Download VTU (Visvesvaraya Technological University) MBA 2nd Semester (Second Semester) 17MBA21-Human Resource Management HRM Chapter 5 Important Lecture Notes (MBA Study Material Notes)
Chapter 5
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
The most important objective of any pay system is fairness
or equity, generally expressed in three forms
? Internal equity: where more difficult jobs are paid more
? External equity: where jobs are fairly compensated in
comparison to similar jobs in labour market
? Individual equity: where equal pay is ensured for equal
work
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
The most important objective of any pay system is fairness
or equity, generally expressed in three forms
? Internal equity: where more difficult jobs are paid more
? External equity: where jobs are fairly compensated in
comparison to similar jobs in labour market
? Individual equity: where equal pay is ensured for equal
work
Objectives of compensation planning
? Attract talent
? Retain talent
? Ensure equity
? Reward appropriately(loyalty, commitment, experience,
risk raking and other desired behaviours)
? Control costs
? Comply with legal rules
? Ease of operation
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
The most important objective of any pay system is fairness
or equity, generally expressed in three forms
? Internal equity: where more difficult jobs are paid more
? External equity: where jobs are fairly compensated in
comparison to similar jobs in labour market
? Individual equity: where equal pay is ensured for equal
work
Objectives of compensation planning
? Attract talent
? Retain talent
? Ensure equity
? Reward appropriately(loyalty, commitment, experience,
risk raking and other desired behaviours)
? Control costs
? Comply with legal rules
? Ease of operation
Components of Pay Structure
? The two essential components of pay structure are;
basic wages and dearness allowance .the basic wage rate
is fixed taking the skill needs of the job, experience
needed, difficulty of work, training required,
responsibilities involved and the hazardous nature of the
job. Dearness allowance it paid to employees in order to
compensate them for the occasional or regular rise in the
price of essential commodities.
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
The most important objective of any pay system is fairness
or equity, generally expressed in three forms
? Internal equity: where more difficult jobs are paid more
? External equity: where jobs are fairly compensated in
comparison to similar jobs in labour market
? Individual equity: where equal pay is ensured for equal
work
Objectives of compensation planning
? Attract talent
? Retain talent
? Ensure equity
? Reward appropriately(loyalty, commitment, experience,
risk raking and other desired behaviours)
? Control costs
? Comply with legal rules
? Ease of operation
Components of Pay Structure
? The two essential components of pay structure are;
basic wages and dearness allowance .the basic wage rate
is fixed taking the skill needs of the job, experience
needed, difficulty of work, training required,
responsibilities involved and the hazardous nature of the
job. Dearness allowance it paid to employees in order to
compensate them for the occasional or regular rise in the
price of essential commodities.
Components of pay structure in India
? Under the Workmen's Compensation Act
Wages for leave period, holiday pay, overtime pay, bonus,
attendance bonus and good conduct bonus
? Under the Payment of Wages Act
Retrenchment compensation, payment in lieu of notice ,
gratuity payable on discharge
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
The most important objective of any pay system is fairness
or equity, generally expressed in three forms
? Internal equity: where more difficult jobs are paid more
? External equity: where jobs are fairly compensated in
comparison to similar jobs in labour market
? Individual equity: where equal pay is ensured for equal
work
Objectives of compensation planning
? Attract talent
? Retain talent
? Ensure equity
? Reward appropriately(loyalty, commitment, experience,
risk raking and other desired behaviours)
? Control costs
? Comply with legal rules
? Ease of operation
Components of Pay Structure
? The two essential components of pay structure are;
basic wages and dearness allowance .the basic wage rate
is fixed taking the skill needs of the job, experience
needed, difficulty of work, training required,
responsibilities involved and the hazardous nature of the
job. Dearness allowance it paid to employees in order to
compensate them for the occasional or regular rise in the
price of essential commodities.
