Performance Appraisal Process PDF

04/10/2024 CHAPTER 2 PERFORMANCE APPRAISAL...

04/10/2024 CHAPTER 2 PERFORMANCE APPRAISAL PROCESS COURSE: PERFORMANCE MANAGEMENT COURSE CODE: BSHR 4103 SPECIALIZATION: HRM CO LLEG E O F ECO N O M IC S A N D B U S IN ES S A D M IN ISTR ATIO N Source (Image):https://www.assignmentpoint.com/business/human-resource-management/discuss-helpful-performance-appraisals-process.html 1 CHAPTER TWO- OUTLINE Ø PERFORMANCE EVALUATION PROCESS Ø WHO DOES APPRAISAL? Ø INFORMAL VERSUS SYSTEMATIC APPRAISAL PROCESSES Ø WHEN TO APPRAISE? Ø WHAT SHOULD BE RATED? 2 1  04/10/2024 PERFORMANCE EVALUATION PROCESS Source : Mamoria, C., & Gankar, S. (2008). Textbook of human resource management. , Global Media, 2008. ProQuest Ebook Central,Pp 244 3 3 PERFORMANCE EVALUATION PROCESS STEP 1: The process of evaluation begins with the establishment of performance standards.' Performance standards define the expected levels of employee performance. Sometimes they are labeled benchmarks, goals, or targets—depending on the approach taken. In a sense, performance standards define what satisfactory job performance is, so performance standards should be established before work is performed. Well-defined standards ensure that everyone involved knows the levels of accomplishment expected. 4 4 2  04/10/2024 PERFORMANCE EVALUATION PROCESS- Contd.. At the time of designing a job and formulating a job description, performance standards are usually developed for the position. These standards should be clear and not vague, and objective enough to be understood and measured. These standards should be discussed with the supervisor's to find out which different factors are to be incorporated, weights and points to be given to each factor and these then should be indicated on the Appraisal Form, and later on used for appraising the performance of the employees. Both numerical and nonnumeric standards can be established. Sales quotas and production output standards are familiar numerical performance standards. Source : : M amoria, C., & Gankar, S. (2008). Textbook of human resource management. , Global M edia, 2008. ProQuest Ebook Central,Pp 244 -245 5 5 PERFORMANCE EVALUATION PROCESS- Contd.. A standard of performance can also be based on non numerical criteria. Assessing whether someone has met a performance standard, especially a non numerical one, can be difficult, but usually can be done. For example, how would you correctly measure someone’s ability to speak a foreign language before the person was sent overseas? Source : : Mamoria, C., & Gankar, S. (2008). Textbook of human resource management. , Global Media, 2008. ProQuest Ebook Central,Pp 244 -245 6 6 3  04/10/2024 PERFORMANCE EVALUATION PROCESS- Contd.. STEP 2: The next step is to communicate these standards to the employees, for the employees left to themselves, would find it difficult to guess what is expected of them. It is the responsibility of management to ensure that the employee understands: The job responsibilities that he or she needs to complete When he or she must complete the job tasks How those job responsibilities relate to the goals of the work unit The criteria that will be used to review the performance Communication takes place only when it is both received and understood by the receiver. To make communication effective, 'feedback' is necessary from the subordinate to the manager. Satisfactory feedback ensures that the information communicated by the manager has been received and understood in the way it was intended. 7 7 PERFORMANCE EVALUATION PROCESS- Contd.. STEP 3: This step is to the 'measurement of performance(Performance Appraisal).' To determine what actual performance is, it is necessary to acquire information about it. We should be concerned with how we measure and what we measure. a) How is performance measured? Four sources of information are frequently used to measure actual performance: personal observation, statistical reports, oral reports, and written reports. 8 8 4  04/10/2024 b) What is measured? What is measured is more critical to the evaluation process than how to measure. Selection of wrong criterion can result in serious dysfunctional consequences. The criterion chosen to measure must represent performance as articulated in the first two steps. When an employee is told that she will be evaluated based on criterion X and then her performance is appraised on criterion Y, the employees’ effort would decline and her behavior would change to look good on criterion Y. 9 9 PERFORMANCE EVALUATION PROCESS- Contd.. STEP 4: The fourth step is the comparison of actual performance with standards. The employee is appraised and judged of his potential for growth and advancement. Attempts are made to note deviations between 'standard performance' and 'actual performance.