What are the modern methods ofperformance appraisal? Posted in Performance Planning and Potential Appraisal | Email This Post Apart from earlier techniques of appraisals mentioned here, we now have modern methods too. Some of these are:1. Assessment centre method: This method was used for the first time in 1930 by the German army and then in 1960’s by the British army. This method tests a candidate in different social situations using a number of assessor and procedures. The performance of an employee an also his potential for a new job is evaluated in this method by assessing his performance on job related simulations. Characteristics that the concerned managers feel are important for the success of a particular job are included in these simulations. Techniques like business games role playing and in basket exercises are used in this method. The employees are evaluated individually as well as collectively on job related characteristics. Personal interview and projective tests help in assessing the motivation, career orientation and dependence on others of an employee. To measure the intellectual capacity written tests are used. The evaluators in this method consist of experienced manager working at different levels who prepare a summary report for the management as well as for the employees. This technique usually measures the planning ability interpersonal skills and organizational skills of an employee. 2. Human Resource Accounting Method: Human resources are a valuable asset for any organization and it can be valued in monetary terms. This method evaluates the performance of an employee in terms of costs and contributions. HR costs include expenses incurred on HR planning recruitment selection induction and training. The difference between this costs and the contribution by an employee reflects the performance of that employee. This method is still developing hence is not very popular at present. 3. Behaviorally anchored rating scale (BARS): This method combines the graphic rating scale and the critical incident method. It determines in advance the critical areas of the performance and the most effective behavior to achieve the results. Then the actual job behavior of an employee is evaluated against the predetermined behavior. The following steps are used for constructing BARS. 1. Supervisor and other persons well acquainted with a job are asked to described specific critical incidence of effective performance behavior 2. Then these persons categorized the incidents into sets of performance dimensions and each set is then defined. 3. These people then reallocate the original critical incidents. They are given the cluster The career aspirations of an employee are also put in proper prospective. 4. A sub set of incidents is used as behavior anchors for the performance dimensions. feedback about the performance of any employee as well as his development areas during the review period. It also gives a chance to the employee to express his career plans which is in the interest of the organization as it knows beforehand the aspirations of its employee. It is called a 360 degree method because it involves the evaluation of an employee by persons above him. These measures are use for operating the unit as well as for appraising the performance of the employees. objective and participative.In this process the supervisor and subordinate members jointly identify the common goals of the organization and set the areas of the responsibility of each individual in terms of results expected from that person. The employee to be evaluated thus acquires a central position and everyone around him participates in the appraisal process in the 360 degree method. The employees get a chance to share the development areas with their seniors based on their self appraisal and jointly worked out a plan in tune with the organizational realities like the availability of resources and time. 4 Appraisal through management by objectives (MBO): This concept was introduced by Peter Drucker in 1954 who named it management by objectives and self control. The second group then rates each incident on a 7 – 9 point scale where the rating is done on the basis of how well the behavior described in the incidents represented the performance on the appropriate dimensions. The following four are the main components of 360 degree appraisal : Self appraisal: It allows an employee complete freedom in accessing his or her strengths objectively and identifying the areas of development. below him and alongside him. subordinates and peers. Structured questionnaires are used to collect information from the seniors. A critical incidents is retain only a some percentage that is usually between 50 – 80 percent of this group assigns the incidents to the same cluster as was done by the earlier group. It is an effective way it is also known as goal setting approach to appraisal . It helps in setting goals for the employees that help in achieve the organizational goals and improve the performance of the employee. 5. Appraisal by superiors: An appraisal by superiors involves providing constructive. . peer appraisal and appraisal by customers. It introduced the concepts of self appraisal subordinates appraisal.definition and critical incidents and are asked to re-design each incident to the dimensions that describes it the best. 5 The 360 degree appraisal: The 360 degree method of performance appraisal is used to make the appraisal process more transparent. It aims at informing the employee their future prospectus and helps the organization in drawing your suitable successions plan. Peer appraisal: It also plays an important role in 360 degree appraisal as the role of peers is quite important in life of an employee. building a team and communicating with them effectively form the basis of appraisal by the subordinates. It mainly focuses on feedback about the style of functioning of the employee under review and can also include his ability to work as team leader besides his co-operation and collaboration. delegating the work. Potential appraisal: It is different from performance appraisal as it refers to the abilities of the employees that are not being used at the time of appraisal. The potential of the employees is judged on the basis of his present performance. personality traits. It also looks at the unused skills and knowledge of an employee. As the subordinates play an important role in the performance of the employee. It searches for the latent abilities of the employee in discharging higher responsibilities in future. It also requires updating the training efforts regularly and advised the employees on things which they can do to improve their career prospectus. Selecting the right peers is very important and peers from the departments that are directly related with the department of the employee should also be included. The capability of a superior in motivating. past experience and age and qualification. . The feedback by the subordinates gives firsthand account of how they look at their superior in terms of working style.Appraisal by subordinates: This is a unique feature of the 360 degree method of appraisal. the modern techniques laid more stress on the evaluation of work results. 