Components of pay structure in India
? Under the Workmen's Compensation Act
Wages for leave period, holiday pay, overtime pay, bonus,
attendance bonus and good conduct bonus
? Under the Payment of Wages Act
Retrenchment compensation, payment in lieu of notice ,
gratuity payable on discharge
Components of Pay Structure
? Bonus
? Payments made under a profit sharing scheme
? Value of house accommodation
? Medical allowances
? Travelling allowances
? Any other sum paid to defray special expenses incurred
by the worker
? Contribution to pension, provident fund
? Any amenity or service excluded from the computation of
wages
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
The most important objective of any pay system is fairness
or equity, generally expressed in three forms
? Internal equity: where more difficult jobs are paid more
? External equity: where jobs are fairly compensated in
comparison to similar jobs in labour market
? Individual equity: where equal pay is ensured for equal
work
Objectives of compensation planning
? Attract talent
? Retain talent
? Ensure equity
? Reward appropriately(loyalty, commitment, experience,
risk raking and other desired behaviours)
? Control costs
? Comply with legal rules
? Ease of operation
Components of Pay Structure
? The two essential components of pay structure are;
basic wages and dearness allowance .the basic wage rate
is fixed taking the skill needs of the job, experience
needed, difficulty of work, training required,
responsibilities involved and the hazardous nature of the
job. Dearness allowance it paid to employees in order to
compensate them for the occasional or regular rise in the
price of essential commodities.
Components of pay structure in India
? Under the Workmen's Compensation Act
Wages for leave period, holiday pay, overtime pay, bonus,
attendance bonus and good conduct bonus
? Under the Payment of Wages Act
Retrenchment compensation, payment in lieu of notice ,
gratuity payable on discharge
Components of Pay Structure
? Bonus
? Payments made under a profit sharing scheme
? Value of house accommodation
? Medical allowances
? Travelling allowances
? Any other sum paid to defray special expenses incurred
by the worker
? Contribution to pension, provident fund
? Any amenity or service excluded from the computation of
wages
Wage And Salary Administration
? It is the process of managing a company?s compensation
(base compensation as well as supplementary)
programme Base compensation, here, refers to monetary
payments to employees in the form of wages and salaries.
It is a fixed, non-incentive kind of payment calculated on
the basis of time spent by an employee on the job.
Supplementary compensation signifies incentive payments
based on the actual performance of an employee.
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
The most important objective of any pay system is fairness
or equity, generally expressed in three forms
? Internal equity: where more difficult jobs are paid more
? External equity: where jobs are fairly compensated in
comparison to similar jobs in labour market
? Individual equity: where equal pay is ensured for equal
work
Objectives of compensation planning
? Attract talent
? Retain talent
? Ensure equity
? Reward appropriately(loyalty, commitment, experience,
risk raking and other desired behaviours)
? Control costs
? Comply with legal rules
? Ease of operation
Components of Pay Structure
? The two essential components of pay structure are;
basic wages and dearness allowance .the basic wage rate
is fixed taking the skill needs of the job, experience
needed, difficulty of work, training required,
responsibilities involved and the hazardous nature of the
job. Dearness allowance it paid to employees in order to
compensate them for the occasional or regular rise in the
price of essential commodities.
Components of pay structure in India
? Under the Workmen's Compensation Act
Wages for leave period, holiday pay, overtime pay, bonus,
attendance bonus and good conduct bonus
? Under the Payment of Wages Act
Retrenchment compensation, payment in lieu of notice ,
gratuity payable on discharge
Components of Pay Structure
? Bonus
? Payments made under a profit sharing scheme
? Value of house accommodation
? Medical allowances
? Travelling allowances
? Any other sum paid to defray special expenses incurred
by the worker
? Contribution to pension, provident fund
? Any amenity or service excluded from the computation of
wages
Wage And Salary Administration
? It is the process of managing a company?s compensation
(base compensation as well as supplementary)
programme Base compensation, here, refers to monetary
payments to employees in the form of wages and salaries.
It is a fixed, non-incentive kind of payment calculated on
the basis of time spent by an employee on the job.