‘ STEP 5: At this stage, the results of appraisal are discussed periodically with the employees, where good points, weak points, and difficulties are indicated and discussed so that performance is improved. The information that the subordinate receives about his assessment has a great impact on his self-esteem and on his subsequent performance. Conveying good news is considerably less difficult for both the manager and the subordinate than when performance has been below expectations 10 10 5  04/10/2024 PERFORMANCE EVALUATION PROCESS- Contd.. STEP 6: The final step is the initiation of corrective action when necessary; corrective action can be of two types. Ø One is immediate and deals predominantly with symptoms. Immediate corrective action is often described as "putting out fires," Ø The other is basic and delves into causes & gets to the source of deviation and seeks to adjust the difference permanently. Coaching and Counselling may be done or special assignments and projects may be set; persons may be deputed for formal training courses, and decision-making responsibilities and authority may be delegated to the subordinates. Attempts may also be made to recommend for salary increases or promotions, if these decisions become plausible in the light of appraisals. Source : : Mamoria, C., & Gankar, S. (2008). Textbook of human resource management. , Global Media, 2008. 11 ProQuest Ebook Central,Pp 244 -245 11 WHO DOES APPRAISAL ? Supervisors: Supervisors include superiors of the employee. other superiors having knowledge about the work of the employee and department head or manager. General practice is that immediate superiors appraise the performance which in turn is reviewed by the departmental head/manager. Peers: Peer appraisal may be reliable if the work group is stable over a reasonably long period of time and performs tasks that require interaction. However, little research has been conducted to determine how peers establish standards for evaluating others or the overall effect of peer appraisal on the group's attitude. Source : Rao, P. S. (2010). Human resource management : Text and cases.Himalaya Publishing House. PP.157-158 12 12 6  04/10/2024 WHO DOES APPRAISAL ? – Contd.. Subordinates: The concept of having superiors rated by subordinates is being used in most organisations today, especially in developed countries. Such a novel method can be useful in other organisational settings too, provided the relationships between superiors and subordinates are cordial. Self Appraisal: If individuals understand the objectives they are expected to achieve and the‘ standards by which they are to be evaluated, they are to a great extent in' the best position to appraise their own performance. Also, since employee development means self development, employees who appraise their own performance may become highly motivated". Source : Rao, P. S. (2010). Human resource management : Text and cases.Himalaya Publishing House. PP.157-158 13 13 WHO DOES APPRAISAL ? – Contd.. Users of Services/Customers: Employee performance in service organizations relating to behaviors, promptness, speed in doing the job & accuracy can be better judged by the customers or users of services. For example, teacher's performance is better judged by students & the performance of a doctor is judged by the patients. Consultants: Sometimes consultants may be engaged for appraisal when employees or employers do not trust supervisor appraisal and the management does not trust self- appraisal, peer appraisal or subordinate appraisal. In this situation, consultants are trained and they observe the employee at workfor a sufficiently long time for the purpose of appraisal Source : Rao, P. S. (2010). Human resource management : Text and cases.Himalaya Publishing House. PP.157-158 14 14 7  04/10/2024 What is Informal Vs Systematic Appraisal Processes Source(Image):https://helpjuice.com/blog/employee-evaluation 15 15 INFORMAL VERSUS SYSTEMATIC APPRAISAL PROCESSES Performance appraisals can occur in two ways: Ø Informally Ø Systematically A supervisor conducts an informal appraisal whenever necessary. The day-to-day working relationship between a manager and an employee offers an opportunity for the employee’s performance to be evaluated. A manager communicates this evaluation through conversation on the job, over coffee, or by on-the-spot discussion of a specific occurrence. For instance, a restaurant manager might discuss a waiter’s table service while they both eat lunch in the break room. Frequent informal feedback to employees can prevent “surprises” during formal performance review. 16 16 8  04/10/2024 A systematic appraisal A systematic appraisal is used when the contact between a manager and employee is formal, and a system is in place to report managerial impressions and observations on employee performance. This approach to appraisals is quite common, Systematic appraisals feature a regular time interval, which distinguishes them from informal appraisals. Both employees and managers know that performance will be reviewed on a regular basis, and they can plan for performance discussions. For example, a front desk supervisor in a large hotel chain may wish to provide more formalized feedback to a bell captain, so a systematic appraisal session will be scheduled so that both individuals can prepare ahead of time to discuss performance issues. 