraiser 1. Appraisal must cover the period of the preceding 12 months 2. Consideration to every function & responsibility of the job 3. An objective factual assessment of an employees improvement or deterioration Section II Promotability & Potential Promotability 1. Promotion now 2. Within 2 years 3. Within 5 years 4. Unlikely to qualify for promotion Section III Career Development Section IV
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Notes on Interview with employee Comments on & Endorsement by Reviewing Authority

Section V

Behaviorally Anchored Rating Scales

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Behaviorally Anchored Rating Scales: A performance appraisal in which the employee is rated on scales containing statements describing performance in several areas.

This is a method of performance appraisal that is tailored to the organization and positions within that organization. Some organizations pay behavioral scientists or organizational psychologists to create behaviorally anchored rating scales. These scales rate employee performance in several areas. The supervisor selects the statement that best describes how the employee performs. Each job title in the organization has a different set of rating statements.

Cont
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The advantage of using this technique is that it is tailored to the organizations objectives for employees. It also tends to be less subjective than some other approaches. However, developing the scales is timeconsuming and therefore relatively expensive.

Cont
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Behaviorally anchored rating scale (BARS)

An

appraisal method that uses quantified scale with specific narrative examples of good and poor performance.

Developing a BARS:
Generate

critical incidents Develop performance dimensions Reallocate incidents Scale the incidents Develop a final instrument

936

AppraisalCoaching Worksheet

Source: Reprinted with permission of the publisher, HRnext.com; copyright HRnext.com, 2003.

Figure 98

Performance Extremely good

Behavioral Anchored Rating Scales

Points Behavior 7 Can expect trainee to make valuable suggestions for increased sales and to have positive relationships with customers all over the country.

Good Above average Average Below average Poor

6 5 4 3 2

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. Can expect to inform only a part of the customers. Can expect to take extended coffee breaks & roam around purposelessly.

Extremely poor 1

Checklist Appraisal
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A checklist appraisal is a record of performance, not an evaluation by the supervisor. It contains a series of questions about the employees performance.
The

supervisor checks boxes to answer the questions yes or no. The human resources department has a key for scoring the items resulting in a rating of the employees performance.

Cont
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The advantage of this type of appraisal is that it is easy to complete. However, it has several disadvantages.
The

checklist can be difficult to prepare, and each job category will probably require a different set of questions. Also, there is no way for the supervisor to adjust the answers for any special circumstances that affect performance.

Critical-Incident Appraisal
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Critical-incident Appraisal: A performance appraisal in which the supervisor keeps a record of incidents that show positive and negative ways the employee has acted; the supervisor uses this record to assess the employees performance.

Cont
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To conduct a critical-incident appraisal, the supervisor keeps a written record of incidents that show positive and negative ways in which the employee has acted.
The record should include dates, people involved, actions taken, and any other details that are relevant. At the time of the appraisal, the supervisor reviews the record to reach an overall evaluation of the employees behavior. During the appraisal interview, the employee has a chance to respond to each of the incidents recorded.

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The advantage of this method is that it focuses on actual behaviors.

However,

the recordkeeping is time-consuming, and since negative behaviors are more likely to be recorded than positive behaviors, it can be overly harsh.

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Examples of Critical Incidents for an Assistant Plant Manager

Table 91

Critical Incident method

Ex: A fire, sudden breakdown, accident

Workers A B C D

Reaction Informed the supervisor immediately Become anxious on loss of output Tried to repair the machine Complained for poor maintenance

scale 5 4 3 2

Was happy to forced test

Relative Methods
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Alternation ranking method

Ranking

employees from best to worst on a particular trait, choosing highest, then lowest, until all are ranked.
employees by making a chart of all possible pairs of the employees for each trait and indicating which is the better employee of the pair.

Paired comparison method

Ranking

Cont
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Paired-comparison Approach: A performance appraisal that measures the relative performance of employees in a group.
This is a method of performance evaluation that results in a rank ordering of employees to come up with a best employee. This type of approach measures the relative performance of employees in a group.

Cont
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The paired-comparison approach is appropriate when the supervisor needs to find one outstanding employee in a group for a promotion or special assignment.
The

fact that paired comparison makes some employees look good at the expense of others makes this technique less useful as a method of providing feedback to individual employees.

Alternation Ranking Scale

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Figure 96

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Ranking Employees by the Paired Comparison Method

Note: + means better than. means worse than. For each chart, add up the number of 1s in each column to get the highest-ranked employee.

Agents by Someone Other than the Supervisor

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360-degree Feedback: Performance appraisal that combines assessment from several sources. Because the supervisor cannot know all of an employees behaviors and their impact on others in the organization, the supervisor may combine his or her appraisal with self-assessments by the employee or with appraisals by peers or subordinates.

Combining several sources of appraisals is called 360-degree feedback. The self-assessment may be done before the interview. Then the supervisor and employee can compare the employees appraisal with his or her own evaluation.

360 degree performance appraisal

Class activity
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Construct appraisal form for the post of HR manager using the suitable appraisal method studied above.