Question

1. Create a Criteria-Based Performance Appraisal on your assigned HIM Function

• Release of information

2. Identify what data or monitoring tools you used to evaluate performance in a separate Word document

3 Include Performance Evaluation Summary Sheet as the last page of your Evaluation.

4 Assignments cannot be less than 3 pages in length.

Answer 1

Process of Performance Appraisal – Steps, Stages and Process

Process of Performance Appraisal – Top 6 Systematic Steps: Setting Criteria, Policies on Who Evaluates, When, and How Often, Techniques and Feedback

The assessment of employee contribution to an organization can be defined as the process of performance appraisal. Assessment of employee performance helps organisations determine whether the performance of employees is aligned with the goals of the organisation.

Performance appraisal can be defined as the process implemented by the managers to help employees perform better. This process involves three types of activities- strategic, administrative and developmental. On the strategic front, employee activities must be linked with the strategic goals of the organisation.

Organisations should design appraisal systems that maximise the performance of the employees. This also involves developing feedback systems that enable the employees to perform effectively. From an administrative point of view, performance appraisals are useful for taking decisions regarding salaries, promotions, retention/termination of employees.

Unfair procedures used in PAs create job dissatisfaction. Performance appraisal should be fair and must provide accurate and reliable data. In order to provide these, a systematic process must be followed.

Step one of this process is completed when an organization conducts a job analysis.

Step # 1. Setting Criteria:

The dimensions of performance upon which an employee is evaluated are called the criteria of evaluation, for example quality of work, quantity of work, and cost of work etc.

An effective criterion should possess the following characteristics:

a) Reliability- A measure of performance must be consistent. The most important type of consistency for a performance measure is inter rater reliability. If different raters observe the same employee, they should arrive at similar conclusion about the quality of that employee’s output.

b) Relevance- A measure of performance must be related to the actual output of an incumbent as logically as possible.

c) Sensitivity- Any criterion must be able to reflect the difference between high and low performers. That is, high and low performers must receive appraisal scores that accurately represent the difference in their performance.

d) Practicality- The criterion must be measurable.

Most studies reveal multiple criteria are necessary to measure performance completely. The multiple criteria are added together statistically or combined into a single multifaceted measure. The choice of criteria is not an easy process.

Management by Objectives:

Peter F. Drucker is often considered to be the originator of management by objectives. The concept continued to take hold in the management vocabulary in the 1960’s and 1970’s. Management by objectives can be applied both by higher-level managers to managers beneath them and by these lower-level managers to the employees that they manage.

According to Peter Drucker, Management by objectives is based upon communication taking place between manager and employee. The manager and employee engage in a process of jointly crafting the goals that will direct the employee’s efforts and serve as the basis for evaluation.

MBO focuses attention on what must be accomplished rather than how it is to be accomplished. Employees are evaluated on their performance results. Hence the other name of MBO is Result-Based performance appraisal system. MBO is a kind of goal setting and appraisal programme involving six steps.

Step-1- Setting the Organizational Goals:

Establish an organization wide plan for next year and set the goal(s). Basically the top level personnel are responsible for this.

Step-2- Setting the Departmental Goals:

Head of the departments take the broader company goals (such as increasing production by 40 percent, market share by 20 percent, improving profit by 30 percent, launching a new product etc.) and with their superiors, jointly set goals for their department.

Step-3- Defining Expected Results:

The head of the departments and their subordinates agree on a set of combined set short-term and individual performance targets.

Step-4- Reviewing the Performance:

Departmental heads compare each employee’s actual and targeted performance either periodically or annually. Periodic review is intended to identify and solve specific performance problems. The annual review is conducted to assess and reward one’s overall contribution to the organization.

Step-5- Providing Feedback:

Both parties discuss and evaluate the actual progress made in achieving the goals, where they have committed mistakes, the ways to rectify them, and how efficiently the employee can meet the target next time.