Supplementary compensation signifies incentive payments
based on the actual performance of an employee.
v Objectives
v To establish a fair and equitable remuneration
v To attract competent personnel
v To retain present employees
v To control labour cost
v To improve motivation and morale of employees
v To project a good image of the company
v Principles
v Wage and salary plans be sufficiently flexible
v Job evaluation being done scientifically
v Wage and salary plans be always consistent with overall
plansa
v Wage and salary plans being responsive to changing
conditions
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
The most important objective of any pay system is fairness
or equity, generally expressed in three forms
? Internal equity: where more difficult jobs are paid more
? External equity: where jobs are fairly compensated in
comparison to similar jobs in labour market
? Individual equity: where equal pay is ensured for equal
work
Objectives of compensation planning
? Attract talent
? Retain talent
? Ensure equity
? Reward appropriately(loyalty, commitment, experience,
risk raking and other desired behaviours)
? Control costs
? Comply with legal rules
? Ease of operation
Components of Pay Structure
? The two essential components of pay structure are;
basic wages and dearness allowance .the basic wage rate
is fixed taking the skill needs of the job, experience
needed, difficulty of work, training required,
responsibilities involved and the hazardous nature of the
job. Dearness allowance it paid to employees in order to
compensate them for the occasional or regular rise in the
price of essential commodities.
Components of pay structure in India
? Under the Workmen's Compensation Act
Wages for leave period, holiday pay, overtime pay, bonus,
attendance bonus and good conduct bonus
? Under the Payment of Wages Act
Retrenchment compensation, payment in lieu of notice ,
gratuity payable on discharge
Components of Pay Structure
? Bonus
? Payments made under a profit sharing scheme
? Value of house accommodation
? Medical allowances
? Travelling allowances
? Any other sum paid to defray special expenses incurred
by the worker
? Contribution to pension, provident fund
? Any amenity or service excluded from the computation of
wages
Wage And Salary Administration
? It is the process of managing a company?s compensation
(base compensation as well as supplementary)
programme Base compensation, here, refers to monetary
payments to employees in the form of wages and salaries.
It is a fixed, non-incentive kind of payment calculated on
the basis of time spent by an employee on the job.
Supplementary compensation signifies incentive payments
based on the actual performance of an employee.
v Objectives
v To establish a fair and equitable remuneration
v To attract competent personnel
v To retain present employees
v To control labour cost
v To improve motivation and morale of employees
v To project a good image of the company
v Principles
v Wage and salary plans be sufficiently flexible
v Job evaluation being done scientifically
v Wage and salary plans be always consistent with overall
plansa
v Wage and salary plans being responsive to changing
conditions
Factors affecting compensation levels
? Job needs
? Ability to pay
? Cost of living
? Prevailing wage rates
? Unions
? Productivity
? State regulation
? Demand and supply of labour
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
The most important objective of any pay system is fairness
or equity, generally expressed in three forms
? Internal equity: where more difficult jobs are paid more
? External equity: where jobs are fairly compensated in
comparison to similar jobs in labour market
? Individual equity: where equal pay is ensured for equal
work
Objectives of compensation planning
? Attract talent
? Retain talent
? Ensure equity
? Reward appropriately(loyalty, commitment, experience,
risk raking and other desired behaviours)
? Control costs
? Comply with legal rules
? Ease of operation
Components of Pay Structure
? The two essential components of pay structure are;
basic wages and dearness allowance .the basic wage rate
is fixed taking the skill needs of the job, experience
needed, difficulty of work, training required,
responsibilities involved and the hazardous nature of the
job. Dearness allowance it paid to employees in order to
compensate them for the occasional or regular rise in the
price of essential commodities.
Components of pay structure in India
? Under the Workmen's Compensation Act
Wages for leave period, holiday pay, overtime pay, bonus,
attendance bonus and good conduct bonus
? Under the Payment of Wages Act
Retrenchment compensation, payment in lieu of notice ,
gratuity payable on discharge
Components of Pay Structure
? Bonus
? Payments made under a profit sharing scheme
? Value of house accommodation
? Medical allowances
? Travelling allowances
? Any other sum paid to defray special expenses incurred
by the worker
? Contribution to pension, provident fund
? Any amenity or service excluded from the computation of
wages
Wage And Salary Administration
? It is the process of managing a company?s compensation
(base compensation as well as supplementary)
programme Base compensation, here, refers to monetary
payments to employees in the form of wages and salaries.
