Performance Appraisal & Retention Strategies (M-410) MBA IV Sem Unit 1 Manali Pareek PMRS (M-410)

Syllabus of Unit 1
Performance Appraisal A Conceptual Framework, Concept & Definitions of performance appraisal, Objectives of performance appraisal: Process of performance appraisal, Performance Appraisal vs Performance Management System, Concept of performance management, Process & elements 0f performance management.

Concept of performance appraisal

Performance appraisal is central part of performance management . Organization attempt to measure several aspect of their work activities through various means and indicator of employee performance .It relate with productivity, effectiveness , quality and timeliness. Basically performance indicate what expected to be delivered by an individual or a set of individual within a time frame. It is continuous process of measuring qualitatively and quantitatively performance of employees .

Meaning
Performance appraisal is the assessment of an employees job performance . It comprises the steps of observing and assessing employee performance recording the assessment and providing feedback to the employees .

Definition
According to Edwin B Floppy, 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 Armstrong Performance appraisal can be defined as the formal assessment and rating of individual by their managers at usually and annual review meeting

Objective of performance appraisal

Administrative Performance appraisal provides managers with the information they need to make salary , promotion and dismissal decision. Developmental Information gathered in the appraisal can be used to identify and plan the additional training , learning or other improvement employee requires . Motivation It can encourage initiative, develop a sense of responsibility and stimulate efforts to perform better .

Communication It can serve as a basis for on going disucssion between superior and subordinate about job related matters Human resource planning Appraisal include valuable input to skills inventories and human resource planning . Legal compliance It can serve as legal compliance for promotion, transfer , rewards and discharges. Performance appraisal helpful in evaluate the result of training programmes .

It helps the subordinate supervisor counselling relationship. It help to evaluate HR policies and programmes . It help in assessing the abiltiy of the individual to make the best use of employee talent in the present job. It helpful to find out area of weakness.

Nature of performance appraisal

Performance appraisal is a process consisting of a series of steps. It is the assessment of employee strength and weaknesses in terms of jobs . It is a scientific or objective study. It tries to find out how well employee performing the job and tries to establish further improvement. It is carried out periodically according to definate plan. It focus on quantified objectives. It is result oriented as well as potential oriented .

Importance

Work for better Human resource planning Enhancing employee performance It contribute to productivity Determining training need . It work for produces better supervision Proper validation of HR programmes Work for employee grievances reduced. Helpful in various decision such as recuritment , promotion, transfer, demotion, termination, succession planning etc. Improve communication between managers and employees .

Benefits of performance appraisal

Improve the work performance by enhancing the productivity of an employee. Identification of those who need some type of support to improve and increase their work performance . Compensation according to achievement Placement of employees according to their knowledge ,skill and ability . Reduction or elimination of grievances .

Process of performance appraisal

Determine appraisal objective Choose appraisal technique

Determine appraisers

Train managers and employees

Finalize ratings Prepare MIS

Determine appraisal objectives Performance appraisal begins with determination of objective the appraisal system seeks to achieve for the organization . It focus on assessing performance of employees for affecting career progression, transfer, awarding , compensation revision etc.
Choose appraisal technique Choose appropriate performance appraisal technique like in traditional technique Ranking method, Forced choice method, essay method, Group appraisal method, confidential report etc .

Modern Method Behavourally rating method ,Behavioural observation scale method, Assessment centers , Appraisal through MBO, 360 degree appraisal method etc

Determine AppraisersAppraises play a pivotal role in success and credibility of any performance appraisal system. Appraiser can motivate higher commitment to the system by making fair and accurate judgement and instilling a sense of confidence in the employees .

Train managers and employees organization need to train comprehensively the managers and appraisers and employees as appraisees in the tools , technique , system and instrument of performance appraisal .This depend on type of technique, training design and delivery . Distribute forms Distribue the necessary form to manager and employees for recording their observation, comments and remarks towards administering performace appraisal . It also suggest training and developmental inputs . It provide performance review .

Finalize ratings the managers evaluate the performance of employees and assign ranking or score. Communicate ratingsThe finding score or rating of employees reviewing officer consolidate to employees . Prepare MIS HR department after reviewing the entire performance of all work unit consolidates in the form of MIS (Management information system ) for the purpose of enabling top management to take HR decision.

Performance appraisal process

Setting performance standards Communicating Standards Measuring Performance Comparing with standards Discussing results

Taking corrective action

Methods of Performance Appraisal

Past Oriented Methods Essay appraisal Method Graphic rating scale appraisal Field Review appraisal Forced choice rating approach Critical incident approach Work standards approach Ranking method approach

Future Oriented Method Management By Objective appraisal Assessment centers method Behaviorally Anchored Rating scale 360 degree appraisal Balanced Scored

Past Oriented Methods -Essay Appraisal Methods In this technique manager rates the employees in an open ended manner and uses a free form in his own words and put down his impression about the employees on a continuous basis. Manager note some factors Job knowledge, Skills , Employee relationship, Employees understanding , responsibility, Attitude towards jobs .

