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Individual performance appraisal

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I. Contents of getting individual performance appraisal


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Consulting firm KPMG plans to junk the widely used and much debated bell curve-based
performance appraisal in the next financial year and rate employees on the basis of their
respective business, team and individual performance.
The shift on a pilot basis from April 1, 2015 will help dismantle the artificial barriers
imposed by the bell curve, said Shalini Pillay, head of people, performance and culture at KPMG
in India.
"We want to encourage a collaborative work culture and take away the internal competition
between employees, thus encouraging qualitative discussions on performance," said Pillay,
adding, "We do believe this will help support and drive a high performance culture." KPMG has
about 8,000 employees in India. It hires 2,500-3,000 people a year on average while it loses
about 1,000. In the coming months and years, its recruitment will be mainly in IT and
management consulting, tax, risk consulting and internal audit.
The appraisal system based on normal distribution curve, informally known as a bell curve, has
been a matter of much discussion since it forces a ranking system on the employees. In a large
organisation, the system ranks employees on various performance parameters on a scale of 5
high, strong, medium, average and low performer. HR experts say that although there is nothing
wrong with the philosophy of normal distribution, the way it is implemented leaves much to be
desired.

"The bell curve, the way it is understood and implemented, is wrong sometimes, making it a
forced normalisation and forces rating. It cannot be a rigid curve. It could be a steep curve, flat
curve depending on the business performance," said Pillay.
ET had earlier reported that as the battle for talent has intensified among the big four consultancy
firms, with an improving market throwing up more opportunities to people looking for change,
KPMG has been revisiting its employee engagement policies, performance management and
hiring strategies to shield key people from competition and fill talent gaps.
Amonth ago, Richard Rekhy, CEO of KPMG in India told ET that instead of assigning ratings
based on performance in interim cycles, this year, the company will focus on providing regular
feedback and debriefing to staff for every major assignment.
"It is an experimentation and we may go back to the old system if it doesn't work, but at the
moment we have taken out the rating system (from interim cycle)," Rekhy had said.
The company is also making the bonus slope higher for the high performing employees, paying
them much higher bonus than the rest, in order to make the distinction clearer and retain the best.
"We at KPMG used to adopt the bell curve as a guidance for the distribution of ratings and have
always allowed flexibility to reflect the performance of the business and the differential
performance across teams," said Pillay.
The company will now have a rating system that each business can determine based on its
requirements and individual performance. For instance, if a business believes that it has 35 per
cent of people in the team in the upper bracket instead of the prescribed 20 per cent, then the unit
can go ahead with it, she said, adding that the shift away from bell curve will allow this
flexibility.
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III. Performance appraisal methods

1. Essay Method

In this method the rater writes down the employee


description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.

2. Behaviorally Anchored Rating Scales


statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages helps overcome rating
errors. Disadvantages Suffers from distortions
inherent in most rating techniques.

3. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages Raters biases

4. Checklist method

Under this method, checklist of statements of traits of


employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages economy, ease of administration, limited
training required, standardization. Disadvantages Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings

5.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
Employees are ranked according to their
performance levels.
It is easier to rank the best and the worst
employee.
Limitations of Ranking Method
The whole man is compared with another
whole man in this method. In practice, it is very difficult
to compare individuals possessing various individual
traits.
This method speaks only of the position where an

employee stands in his group. It does not test anything


about how much better or how much worse an employee
is when compared to another employee.
When a large number of employees are working,
ranking of individuals become a difficult issue.
There is no systematic procedure for ranking
individuals in the organization. The ranking system does
not eliminate the possibility of snap judgements.

6. Critical Incidents Method


The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.

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