It is a fixed, non-incentive kind of payment calculated on
the basis of time spent by an employee on the job.
Supplementary compensation signifies incentive payments
based on the actual performance of an employee.
v Objectives
v To establish a fair and equitable remuneration
v To attract competent personnel
v To retain present employees
v To control labour cost
v To improve motivation and morale of employees
v To project a good image of the company
v Principles
v Wage and salary plans be sufficiently flexible
v Job evaluation being done scientifically
v Wage and salary plans be always consistent with overall
plansa
v Wage and salary plans being responsive to changing
conditions
Factors affecting compensation levels
? Job needs
? Ability to pay
? Cost of living
? Prevailing wage rates
? Unions
? Productivity
? State regulation
? Demand and supply of labour
Wage Policy In India
A wage policy offers certain guidelines for determining a wage
structure. The term wage structure refers to various pay scales
showing rages of pay within each grade. Three important
elements of wage policy in India need to be elaborated here
? Minimum wage: Wage sufficient to sustain and preserve the
efficiency of the worker and offer basic amenities of life
? Fair wage: It is above the minimum wage but below the living
wage. It is fixed, taking into account factors such as the
productivity of labour, prevailing wage rates, level of national
income and its distribution, the employer?s capacity to pay etc.
? Living wage: This is the highest amount of wages proposed by
the government, offering basic amenities of life and satisfying
the social needs of worker.
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
The most important objective of any pay system is fairness
or equity, generally expressed in three forms
? Internal equity: where more difficult jobs are paid more
? External equity: where jobs are fairly compensated in
comparison to similar jobs in labour market
? Individual equity: where equal pay is ensured for equal
work
Objectives of compensation planning
? Attract talent
? Retain talent
? Ensure equity
? Reward appropriately(loyalty, commitment, experience,
risk raking and other desired behaviours)
? Control costs
? Comply with legal rules
? Ease of operation
Components of Pay Structure
? The two essential components of pay structure are;
basic wages and dearness allowance .the basic wage rate
is fixed taking the skill needs of the job, experience
needed, difficulty of work, training required,
responsibilities involved and the hazardous nature of the
job. Dearness allowance it paid to employees in order to
compensate them for the occasional or regular rise in the
price of essential commodities.
Components of pay structure in India
? Under the Workmen's Compensation Act
Wages for leave period, holiday pay, overtime pay, bonus,
attendance bonus and good conduct bonus
? Under the Payment of Wages Act
Retrenchment compensation, payment in lieu of notice ,
gratuity payable on discharge
Components of Pay Structure
? Bonus
? Payments made under a profit sharing scheme
? Value of house accommodation
? Medical allowances
? Travelling allowances
? Any other sum paid to defray special expenses incurred
by the worker
? Contribution to pension, provident fund
? Any amenity or service excluded from the computation of
wages
Wage And Salary Administration
? It is the process of managing a company?s compensation
(base compensation as well as supplementary)
programme Base compensation, here, refers to monetary
payments to employees in the form of wages and salaries.
It is a fixed, non-incentive kind of payment calculated on
the basis of time spent by an employee on the job.
Supplementary compensation signifies incentive payments
based on the actual performance of an employee.
v Objectives
v To establish a fair and equitable remuneration
v To attract competent personnel
v To retain present employees
v To control labour cost
v To improve motivation and morale of employees
v To project a good image of the company
v Principles
v Wage and salary plans be sufficiently flexible
v Job evaluation being done scientifically
v Wage and salary plans be always consistent with overall
plansa
v Wage and salary plans being responsive to changing
conditions
Factors affecting compensation levels
? Job needs
? Ability to pay
? Cost of living
? Prevailing wage rates
? Unions
? Productivity
? State regulation
? Demand and supply of labour
Wage Policy In India
A wage policy offers certain guidelines for determining a wage
structure. The term wage structure refers to various pay scales
showing rages of pay within each grade. Three important
elements of wage policy in India need to be elaborated here
? Minimum wage: Wage sufficient to sustain and preserve the
efficiency of the worker and offer basic amenities of life
? Fair wage: It is above the minimum wage but below the living
wage. It is fixed, taking into account factors such as the
productivity of labour, prevailing wage rates, level of national
income and its distribution, the employer?s capacity to pay etc.
