HUMAN RESOURCE MANAGEMENT

PRESENTED BY M.BHARATHI

Introduction to Performance appraisal Meaning and definition of Performance appraisal Features of Performance appraisal Objectives of Performance appraisal Benefits and uses of Performance appraisal Limitations of Performance appraisal

Process and methods of Performance appraisal

Essentials of an effective Performance appraisal system conclusion

Once an employee is selected and trained for a job then management would like to se how he performs his work.
it helps in evaluating the performance of employees and in assessing the hiring and training methods followed in and organization. The employees are recruited with some objectives in mind, whether these have been achieved or not has to be regularly evaluated. Merit rating is a 'process of evaluation an employee's performance of a job in terms of its requirements' The rating of a man by another man is as old as mankind, but formal merit rating systems are of relatively recent origin. Merit rating is also termed as Performance Appraisal or Employee Appraisal.

Performance appraisal is the process of measuring quantitatively and qualitatively and employee's past or present performance against the background of his expected role performance, the background of his work environment, and about his future potential for an organization. The evaluation of the performance and personality of each employee is done by his immediate superior or some other person trained in the techniques of merit rating. Various rating techniques are employed for comparing individual employees in a group in terms of personal qualities or deficiencies and the requirements of their respective jobs.

According to Edward Flippo "Performance appraisal is the systematic, periodic and an impartial rating of an employees excellence in matters pertaining to his present job and his potential for a better job." According to Dale Yoder performance appraisal includes all formal procedures used to evaluate personalities and contributions and potentials of group members in a working organization. Is a continuous process to secure information necessary for making correct and objective decisions on employees?"

According to Randall S. Schuler "Performance appraisal is a formal, structured system of measuring and evaluating an employee's job related behavior and outcomes to discover how and why the employees is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organization and society will benefit.
According to Dale S. Beach "Performance appraisal is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential of development.

According to C. Heigal "Performance appraisal is the process of evaluating the performance and qualifications of the employees in terms of the requirements of the job for which he is employed for purposes of administration including placement, selection for promotion, providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally.

The main characteristics of performance appraisal are as follows:

Performance appraisal is a systematic process consisting of a number of steps to be followed for evaluating an employee's strengths and weaknesses. It is a systematic and objective description of an employee's strengths and weaknesses. The appraisal is an ongoing and continuous process where the evaluations are arranged periodically according to a definite plan. It is not a one shot deal. The performance appraisal seeks to secure information necessary for making objective and correct decisions on employees. Performance appraisal may be formal or informal. The formal system is fairer and objective since it is carried out in a systematic manner using printed appraisal forms.

Performance appraisal can be carried out with various objectives in mind and these objectives can be classified under the following four heads: (a) Work- Related Objectives
To

assess the work of employees in relation to job requirements To improve efficiency To help management in fixing employees according to their capacity, interest, aptitude and qualifications To carry out job evaluation

(b) Career Development Objectives

To

assess the strong and weak points in the working of the employees and finding remedies for weak points through training To determine career potential To plan promotions, transfers, lay offs etc. of the employees To plan career goals

(c) Communication

To provide feedback to employees so that they come to know where they stand and can improve their job performance To clearly establish goals i.e. what is expected of the employee in terms of performance and future work assignments To provide coaching, counseling, career planning and motivation to employees To develop positive superior-subordinate relations and thereby reduce grievances.

(d) Organizational Objectives

To To

serve as a basis of promotion or demotion serve as a basis for wage and salary administration and considering pay increases and increments To serve as a basis for planning suitable training and development programmes To serve as a basis for transfer or termination in case of reduction in staff strength.