Advantages of MBO method are:

a. Both the superiors and the subordinates jointly set the goals.

b. It involves employees in the whole process of goal setting and increased employee empowerment increases employee job satisfaction and commitment.

c. The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback.

Disadvantages of MBO method are:

a. MBO demands a great deal of time to set verifiable goals at all levels of the organization.

b. Too many goals are set and there by confusion occurs.

c. In the process of defining everything rigidly, some of the qualitative aspects such as employee attitudes, job satisfaction, emotion etc. might be ignored.

d. There is too much emphasis on short-term.

e. It involves too much paperwork.

f. Very often the superiors are not properly trained on the MBO process and the mechanics involved.

g. MBO is used as a rigid control mechanism that intimidates rather than motivates.

The way to overcome the above pitfall and make MBO a success is to allow managers at all levels to explain, coordinate and guide the programme in a persuasive and democratic way. The jointly set target must be specific, measurable, achievable, and realistic and time bound.

Multi-Person Evaluation Methods:

1. Ranking:

Ranking method compares one employee to another, resulting in an ordering of employees in relation to one another. Rankings often result in overall assessments of employees, rather than in specific judgments about a number of job components. Straight ranking requires an evaluator to order a group of employees from best to worst overall or from most effective to least effective in terms of a certain criterion.

This is difficult and time consuming, if the supervisor is required to rank a large number of employees. It is easier for the supervisor to rank the best and the worst employee in a reliable way than it is to rank the average ones. Hence another method known as alternative ranking is used to overcome the above problems.

Alternative ranking makes the same demand, but the ranking process must be done in a specified manner (for example, by first selecting the best employee in a group, then the worst, then the second-best, then the second-worst, etc. till all the persons have been ranked).

Though the ranking method is simple and easier to use, it has many drawbacks like:

a. The whole man is compared with the whole man. Practically it is difficult to compare individuals possessing varied behavioural traits.

b. The method only tells about the position where an employee stands in a group. It does not tell anything about how much better or worse an employee is when compared to another employee.

c. In case of a large number of employees, ranking is a tedious task.

2. Paired Comparison:

Paired comparison is used to overcome the problems faced in case of the ranking method. This method makes the ranking process easier for the supervisor, especially when there are large numbers of employees to be ranked.

In paired comparison method each employee is compared with all other employees in the group; for every trait. For example, when there are five employees (A,B,C,D, and E) to be compared, then A’s performance is compared with that of B’s performance and decision is taken regarding whose performance is better or worse. B is compared with all other employees.

Since A is already compared with B, this time B is compared with C, D and E. Following this procedure when there are five employees, fifteen comparisons are made. The number of comparisons or decisions to be made can be determined with the help of the formula n (n-2) where n is the number of employees.

For several individual traits, paired comparisons are made, tabulated and then rank is assigned to each worker.

This method is very simple. But the major limitation is that the method cannot be applied when there are large number employees to be evaluated.

3. Forced Distribution:

The forced distribution method of performance evaluation derives its name from the fact that those responsible for providing evaluations, the raters, are “forced” to distribute ratings for the individuals being evaluated into an organizationally determined, “pre-specified” performance distribution.

Typically, the performance distribution is chosen to reflect the normal curve, so that a relatively small percentage of rates are required to be placed in the extremes (best and worst performers) and larger percentages of rates are placed in the categories towards the middle of the performance distribution.

For example, an evaluator rating 25 individuals might be instructed to place three individuals in the category labelled “outstanding” and three individuals in the category labeled “poor”. The evaluator might further be asked to place five individuals in the category described as “above average” and five more individuals in the category described as “below average.”

Finally, the evaluator would place nine individuals in the category labelled “average.” In this way the evaluator has forced the distribution of rate performance into a predetermined set of ratings.

Another example may be in human resource management paper, the professor may decide that in the class test, top 10 percent of the students receive A grade, next 20 percent receive B grade, the middle 40 percent receive C grade, the next 20 percent receive D grade and the bottom 10 percent receive F grade.