? Living wage: This is the highest amount of wages proposed by
the government, offering basic amenities of life and satisfying
the social needs of worker.
Executive compensation: Private sector vs.
Public sector
? In a well publicised front page news sometime back The Economic
Times mentioned about the miserable salary levels of top executives
in public sector units in India. For example the State Bank of India
chief is paid 10% of HDFC Bank Managing Director, BHEL's chief
getting about Rs.10 to 12 lakhs per year as against ABB's MD getting
nearly Rs.40 to 50 lakhs; Indian Oil Corporation's chief getting Rs.10
to 15 lakhs per annum as against Reliance Industries' Ambanis
getting a package of over Rs.10 crore per annum. Salary levels in
'hot' private sector such as BPO, hospitality, biotechnology 'Media',
IT, Telecommunications, Oil, Automobiles and Insurance are way
above the packages offered to executives in public sector for various
reasons such as: overstaffing, inefficient processes, pressure on
margins due to competition, appointment of people without
requisite skills at the top level, political interference especially in
pricing the products or services, legal constraints etc.
FirstRanker.com - FirstRanker's Choice
Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
The most important objective of any pay system is fairness
or equity, generally expressed in three forms
? Internal equity: where more difficult jobs are paid more
? External equity: where jobs are fairly compensated in
comparison to similar jobs in labour market
? Individual equity: where equal pay is ensured for equal
work
Objectives of compensation planning
? Attract talent
? Retain talent
? Ensure equity
? Reward appropriately(loyalty, commitment, experience,
risk raking and other desired behaviours)
? Control costs
? Comply with legal rules
? Ease of operation
Components of Pay Structure
? The two essential components of pay structure are;
basic wages and dearness allowance .the basic wage rate
is fixed taking the skill needs of the job, experience
needed, difficulty of work, training required,
responsibilities involved and the hazardous nature of the
job. Dearness allowance it paid to employees in order to
compensate them for the occasional or regular rise in the
price of essential commodities.
Components of pay structure in India
? Under the Workmen's Compensation Act
Wages for leave period, holiday pay, overtime pay, bonus,
attendance bonus and good conduct bonus
? Under the Payment of Wages Act
Retrenchment compensation, payment in lieu of notice ,
gratuity payable on discharge
Components of Pay Structure
? Bonus
? Payments made under a profit sharing scheme
? Value of house accommodation
? Medical allowances
? Travelling allowances
? Any other sum paid to defray special expenses incurred
by the worker
? Contribution to pension, provident fund
? Any amenity or service excluded from the computation of
wages
Wage And Salary Administration
? It is the process of managing a company?s compensation
(base compensation as well as supplementary)
programme Base compensation, here, refers to monetary
payments to employees in the form of wages and salaries.
It is a fixed, non-incentive kind of payment calculated on
the basis of time spent by an employee on the job.
Supplementary compensation signifies incentive payments
based on the actual performance of an employee.
v Objectives
v To establish a fair and equitable remuneration
v To attract competent personnel
v To retain present employees
v To control labour cost
v To improve motivation and morale of employees
v To project a good image of the company
v Principles
v Wage and salary plans be sufficiently flexible
v Job evaluation being done scientifically
v Wage and salary plans be always consistent with overall
plansa
v Wage and salary plans being responsive to changing
conditions
Factors affecting compensation levels
? Job needs
? Ability to pay
? Cost of living
? Prevailing wage rates
? Unions
? Productivity
? State regulation
? Demand and supply of labour
Wage Policy In India
A wage policy offers certain guidelines for determining a wage
structure. The term wage structure refers to various pay scales
showing rages of pay within each grade. Three important
elements of wage policy in India need to be elaborated here
? Minimum wage: Wage sufficient to sustain and preserve the
efficiency of the worker and offer basic amenities of life
? Fair wage: It is above the minimum wage but below the living
wage. It is fixed, taking into account factors such as the
productivity of labour, prevailing wage rates, level of national
income and its distribution, the employer?s capacity to pay etc.
