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Performance Appraisal
Chapter- 10
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Definition
Performance appraisal can be defined
as the process of evaluating theperformance of an employee andcommunicating the results of theevaluation to him for the purpose of
rewarding or developing the employees.
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Objectives
Setting targets and goals as
performance standards Evaluating employee performance
Identifying training and development
needs Rewarding performance
Improving performance
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The process
Determination of standards or
performance based on theorganizational objectives and the jobdescription.
Measurement of performance againstthe pre-determined goals andstandards.
Matching the performance with the
standards
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The appraisers
Self appraisal
Supervisors Peers
Customers
Subordinates
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Performance Appraisals
Method
Traditional method
Modern Method
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Traditional Method Management by Objective
Graphic Rating Scale Work standards approach
Essay appraisal
Critical incident method
Forced choice rating method
Ranking method
Checklist
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Critical Incident methodEx: A fire, sudden breakdown, accident
Workers reaction scale
A informed the supervisor immediately 5
B Become anxious on loss of output 4
C tried to repair the machine 3
D Complained for poor maintenance 2
E was happy to forced test 1
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Checklist method
Simple checklist method
Weighted checklist method
Forced choice method
Simple checklist method:Is employee regular Y/N
Is employee respected by subordinate Y/NIs employee helpful Y/N
Does he follow instruction Y/N
Does he keep the equipment in order Y/N
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Weighted checklistmethod
weights performance rating
(scale 1 to 5 )
Regularity 0.5
Loyalty 1.5
Willing to help 1.5
Quality of work 1.5
Relationship 2.0
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Forced choicemethod
Criteria Rating
1.Regularity on the job Most Least
Always regular
Inform in advance for delay
Never regular
Remain absentNeither regular nor irregular
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Graphic Rating Scale Continuous Rating Scale
Discontinuous Rating Scale
Employee name_________ Deptt_______
Raters name ___________ Date________ ------------------------------------------------------------------------
Exc. Good Acceptable Fair Poor
5 4 3 2 1 _
Dependability
InitiativeOverall output
Attendance
Attitude
Cooperation
Total score Continuous Rating Scale
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Discontinuous Rating Scale
Attitude
No
Interest
Indifferent
Interested
Enthusiastic
Very
enthusiastic
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BARS( behaviorally Anchored
rating scale)
BARS are said to be behaviorallyanchored as the scales represent arange of descriptive statements of behavior varying from the least to themost effective.
A rater is expected to indicate whichbehavior on each scale best descries anemployees performance.
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MBO Process
Set organizational goals
Defining performance target Performance review
feedback
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Group Appraisal
Ranking Paired comparison
Forced distribution
Performance tests Field reviewtechnique
Performance Appraisal
Methods
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Ranking method
Employee Rank
A 2
B 1
C 3
D 5
E 4
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Paired comparisonmethod
A B C D E Final Rank
A - - - + + 3
B + - - + + 2
C + + - + + 1
D - - - - + 4
E - - - - - 5
No of Positive evaluation
Total no. of evaluation * 100 = employee superior evaluation
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Forced Distribution method
10% 20% 40% 20% 10%
poor Below
average
average good Excellent
No.
of
employees
Force distribution curve
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Field review methodPerformance subordinate peers superior customer
Dimension
Leadership ^ ^
Communication ^ ^
Interpersonal skills ^ ^
Decision making ^ ^ ^
Technical skills ^ ^ ^
Motivation ^ ^ ^
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Balance ScorecardThe two basic features of the balanced
scorecard are:
A balanced set of measures based on. thefour perspectives of balanced scorecard
Linking the measures to EmployeePerformance
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The four Perspectives recommended by Kaplan and Norton
for the managers to collect information are:
The financial measures The financial measures includethe results like profits, increase in the market share,return on investments and other economic measures as
a result of the actions taken. The customers measures - These measures help to geton customer satisfaction, the customers perspectiveabout the organization, customer loyalty, acquiring newcustomers. The data can be collected from the frequencyand number of customer complaints, the time taken to
deliver the products and services, improvement inquality etc.
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The internal business measures These are the measuresrelated to the organizations internal processes which help toachieve the customer satisfaction. It includes the infrastructure,
the long term and short term goals and objectives,organizational processes and procedures, systems and thehuman resources.
The innovation and learning perspective. The innovation andlearning measures cover the organization's ability to learn,
innovate and improve. They can be judged by employee skillsmatrix, key competencies, value added and the revenue peremployee.
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360 degree feedback
The 360 degree technique is
understood as systematic collection ofperformance data on an individual orgroup, derived from a number of stakeholder- the stakeholder being the
immediate supervisor, team members,customer, peers, and self.
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Common Rating Errors Halo Effect
A person outstanding in one area tends to
receive outstanding or better than averageratings in other areas as well, even whensuch a rating is undeserved
Negative Effect
A low rating in one area yields lower thandeserved ratings for other accomplishments Central Tendency
Assigning an average rating for all qualities
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Confrontation Avoidance
Discomfort with giving negative feedback
Initial Performance
Rating an employee based solely on initialimpressions of performance
RecencyRating an employee based solely on mostrecent performance which overshadows theentire years performance
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