An effective system of Performance appraisal helps the supervisor to evaluate the performance of his employees systematically and periodically, it helps in the placement of the employees on the jobs for which they are best suited. The results of performance appraisal may be used by the supervisor in constructively guiding the employees in the efficient performance of their jobs. Performance appraisal provides the management an objective basis for discussing salary increases and special increments of the staff. Performance appraisal can be used for transfer and promotion of employees, if the performance of an employee is better than others, he can be recommended for promotion, but if he is not doing well, he may be transferred to some other job for which he is best Performance appraisal facilitates human resource planning, career planningabnd succession planning

Hallo error:

The hallo error or effect is a tendency to evaluate a person on the basis of one trait of characteristic. The appraiser judges a person on the strength of a specific trait and does not base his inference on his overall various traits depending upon the rater's overall judgment of the person. If the rater is friendly to a worker, he may consistently rate him outstanding; on the other hand if a person is unfriendly then he may be rated below average even if his performance on the job is very good. Hallo effect may be controlled if the rater is given a list of characteristics and is asked to evaluate persons characteristic-wise.

Central Tendency:

It is the most commonly found error in merit rating. This error arises when the rater is not sure about the performance of a person, may not be well conversant with his work or may have less time at his disposal. He will like to play safe in evaluating persons and will rate them as average. Neither he will rate them having poor performance not he will rate them outstanding. The rater follows a via media and gives mediocre reports to the subordinates about whom he does not want to commit. This type of tendency on the part of evaluators distorts the evaluation, making them most useless for promotion, salary or counseling purposes.

Leniency or strictness:

The evaluators have their own value system which acts as a standard for evaluation. Some evaluators may be lenient and will give high rating to everyone. On the other hand, an evaluator may be strict and will give low ratings to all persons. The tendency of giving high rating is known as positive leniency error and the tendency of giving low ratings is called negative leniency error. Both the trends can arise from varying standards of performance observed by supervisors and from different interpretations of what they observe in employee performance. The raters should be trained for evaluation purpose and be told of what is expected from ratings.

Similarity Error:

This error arises from the mental make up of an evaluator. The evaluator uses his own trait as a basis for assessing the employees. If the rater is aggressive then he will try to find this trait in subordinates. Those who have this trait will be rated high and those who do not have it will be rated low. This error can be washed out if the same rater appraises all employees in the organization.

Miscellaneous Biases:

Bias may exist on the ground of sex, race, religion, position, etc. The persons on higher positions may be given higher ratings. A rater may also give high ratings to his group because persons in other groups may not ger higher pay rises than his subordinates. A rater may have preference for persons belonging to his own sex, race, religion, etc

Faulty Assumptions:

There are faulty assumptions about the performance appraisal system both by the superiors and subordinates. These assumptions work against the effectiveness of this system. The assumptions are:

The assumption that superiors will make impartial assumption of subordinates is not practical. Both show tendency to avoid appraisal processes. It is assumed that appraisal system once implemented properly will be utilized in every project. This is too much of expectation from the system. Superiors sometimes feel that their personal judgment of the subordinates is better than that of appraisal system. The thinking that employees want to know about their appraisal is not correct. In fact employees try to avoid appraisal system.

Psychological Blocks:

The utility of appraisal system will depend upon the skills of the users. This system will depend upon the psychological characteristic of managers, no matter what method is being used. There are many psychological blocks working against this system. Managers consider appraisal as an extra burden, they try to treat subordinates' failure as their own, dislike to communicate unfavorable reports to subordinates. Because of these psychological blocks managers do not tend to become impartial or objective in evaluating the subordinates.

PERFORMANCE APPRAISAL PROCESS

Establishing Standards

Communicating Standards to Employees

Measuring Actual Performance Comparing Actual with Standards Discussing Reports with Employees Taking Corrective Action

Two types of methods

Traditional method Modern method

Traditional methods

Confidential report Graphic scales Straight ranking Paired comparisons Grading system Forced distribution Check list method Critical incident method Free essay method Group appraisal Field review Nominations Work sample tests

Modern methods Assessment centre Human resource accounting Behaviorally anchored rating scales Management by objectives 360 degree performance appraisal

Appraisal system to be effective must fulfill the following essentials:

Mutual trust and confidence: Reliability: Validity: Specific objectives: Standardization: Training to appraisers: Job relatedness:

Performance appraisal plays a vital role to enhance the efficiency of employees and it helps to improve the performance of employees.