? Living wage: This is the highest amount of wages proposed by
the government, offering basic amenities of life and satisfying
the social needs of worker.
Executive compensation: Private sector vs.
Public sector
? In a well publicised front page news sometime back The Economic
Times mentioned about the miserable salary levels of top executives
in public sector units in India. For example the State Bank of India
chief is paid 10% of HDFC Bank Managing Director, BHEL's chief
getting about Rs.10 to 12 lakhs per year as against ABB's MD getting
nearly Rs.40 to 50 lakhs; Indian Oil Corporation's chief getting Rs.10
to 15 lakhs per annum as against Reliance Industries' Ambanis
getting a package of over Rs.10 crore per annum. Salary levels in
'hot' private sector such as BPO, hospitality, biotechnology 'Media',
IT, Telecommunications, Oil, Automobiles and Insurance are way
above the packages offered to executives in public sector for various
reasons such as: overstaffing, inefficient processes, pressure on
margins due to competition, appointment of people without
requisite skills at the top level, political interference especially in
pricing the products or services, legal constraints etc.
Managerial Compensation In India
Executive compensation is built around three factors in India
v Job complexity
v Employers? ability to pay
v Managerial productivity
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Performance Appraisal
Chapter 5
? Performance appraisal is a systematic and objective way of
evaluating both work related behaviour and potential of
employees.
Features of performance appraisal
? It is a systematic process, essentially involving three steps: set
work standards, assess employee's performance relative
to these standards, and offer feedback to the employee so
that he or she can eliminate deficiencies and improve
performance
? The appraisal is carried out periodically according to a definite
plan
? It is not a past oriented activity. The intention is not to put
poor performers in a spot. Instead, it shows employees
where things have gone wrong, how to set things in
order and deliver superior performance using their potential
fully
? The focus of appraisals is on employee growth and
development. It forces managers to be coaches rather than
judges.
Objectives
? Compensation decisions
? Promotion decisions
? Training and development programmes
? Feedback to the employee
? Personal growth and development
Benefits of performance appraisal
Employer perspective [Administrative uses]
? Despite imperfect measurement techniques, individual differences in
performance can make a difference to company performance.
? Documentation of performance appraisal and feedback may be
required for legal defence.
? Appraisal offers a rational basis for constructing a bonus or merit
system.
? Appraisal dimensions and standards can help to implement strategic
goals and clarify performance expectations.
Employee perspective [developmental purposes]
? Individual feedback helps people to rectify their mistakes and get
ahead, focusing more on their unique strengths.
? Assessment and reorganisation of performance levels can motivate
employees to improve their performance.
The Performance Appraisal Process
? Establish performance standards
These are benchmarks against which performance is measured.
They should relate to the desired results of each job
They must be clear to both the appraiser and the appraisee.
Good performance goals should speak about
v What is the task to be accomplished?
v What will it look like when it is accomplished?
v When must it be completed?
v What are the cost considerations?
v What are the likely payoffs to the employee?
? Communicate the standards
? The Appraiser should prepare job descriptions clearly
v Help the appraisee set own goals and targets
v Analyse results objectively
v Offer coaching and guidance
? The Appraisee should be clear about what he is doing and why he is doing
? Measure actual performance
? Use reliable and dependable performance measures
? These must be easy to use and report on critical behaviours that determine
performance
? These would generally include: personal observation, statistical reports, oral
reports and written reports
? These may be objective or subjective
? Objective measures are generally quantitative, and include quality of
production, degree of training needed, accidents in a given period,
absenteeism, length of service etc. Such measures are used for evaluating
lower level jobs
? Subjective measures are based on opinions of those doing evaluation and
are not verifiable by others; generally used for evaluating middle level
positions
? Compare actual performance with standards
and discuss the appraisal
Not an easy job
Emotional factors to be taken into account
Affects the self esteem of the appraisee
Criteria likely to be questioned, if the appraisal turns
out to be negative
? Take corrective action, if necessary
Put out the fires
Set things in order
Arrive at new goals for achieving superior performance.
Essential Characteristic of an Effective Appraisal
System.