17 17 When to Appraise? Informal appraisals are conducted whenever it is necessary. In systematic appraisal the Most companies require managers to conduct appraisals once or twice a year, most often annually. Probationary or introductory employees, who are new and in trial period, normally informally evaluated often—perhaps weekly for the first month, and monthly thereafter until the end of the introductory period. After that, they are treated as like others. Source : Rao, P. S. (2010). Human resource management : Text and cases.Himalaya Publishing House. 18 18 9  04/10/2024 When to Appraise? – Contd.. For employees in high demand, some employers use accelerated appraisals—every 6 months instead of every year. This is done to retain those employees so that more feedback can be given and pay raises may occur more often. In some organizations, meeting more frequently say for every 3 months with employees can enhance individual performance. But normally recorded every 6 months or one year only.Less than one year or 6 months is called as quarterly or mid review 19 19 WHAT SHOULD BE RATED? 1. Quality: The degree to which the process or result of carrying out an activity approaches perfection. 2. Quantity: The amount produced, number of units, or number of completed activity cycles. 3. Timeliness: The degree to which an activity or a result produced. 4. Cost Effectiveness: The degree to which the use of the organisation's resources (e.g. human, monetary, technological, material) is maximized in the sense of getting the highest gain. 5. Need for Supervision: The degree to which carring out a job function without supervisory assistance. 6. Interpersonal Impact: The degree to which a performer promotes feelings of self-esteem, goodwill and co-operation among co-workers and subordinate 7. Training: Need for training for improving his skills knowledge 20 20 10  04/10/2024 Source : Mamoria, C., & Gankar, S. (2008). Textbook of human resource management. , 21 Global Media, 2008. ProQuest Ebook Central,Pp.273 21 CASE STUDY Mundir food stuff factory Pvt Ltd., is a leader in the snacks industry segment. The company started in 2010 by Mr. Hakim as a small potato chips company and marketed under their brand name “MUNDIR” has grown in this last 10 years and having two manufacturing units. Initially, the company was started with 10 employees and today in the company 55 permanent employees and 70 contract workers are working. Mr. Hakim used to treat his employees well and would take good care of them. The old employees enjoy generosity of their employer and many of them took things for granted. They did not put in required efforts to make the company grow. Mr.Hakim gave all the employees highly competitive salary. 22 22 11  04/10/2024 CASE STUDY CONTD… As the team grew along with the company’s growth he found that somehow his company was not growing as fast as it should be in last 3 years, though he had exclusively selected his new team. Mr. Hakim’s son Mr. Adil had completed his Master degree in Business in London and joined his father’s business recently. Mr. Adil observed that due to his father’s traditional approach to business, his father never gave a thought to evaluate the performance of his employees. Also, his father never made out any kind of distinction between high performing and poor performing employees. He treated everyone equally. 23 23 CASE STUDY CONTD… Due to the company’s falling performance, Mr.Adil discussed with his father and decided to set about the task of turning around the company. He studied the company’s working and its employees. He found no fault in the products of marketing strategies. The problem lay among the employees. The performance of the old 8 employees had stagnated over the years. Also, the new employees, especially the high performing ones, are discontented due to lack of adequate recognition of their superior performance. Mr.Adil found that the new employees had potential, but sadly that potential was left unexposed. There had been no efforts were taken to motivate the employees to improve their performance. In this situation Mr.Adil convinced that a good performance management system would be the right answer to their company’s problems. 24 24 12  04/10/2024 CASE STUDY QUESTIONS 1) What are the problems in the Mundir food stuff factory Pvt Ltd., ? 2) How would performance management system help Mundir food stuff factory Pvt Ltd., to overcome its problems in terms of the need and importance of performance management in the company 3) How would you apply the performance management process in the company? 25 25 ACTIVITY Take a job you know well as like teacher or receptionist or bank cashier etc Ø If you want to assess the performance what steps you will follow ? Ø Apply the process to these jobs and explain it. 26 26 13