2. It can be cumbersome if the number of employees is very large. Strayed ranking method: This is the old and simplest method of performance appraisal. Two types of rating scales are used: Continuous and discontinues. These traits can be initiative dependability creativity attitude loyalty emotional stability and co-ordination. Employees are shown in categories that range from poor to excellent by the evaluator. In this method ranks are assigned relatively to all the employees working in the same unit and doing the same job without analyzing their performance. The personality and behavior of the employee also find mention in this report. 5. Essay or free form method: As the name suggests the appraiser write a short essay detailing the performance of the employee. In first type degree of a trait is measure along a continuum like 0 1 2 3. 3. While the traditional methods base their findings on the personality trades of an individual like creativity. Confidential report: It is used for promotion and transfer of an employee and is prepared by the immediate superior who describes in detail the strength and weaknesses along with major achievements and failures of the employee. It is also difficult to compare two Essay appraisals as there is no common criterion for the appraiser. Graphic or linear rating scale: In this method a numerical scale is used which indicates different degrees to a particular trait. responsibility. This method was evolved by Joseph Tiffin but it also suffers from certain limitations as the performance criteria related to a job are not used and the reasons for assigning a category to particular employee are not clear. The traditional methods or techniques are: 1. Forced distribution method: In this method the evaluator is required to distribute his rating in the form of normal frequency distribution. and leadership.What are the techniques of Performance Appraisal? Posted in Performance Planning and Potential Appraisal | Email This Post The techniques of appraisal have been divided into two categories: The modern and the traditional techniques. It is a very time consuming method and is prone to buys also as specific performance dimensions are not considered. IN discontinues rating scale boxes are used to show the different degrees of the . The quality of appraisal also depends on the writing skills of the appraiser. The method biased as the ranking is not based on the specific performance measures of a job. The evaluator gives a particular ranking on each trait to every employee. The other limitations of this method are that it only tells how an employee stands in comparison with other employees. 4. traits like (I) no interest (II) indifferent (III) Interesting (IV) enthusiastic (V) very enthusiastic. It is based on a principal that there are some significant acts in the behavior and performance of every employee which can lead to the success of failure on the job. The ratings of the employee depend on the positive or negative behavior during these events. 6. Group appraisal method: Employees are rated by a group of people comprising the immediate supervisor of the employee and other supervisor who have the knowledge of the employee work along with the concerned head of the department and a personnel expert. This helps the employee understand the results expected from him. The job objectives of an employee are formulated by him in consultation with his supervisor keeping in mind the organizational objectives. Though it is a time consuming method. it is free from bias. What is Performance Planning? Posted in Performance Planning and Potential Appraisal | Email This Post Performance planning is a process in which it is determining that how a job has to be done and how the success of the job is to be defined as measured. The supervisor keeps a record of these events which can be good or bad and also records the behavior of the employee during such an event. It is different from performance appraisal as it is more concern with what and how to appraise as against the need for appraisal in performance planning. Critical incident method: This method was developed after a research by the armed forces of United States of the 2nd world war. Continues record keeping is also not possible as such events keep on happening frequently. This method also has certain limitations like it is cumbersome and time consuming and a lot of important information is lost while coating the incident after a considerable gap of time. The process of performance planning is a under: 1. The bios by the supervisor in reporting these incidents can also not be ruled out completely. 7. Performance planning for the employees close from the organizational goals and is jointly undertaken by the employee and his supervisor. This group determines the standards and then measures the actual performance of the employee. . It suggests creative measures after analyzing the causes of poor performance. The supervisor now assumes the role of a coach and counselor. During this process each and every objective and its contribution in the fulfillment of the organizational objectives is discussed in detail. . The need for any developmental activity which might be useful in preparing the employee for the successful discharged of his new responsibilities are also worked out. After the performance plan is prepared it becomes the responsibility of the employee to successfully carry out the plan and achieve the objectives/targets decided in the plan. The method of determining the success of each objective is also determined.2. 4. 