? Clear Objectives
? Reliable and Valid
? Standardisation
? Training
? Fob Relatedness
? Mutual Trust
? Feedback and Participation
? Help Focus
? Recognition of Differences
Methods of Performance Appraisal
Past-oriented methods
? Rating scale
? Confidential report
? Essay evaluation
? Critical incident method
? Checklists
? Forced choice method
? Behaviourally anchored rating scale
? Ranking
Past-oriented Methods Contd.
? Paired comparison method
? Forced distribution method
? Field review technique
Future-oriented Methods
? Management by objective
? 360o Feedback Method
? Psychological Appraisals
? Assessment Centre
? Rating scale: The rating scale consist of several numerical
scales, each representing a job related performance criterion
such as dependability, initiative, output, attendance,
attitude, co-operation and the like
? Confidential Report-
? Prepared by the employee?s immediate supervisor
? The report highlights the strengths and weaknesses of employees
? Prepared in Government organizations
? Does not offer any feedback to the employee
Essay Evaluation Method
? The rater is asked to express the strong as well as weak points of
employee?s behavior
The rater considers the employee?s :
? Job knowledge and potential
? Understanding of company?s programs, policies, objectives etc
? Relation with co-workers and supervisors
? Planning, organizing and controlling ability
? Attitude and perception
Critical Incident Technique
? Manager prepares lists of statements of very effective and
ineffective behavior of an employee
? These critical incidents represent the outstanding or poor
behavior of the employees
? The manager periodically records critical incidents of
employee?s behavior
Checklist
? Checklist contains a list of statements on the basis of
which the rater describes the on job performance of the
employees
? Example:
? Is employee regular Y/N
? Is employee respected by subordinate Y/N
? Is employee helpful Y/N
? Does he follow instruction Y/N
? Does he keep the equipment in order Y/N
Behaviorally Anchored Rating Scale
? BARS represent a range of descriptive statements of
behavior varying from the least to the most effective
? In this a rater is expected to indicate which behavior on
each scale best describes an employee?s performance
Forced Choice Method
? In the forced choice method the rater is forced to select statements
which are readymade
? The rater is asked to indicate which of the phrases is the most and least
descriptive of a particular worker
? Favorable qualities earn plus credit and unfavorable ones earn the
reverse
Paired comparison method
? For several traits paired comparisons are made, tabulated
and then rank is assigned to each worker
? No. of comparisons is calculated by the formula: N(N-
1)/2
? This method is not applicable when the group is large
?
Ranking method
? The evaluator rates the employee from highest to lowest on some
overall criteria. In this ?how? and ?why? are not questioned nor
answered
? Employee Rank
? A 2
? B 1
? C 3
? D 5
? E 4
Field Review Method
? The appraiser goes to the field and obtains the
information about work performance of the employee by
way of questioning the said individual, his peer group, and
his superiors
Management by Objectives (MBO)
? First step: MBO emphasizes collectively set goals that are
tangible, verifiable, and measurable
? Second step: setting the performance standard for the
subordinates
? Third step: the actual level of goal attainment is compared
with the goals agreed upon
? Final step: involves establishing new goals and possibly
new strategies for goals not previously achieved
360o Feedback Method
? It is a systematic collection and feedback of performance
data on an individual or group, derived from a number of
stakeholders
? Data is gathered and fed back to the individual participant
in a clear way designed to promote understanding,
acceptance and ultimately behavior
? It makes the employee feel much more accountable
Psychological Appraisals
? It focuses on the future potential of an employee
? past performance or the actual performance is not taken
into consideration
? Evaluation is based on employee?s intellectual, emotional,
motivational and other related characteristics
Assessment Centres
? An assessment centre is a central location where
managers may come together to have their participation
in job-related exercises evaluated by trained observers
COMPENSATION ADMINISTRATION
? Compensation is what employees receive in exchange for
their contribution to the organization. Generally speaking,
employees offer their services for three types of rewards
? ??????? Base pay
? ??????? Variable pay
? ??????? Benefits
The most important objective of any pay system is fairness
or equity, generally expressed in three forms
? Internal equity: where more difficult jobs are paid more
? External equity: where jobs are fairly compensated in
comparison to similar jobs in labour market
? Individual equity: where equal pay is ensured for equal
work
Objectives of compensation planning
? Attract talent
? Retain talent
? Ensure equity
? Reward appropriately(loyalty, commitment, experience,
risk raking and other desired behaviours)
? Control costs
? Comply with legal rules
? Ease of operation
Components of Pay Structure
? The two essential components of pay structure are;
basic wages and dearness allowance .the basic wage rate
is fixed taking the skill needs of the job, experience
needed, difficulty of work, training required,
responsibilities involved and the hazardous nature of the
job. Dearness allowance it paid to employees in order to
compensate them for the occasional or regular rise in the
price of essential commodities.
