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Effectiveness of Performance Appraisal

In: Business and Management

Submitted By mansi16591
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* Introduction: An organisation's goals can be achieved only when people put it their best efforts. how to ascertain whether an employee has shown his or her best performance on a given job? the answer is performance appraisal. Employees' assessment can be done by performance appraisal. * Definition of performance appraisal: performance appraisal is an objective assessment of an individual's performance against well defined benchmark.
In simple terms, an individual's performance is assessed on the basis of job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, versatility etc and according to that performance appraisal is been given.

* Objectives of performance appraisal:

General Application | Specific purpose | Developmental uses | Individual's needs | | Performance feedback | | Transfers and job assignments | | Individual's strengths and developmental needs | Administrative decisions | Salary | | Promotion | | Retention & Termination | | Recognition of individual performance | | Identification of poor performance | Organisational Maintenance | Human resource planning | | Determining organisation training needs | | Information for goal identification | | Evaluation of HR systems | Documentation | Criteria for validation research | | Documentation for HR decisions | | Helping to meet legal requirements |

* Appraisal Process:

Step 1: Objectives of Appraisal:
Appraisal focuses on to correct the problems. There are two approaches which are as under
1. System Approach
2. Traditional Approach System approach appraisal aims at improving the performance. Emphasis is not on individual assessment and reward or punishment. But it is on how the work system affect individual's performance. Where as in traditional approach, it is focusing on control of individual, there is high degree of formality and reward practises will on individual bases.

Step: 2: Establish Job Expectations:
This includes informing the employee what is expected of him on the job, his duties and responsibilities for the job etc. Individuals should not be expected to begin the job until they understand what is expected of them.
Step: 3: Design Appraisal Programme:
There are some questions which need answers to design appraisal programme which are as under.

* Formal vs. Informal: The first step in designing an appraisal programme is to decide whether the appraisal should be formal or informal. Formal appraisals usually occur at specified time periods-once or twice a year. Formal appraisals are most often required by the organisation for the purpose of employee evaluation. Informal performance appraisal can occur whenever the supervisor feels the need for communication.

* Whose performance should be rated? Employees' performance should be rated but it may be of individual or teams. The ratee may be defined as the individual, work group, division, or organisations. Two conditions necessitate a group level appraisal i.e. group cohesiveness and difficulty in identifying individual performance. Immediate supervisor, subordinates, clients, rating committees and self appraisal.

* What should be rated?
Quality: Degree to which the result of carrying out of any activity is fulfilling the purpose.
Quantity: The amount produced or number of units produced.
Timeliness: degree to which any activity is completed.
Cost effectiveness: Degree to which the use of organisation's resources is maximised in getting gain.
Need for supervision: Degree to which job performer can carry out his job without having supervisory assistance. * Methods of appraisal: Past Oriented | Future Oriented | Rating scale | Management By Objective | Check list | 360 degree appraisal | Forced choice | Psychological appraisal | Critical incident | Assessment centres | Essay | | Cost accounting | |

Past Oriented:

1. Rating scale: This is the most popular for appraising employee performance. It consist of several numerical scales. It measures employee's performance through initiative, output, attendance, attitude, co-operations, dependability etc. Each scale ranges from excellent to poor. So the rater check its employee's performance on the scale of excellent to good and then performance appraisal will be given. 2. Checklist: In this method checklist of statements on the traits of the employee and his or her job is prepared in two columns like 'YES' or 'No' . All the answers will be taken in to consideration for assessment. More YES answers will considered as good performance. 3. Forced Choice Method: In this method the rater is forced to select statement which are readymade. In this method, rater is given statements about an employee. These statements are arranged in blocks of two or more and then which statement is most or least descriptive of employee. 4. Critical incident method: This format of performance appraisal is a method which is involved identifying and describing specific incidents where employees did something really well or that needs improving during their performance period. 5. Essay Evaluation method: In this style of performance appraisal, managers/ supervisors are required to figure out the strong and weak points of staff’s behaviors. Essay evaluation method is a non-quantitative technique. It is often mixed with the method the graphic rating scale.

Future Oriented: 1. Management by Objectives (MBO): MBO represents a modern method of evaluating the performance of personnel. Management by objectives can be described as “a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individuals' major areas of responsibility in terms of results expected of him and use these measures as guides for operating the unit and assessing the contributions of each of its members”.

2. 360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees’ performance comes from all the sources that come in contact with the employee on his job. 360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the "on-the-job" performance of the employee.
360 degree appraisal has four integral components:

1. Self appraisal
2. Superior’s appraisal
3. Subordinate’s appraisal
4. Peer appraisal.

3. Assessment centre refers to a method to objectively observe and assess the people in action by experts or HR professionals with the help of various assessment tools and instruments. Assessment centers simulate the employee’s on the job environment and facilitate the assessment of their on the job performance. An assessment centre typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies and on the job behaviour and potential to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics.

* Benefits of performance appraisal:

I. For the appraisee:

a) Increased motivation and job satisfaction. b) Clear understanding of what is expected and what needs to be done to meet expectations. c) Opportunity to discuss aspirations and any guidance, support or training needed to fulfill these aspirations. d) Improved working relationships with the superior. e) Opportunity to overcome the weaknesses by way of counselling and guidance from the superior. f) Increased sense of personal value as he too is involved in the appraisal process

II. For the appraiser:

a) Opportunity to develop an overview of individual jobs. b) Opportunity to identify strengths and weaknesses of appraisees. c) Increased job satisfaction. d) Opportunity to link team and individual objectives with department & organizational objectives. e) Opportunity to clarify expectations that the manager has from teams and individuals. f) Opportunity to re-prioritize targets. g) Means of forming a more productive relationship with staff based on mutual trust and understanding. h) Due to all above Increased sense of personal value.

III. For the company:

a) Increased sense of cohesiveness and loyalty. b) Managers are better equipped to use their leadership skills and to develop their staff. c) Effective communication of organization’s objectives and values. d) Improved overview of tasks performed by each member of a group. e) Identification of ideas for improvement. f) Creation and maintenance of a culture of continuous improvement. g) Communication to people that they are valued.…...

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