3. The evaluation of the process of the performance is very much necessary as it helps a lot to have an idea of the time. the cost and also the efforts that are being made. The cost in the process of the planning largely depends on the competition. the implementation is also needed and then following this step with the process of the evaluation. Money value of any type of the plan is referred to as the cost. . which mainly involves the time when one is working conceptually on an idea. Certain objectives in the plans are kept in the mind and then it is made sure that the performance is made according to the various objectives. What is the role and the position of the cost in the process of the planning? Posted in Principles of Management| Email This Post It is very important that the planning is done in the particular framework of the time. the performance should be according to a certain plan and should be at the least possible cost and the most important thing to remember here is that it should be able to fully satisfy the customers. The performance is a very action oriented concept involving the planning of the actions for the implementation. the various products that are to be used and the types of the services that are to be provided. The importance of the time has been explained above and now we will try to understand the importance of the cost in the process of the planning. The cost of the planning can be adjusted at the different stages of the process with the help of the various alternatives or the substitutes that are available for the various products and the services. The planning starts firstly from the stage of the dreaming. It is very important that the performance is very efficient and at the same time very effective in the nature. And after this. the performance and the cost. the planning is very much needed for fulfilling these dreams. And for the achievement of such a performance.How Planning is Linked with Performance? Posted in Principles of Management| Email This Post Planning is generally done for the performance. For the implementation of such dreams. The planning is a very purposeful activity and just dreaming is not enough for fulfilling the planning. planning is a dire necessity. the whole process of the planning is very greatly affected. it is very necessary to keep the control over the resources and its use as the actions depends a lot on the resources that are available. . For keeping the planning within the planned costs.One important point that must be remembered during the process of the implementation is that the cost must remain between the planned margins. And if the costs at any time cross the margins. . motivation. career . organisations outsource assessment centres instead of making them by their own. intellectual capability.Modern Methods of Performance Appraisal ASSESSMENT CENTRES An assessment centre is a place to evaluate an individual potentiality and performance. so as to position he/she in the core functional areas. The major competencies that are judged in assessment centers are interpersonal skills. Generally. normally. planning and organizing capabilities. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics. employees are given an assignment similar to the job they would be expected to perform if promoted. tests and exercises. assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. [This method of performance appraisal is being opted by the RBI (Reserve Bank of India) for assessment of its officers] An assessment center typically involves the use of methods like social/informal events. and provide the results to organizations. the premium research website promoted by TimesJobs.com survey. Photo. Facts [+] AssessPeople Ltd. and having wings at all metros across country. It consists of predetermined critical areas of job performance or . India. skills. 20% companies said they use the center's services when seeking a position on senior management level. more than 80% of the surveyed employers predict an increased use of assessment centres in near future because of their expertise and unbiased in assessing an individual fit and biggest limitation comes from the lack of skilled assessors to perform the assessment task effectively. Nearly 30% companies seek assessment center services while moving an employee from executive position to managerial position. As per the TJinsite. They are a pioneer in India to use internet as a platform to design. based at Chennai. knowledge. administer. abilities. behaviours. What they do? Pioneer in workforce assessment services since 1999 Assessment services for o High School Students to Senior Managers o Individual and team assessments Assessment of aptitudes. attitude and work values Multilingual Assessments Biometrics. is a workforce assessment company.orientation etc. Phone2web End2End Assessments Organisation-wide Surveys BEHAVIORALLY ANCHORED RATING SCALES Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which combines the graphic rating scale and critical incidents method. assessment centers are also an effective way to determine the training and development needs of the targeted employees. morale. competencies. adaptability and reliability. HUMAN RESOURCE ACCOUNTING METHOD . Developing and practicing BARS requires expert knowledge. In this method. job knowledge etc). These statements are developed from critical incidents. the qualities like inter-personal relationships. These critical behaviors are categorized and appointed a numerical value which is used as the basis for rating performance.sets of behavioral statements describing important job performance qualities as good or bad (for eg. an employee’s actual job behaviour is judged against the desired behaviour by recording and comparing the behaviour with BARS. A behaviorally anchored rating scale is an employee appraisal system where raters distinguish between successful and unsuccessful job performance by collecting and listing critical job factors. and use these measures as guides for operating the unit and assessing the contribution of each of its members. Drucker first described management by objectives in 1954 in the Practice of Management. Human resources are valuable assets for every organization. recruitment and selection costs. Ideally. define each individual’s major areas of responsibility in terms of the results expected of him. The difference between the cost and the contribution will be the performance of the employees.Human Resource Accounting is a method to measure the effectiveness of personnel management activities and the use of people in