Components of pay structure in India
? Under the Workmen's Compensation Act
Wages for leave period, holiday pay, overtime pay, bonus,
attendance bonus and good conduct bonus
? Under the Payment of Wages Act
Retrenchment compensation, payment in lieu of notice ,
gratuity payable on discharge
Components of Pay Structure
? Bonus
? Payments made under a profit sharing scheme
? Value of house accommodation
? Medical allowances
? Travelling allowances
? Any other sum paid to defray special expenses incurred
by the worker
? Contribution to pension, provident fund
? Any amenity or service excluded from the computation of
wages
Wage And Salary Administration
? It is the process of managing a company?s compensation
(base compensation as well as supplementary)
programme Base compensation, here, refers to monetary
payments to employees in the form of wages and salaries.
It is a fixed, non-incentive kind of payment calculated on
the basis of time spent by an employee on the job.
Supplementary compensation signifies incentive payments
based on the actual performance of an employee.
v Objectives
v To establish a fair and equitable remuneration
v To attract competent personnel
v To retain present employees
v To control labour cost
v To improve motivation and morale of employees
v To project a good image of the company
v Principles
v Wage and salary plans be sufficiently flexible
v Job evaluation being done scientifically
v Wage and salary plans be always consistent with overall
plansa
v Wage and salary plans being responsive to changing
conditions
Factors affecting compensation levels
? Job needs
? Ability to pay
? Cost of living
? Prevailing wage rates
? Unions
? Productivity
? State regulation
? Demand and supply of labour
Wage Policy In India
A wage policy offers certain guidelines for determining a wage
structure. The term wage structure refers to various pay scales
showing rages of pay within each grade. Three important
elements of wage policy in India need to be elaborated here
? Minimum wage: Wage sufficient to sustain and preserve the
efficiency of the worker and offer basic amenities of life
? Fair wage: It is above the minimum wage but below the living
wage. It is fixed, taking into account factors such as the
productivity of labour, prevailing wage rates, level of national
income and its distribution, the employer?s capacity to pay etc.
? Living wage: This is the highest amount of wages proposed by
the government, offering basic amenities of life and satisfying
the social needs of worker.
Executive compensation: Private sector vs.
Public sector
? In a well publicised front page news sometime back The Economic
Times mentioned about the miserable salary levels of top executives
in public sector units in India. For example the State Bank of India
chief is paid 10% of HDFC Bank Managing Director, BHEL's chief
getting about Rs.10 to 12 lakhs per year as against ABB's MD getting
nearly Rs.40 to 50 lakhs; Indian Oil Corporation's chief getting Rs.10
to 15 lakhs per annum as against Reliance Industries' Ambanis
getting a package of over Rs.10 crore per annum. Salary levels in
'hot' private sector such as BPO, hospitality, biotechnology 'Media',
IT, Telecommunications, Oil, Automobiles and Insurance are way
above the packages offered to executives in public sector for various
reasons such as: overstaffing, inefficient processes, pressure on
margins due to competition, appointment of people without
requisite skills at the top level, political interference especially in
pricing the products or services, legal constraints etc.
Managerial Compensation In India
Executive compensation is built around three factors in India
v Job complexity
v Employers? ability to pay
v Managerial productivity
How to retain talent?
? Improving communication
? Changing work rules
? Increasing pay and incentives
? Ego massaging services
? Non-poaching agreements
? Opportunities to upgrade skills and knowledge
? Offering jobs with stretch, pull and challenge
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This post was last modified on 18 February 2020