Graphic Rating Scale Appraisal In this graphic scale assesses an employee on a rating scale comprising lists of qualities and range of performance . Rating scale could be continuous ways like (1,2,3,4,5)scale . Rating qualities base on Job knowledge , Ability to complete work in time , Proficiency in utilization of material, Punctuality, Self discipline, Leadership, Ability to learn higher skills
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Field Review Appraisal In this method a member of HR department interviews line managers to evaluate their respective employees .And note down the performance of each employees . Forced Choice Rating Appraisal This technique was developed to reduce bias and establish objective standards of comparison between individual. This use many scale like Exceptional performance, Very good performance, Average performance, Satisfactory and poor performance

Critical Incident Appraisal

This method prove to be traumatic experience for managers . It forced to hold employees . In this actual and factual incidents discuss with an employee. Method involve general duty, target etc. -Word Standard Approach This technique establish work and employee targets aimed at improving productivity. In this good deal of time is spent observing employees on the job , simplifying and improving the job by providing standard output.

-Ranking Methods Appraisal

In this method employees are ranked form exceptional to poor performance on a characteristic for evaluating employees .This method use for comparative purpose particularly when employee on different statement , ratings or appraisal but it involve overall judgment .

Future Oriented Method

Management by objective This method of performance appraisal introduced by Drucker. In this method manager jointly with the employees determines specific measurable goals or targets . Depending on the performance , goals or targets are redesigned or modified for next appraisal cycle. This process useOrganization planed goal, Departmental jointly goals, short term performance targets ,Feedback criteria base etc.

Assessment Centers This consists of standardized evaluation of behaviour based on multiple inputs. Assessment comprise a number of exercise which have been designed to replicate the tasks or demands of the jobs which a candidate is being considered.

Behaviourally Anchored Rating Scale This using specific behaviour point each of which reflects a different degree of performance effectiveness. BARS use -Effective and ineffective job behaviour are identified to describe performance. - These incidents are clustered into smaller set of performance dimensions. - Job experts relocate the original critical incidents. - Subset of the incidents in used as behavioural anchors for each dimension.

360 degree appraisal This appraisal method focus on teamwork , employee development and customer service the emphasis has shifted to employee feedback from the full circle of source. Appraisal base on (Superior, subordinate, internal customer, external customer , peer group etc.)

Balanced Scorecard BSC is management system that enables organizations to enhance the clarity of their vision and strategy and enable them to translate the task in action. Like Financial , customer , Internal processes , Learning and growth etc.

Performance Management
Concept Performance management is a system used by an organization to achieve its objectives to utilization human capital optimally. This is ongoing function of operationalize the strategy and reach the goals and as such it is directly linked to where the organization and each unit going .Basically this maintain necessary skills .

Meaning
Performance management is defined as a process of defining , monitoring, and using objective indicators of the performance of an organization and performance on a regular basis. Definition According to Myland , Performance Management is a systematic means of ensuring that manager and their sub matters, and to agree what future action is appropriate on both sides.

According to Institute of Personnel Management , Performance Management is a strategy which relates to every activity of the organization set in the context of its human resource policies ,culture and communication systems. The nature of strategy depends on the organizational context and can vary form organization to organization.

Purpose of Performance Management

To measure and judge performance To relate individual performance to organizational goals and objectives. To stimulate employee motivation. To enhance communication between manager and employee. To serve as a basis for judgement about rewards and recognition To serve as device for organizational control and integration.

Performance Management Process

Planning Performance

Managing Performance

Reviewing Performance Rewarding Performance

Developing Performance

Planning Performance
This refers to the process of setting the work related activities in the form of specific job objectives as integrated with the work unit or departmental goals. This involve - Set performance objectives - Assessment of employee ability and motivation to deliver objective . - Written down performance objectives . - Making periodic review and adjustment . - Seeking commitment of employees to work as per the objective .

Managing Performance
This involve working towards the performance expectations established in the performance planning stage. Managers analyze the progress of employees in achieving their performance objectives . This involve - Revisiting the performance plan of employees periodically. - Analyzing for shortcoming in achieving performance objectives with regards to time ,cost and quality. - Reinforcing employee motivation.

Reviewing Performance
Reviewing is fundamental factor of performance management. Performance need to be reviewed at predetermined intervals and feedback given to employee. This involve - Linking with planning process - Plan meetings and dates/time/location in advance with employees. - Review base on performance only - Rating system is used .

Rewarding Performance
Good performance need to be rewarded .This will promote transparency and consistency within an organization. The process of performance management will continue throughout the working life of the employee.

Developing Performance
Developing performance of employees is a dynamic process which requires managers to provide counseling for improving performance and giving an opportunity to employees share their problem freely and frankly. This involve - Delivering regular job related feedback. - Set clear performance objectives - Provide appropriate opportunities for training

Elements of Performance Management

Performance Planning Monitoring Development Rewarding

Aim of Performance Management

Achieve sustainable improvements in organization Increase the abilities of job satisfaction Provide a framework for agreement of objective Assessment of organization condition and plan for improvement. Provide a impartial rewarding system

Deference between performance

appraisal and performance management

Performance appraisal is focus on individual objective but Performance management emphasis on organization objective . Performance appraisal base on quantative and qualitative approach but Performance management base on qualified approach

Performance appraisal is annual appraisal but Performance management is continuous review process . Performance appraisal is focus on past performance But Performance management is future focus base . Performance appraisal is own by Human Resource Department But Performance management is own by line management .

Performance Management System

Reference

Human Resource Management By V.S.P.Roa PMRS by Herman Aguinus Performance Management By Topomay Deb Human Resouce Personal Management by K.Aswathapa