The main factor in this method is that the predetermined distribution must be followed by a rater, regardless of how well the students or the employees performed. So if the whole class performs extremely well, as per the above example many of the students will be disappointed, since 20 percent receive B grade, in spite of their well performance in the test.

Similarly, if the whole class performs extremely poor, 10 percent of students still receive A grade, in spite of their bad performance in the test. The same thing is also applicable to organizations.

In the above examples several issues emerge. First, the criterion on which the performance judgment is made must be defined. It is possible to ask raters to make their judgments based on the “overall performance” or on each of a series of performance dimensions.

The advantage of forced distribution method is that by forcing the distribution according to predetermined percentages, the problem of making use of different raters with different scales is avoided. The pitfall of this method is that it may lead to low productivity. The employees who feel that they are productive, but find themselves placed in a grade lower than expected feel frustrated and become demoralized.

Many organizations like HSBC, Ford Motor etc. using forced distribution method have found it to be a failure.

Step # 5 and 6. Appraisal Feedback:

The appraisal process is considered as a continuous process and a two-way communication system between the appraiser and the appraisee. To make the process effective and efficient, the supervisor should hold an evaluation interview or feedback interview with each subordinate in order to discuss his/her appraisal and to set objectives for upcoming appraisal period.

One of the primary purposes of formal performance appraisals is to provide clear, performance-based feedback to employees. Almost 45 years ago, Maier (1958) highlighted the crucial role of appraisal feedback in the performance appraisal process. Indeed, the significance of feedback to the appraisal process as well as to the broader management process has been widely acknowledged.

The feedback interview is designed to accomplish goals such as-recognizing and encouraging superior performance so that it will continue, sustaining acceptable behaviours, and changing the behaviour of rates whose performance is not meeting organizational standards.

Roberts (2002) highlights the importance of the appraisal/evaluation interview for employee satisfaction. It is one of the crucial attributes of an effective performance appraisal system. According to him only the interview can give insight into the employee’s voice and provide valuable information.

Gabris and Ihrke (2001) demonstrate a close relationship between employee burnout and employee perceptions of the performance appraisal interview. Nathan, Mohrman, and Millman (1991) and Poon (2004) address the importance of the supervisor’s role in the appraisal interview for job satisfaction.

Nathan et al. (1991) document the role of interpersonal relations between the supervisor and the employee with regard to the effects of appraisal interviews on performance and job satisfaction.

In case of new employees, the HR manager must ensure that constructive feedback derived from the assessment, whether positive or negative, must be communicated to them, thereby instilling a sense of transparency between the employer and fresher. This is the period where an HR manager need to handhold the employees dealing with this phase for first time and be articulate about his/her areas of concern and improvement.

Since the new employee is not aware of the organizational situations, HR manager should identify his/her concerning areas, offer solutions and discuss their future plan in the organization.

Feedback has the following positive aspects:

a. From the organization’s point of view, feedback keeps both its members’ behaviour directed toward desired goals and stimulates and maintains high levels of effort.

b. From the individual’s point of view, feedback satisfies a need for information about the extent to which personal goals are met as well as a need for social comparison information about one’s relative performance.

c. Appraisal Feedback must be provided to employees to enhance their self-perception. Self-perception is the process of understanding oneself i.e. where he/she stands in terms of his/ her efficiency, what his/her strengths and weaknesses are, to what extent he/she is able to use his/her capabilities, and how he/she can improve himself/herself further.

d. Feedbacks potentially can influence future performance.

e. It is believed to play a significant role in the development of job and organizational attitudes.

Whether these benefits actually accrue, well depend on how feedback recipients react to the feedback. Reactions to feedback are presumed to indicate overall system viability and to influence future job performance as well as job and organizational attitudes.

Handling Negative Feedback:

A negative appraisal adversely affects the employee’s morale and performance. Hence this situation must be carefully handled by both the employer and employee.