an organization. including wages and salaries and training expenses.HRA is the process of Assigning. Odiorne. George S. Drucker pointed the importance of managers having clear objectives that support the purposes of those in higher positions in the organisation. Human resource accounting method tries to find the relative worth of these assets in the terms of money. In this method the Performance appraisal of the employees is judged in terms of cost and contribution of the employees. McGregor argues that by establishing performance goals for . budgeting.” Much of the initial impetus for MBO was provided by Peter Drucker (1954) and by Douglas McGregor (1960). MANAGEMENT BY OBJECTIVES The definition of MBO. The cost of employees include all the expenses incurred on them like their compensation. the contribution of the employees should be greater than the cost incurred on them. “Management by objectives is a process whereby the superior and subordinate managers of an organisation jointly identify its common goals. as expressed by its foremost proponent. Dr. induction and training costs etc whereas their contribution includes the total value added (in monetary terms). and reporting the cost of human resources incurred in an organization. the individual’s job. Effective goal-setting and planning by top management. the problems of appraisal of performance are minimised. note its following characteristics: 1. to help the subordinate achieve the agreed upon . 7. 5. new or modified goals . Carroll and Tosi (1973). feedback. MBO in essence involves the setting out clearly defined goals of an employee in agreement with his superior.day basis. 4. The key features of management by objectives are as under: 1. The subordinate sets his own short-term performance goals or . 4. 3. Along with mutual goal-setting. Superior and subordinate get together and jointly agree upon . the superior and . Mutual goal-setting. MBO is. 5. The establishment of organisational goals.performance. in an extensive account of MBO.targets in cooperation with his superior. a method of mutual goal-setting.subordinate get together to evaluate progress towards the . It is a resultoriented philosophy. The setting of individual objectives in relation to organisational goals. enabling an employee to measure progress toward a goal which the employee often has helped to set.the list the principal duties and areas of responsibility of . He tries. on a day-to-. From time to time.employees after reaching agreement with superiors. The superior plays a supportive role. A periodic review of performance as it relates to organisational goals.are set for the ensuing period. Frequent individual performance reviews. 2. which takes place regularly to evaluate progress towards specified goals. taking action to assure goal attainment. Some freedom in developing means of achieving objectives. 6. At those meetings. He counsels and coaches. thus. a major component of MBO is the performance review session between the superior and subordinate. In the goalsetting phase of MBO. measuring progress towards the goals. 2.goals.agreed-upon goals. . as decided upon. a superior and subordinate discuss job performance problems and a goal is agreed upon. They agree upon criteria for measuring and evaluating . Organisational commitment. 3. and participation. The MBO process MBO as a mutual goal setting exercise is most appropriate for technical.subordinate attain the organisation goals or targets. and executive personnel. personnel.role of a judge and more of the role of one who helps the . Too often MBO is installed top-down in a dictatorial manner with a little or no accompanying training. If properly implemented. and discover new ways to solve problems. tackle new projects. there is generally enough latitude and room for discretion to make it possible for the person to participate in setting his work goals. budget allocation. supervisory.6. Managers are expected to perform so that goals are attained by the organisation. the superior plays less of the . A successful installation of MBO requires written mission statements that are prepared at the highest levels of top management. it serves as a powerful and useful tool for the success of managerial performance. MBO can be applied successfully to an organisation that has sufficient autonomy. MBO is a tool that is inextricably connected with team building so that the work commitment of team . Mission statements provide the coherence in which top-down and bottom-up goal setting appear sensible and compatible. MBO may be viewed as a system of management rather than an appraisal method. In these positions. There is little discretionary opportunity for them to shape their jobs. and policy integrity. In the appraisal process. This method is generally not applied for lower categories of workers because their jobs are usually too restricted in scope. professional. Depending on the current state of mind. Goals should be set by manager-subordinate pairs. Customer feedback method This method is truly one of the modern methods of performance appraisal system. Customer feedback method is used. Lines of responsibility. and also by teams. psychology and perception of the customers may give different feedback for same degree of sales service.members can be increased and their desire to excel in performance can be inspired. . The group of employees or subordinates must be looked upon as a team that needs to be brought together. authority. The basic superior subordinate relationship in an organisation is in no way undermined in this concept of team goal setting. customer feedback is directly linked with employee performance. Some industry experts say placing a higher weightage on customer feedback may fail to motivate employees because customer feedback may vary from customer to customer. It is important to have effective team work among a group of managers or a group of subordinates. Companies like Cognizant and Wipro software solutions are using customer feedback method to assess the performance of their sales staff in order to hike salaries. especially for sales staff who deal with sales activity in the organisation. This method of assessment could be unbiased and reliable since customers who are outsiders may give correct judgement about employee performance than the insiders who are superiors. and accountability remain clear. Under this method of appraisal system.
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