On receiving a negative review the employee may adopt the following strategy:

a. Firstly it is the duty of the employee to accept the appraisal with a positive attitude by understanding that bad review is an opportunity for improvement and development. The employee must not be defensive about the negative feedback.

b. The employee must try to set clear development goals with the manager by focusing on building areas where the employee’s skills and knowledge have come out as deficient, and making the strengths even stronger. The goals should be SMART, i.e. Specific, Measurable, Achievable, Relevant, and Time-bound.

c. The employee must meet with the manager at least once in a month to review the progress made against the goals.

From the organization side, the employer must make it ensure that objective and meaningful feedback along with a supportive and an encouraging culture should be provided to the employee in order to reduce the feeling of resentment and de-motivation.

Before declaring an employee to be a non-performer and implementing disciplinary actions, the organization should first find out if there is something that they need to change in the employee’s current scenario, which will make him/her perform better. This may include changing the employee’s team, manager, role and so on.

Checking the performance on a continuous basis helps in making the employees more productive. Laying-off the non performing employee is the direct and easy way of solving a performance problem. But it has many repercussions, it leads to disruption of normal work flow, severance pay, and time lost in training the employee.

Process of Performance Appraisal – 7 Main Procedural Stages Usually Adopted to Examine the Skill and Qualities of Employees

In order to examine the skill and qualities of employees, there is need to make a sequential stage for making a process of performance appraisal.

In any organisation, the procedural stages may be described here:

Stage # 1. Defining Objectives of Performance Appraisal:

The first step in effective performance appraisal involves defining the objectives of it. Performance appraisals are used for different purposes ranging to evaluate the skill and efficiency of employees, to evaluate their behaviour to raise their work performance and to fulfil different job requirements. It also aims at improving the performance, instead of being a more tool of reward distribution.

Stage # 2. Defining Performance Expectations:

It is an important part to define and establish the standards and norms of performance expectations. It includes informing the employee what is expected to him on the job. An employee should not be expected to begin the job until they understand what is expected of them. Generally, the expectations may be the level of products’ quality, productivity, resource utilisation, quantity of production, better behaviour, devotion and work attitudes etc.

Stage # 3. Developing Relevancy and Uniformity:

Performance appraisal should also be viewed as a system to make the job expectations relevant with job performance. The required job skill, qualifications and experience must be relevant with the nature and process of job performance. Besides, at this stage, it is needful to make some uniformity of job expectation and job standards should be maintained the uniformly at different organisational level.

Stage # 4. Designing Performance Appraisal System:

Before going to implement the appraisal system, there is need to manage and organise a system approach. The overall appraisal includes both objective and subjective assessment of how well an employee has performed during the period under review. It may be designed to involve all the relevant factors concerning of employee, the environment of organisation and the job specifications etc.

These three factors are interrelated and interdependent for making a systems design for appraisal process. The appraisal system may be based on individualised, subjective, qualitative and oriented towards problem solving.

The considerable aspects, while designing an appraisal system might be given here:

i. The appraisal process must be congruent with work environment and management styles etc.;

ii. The reliable, simple and fair methodologies can be followed;

iii. Somehow the employees may be involved in determining the appraisal criteria and standards;

iv. The job description should be based on job analysis;

v. The positive and negative rewards system should be part of the performance appraisal system;

vi. More emphasise to be given to the job expectations;

vii. The appraisal system can be developed on structural manner and the informal contacts and interactions can also be used;

viii. The relevance, responsiveness and commitments should be oriented towards the objectives of the programme in which the employees have been assigned a role.

Stage # 5. Implementing Performance Appraisal System:

There are some stages under that the performance appraisal system can be implemented properly. The stages may be as to study the job analysis, document performance, implement or regularise the appraisal method, appraisal interview and sometime the post appraisal interviews also conduct to discuss the terms and job expectations with suitable reward etc., with employees are involved here.

Stage # 6. Performance Appraisal Interview:

Besides the appraisal system as follows by managers, they can also conduct an interview, a traditional method to get some sophisticated and informal information concerning of employees. A manager can ask the employee, being appraised, to bring the information within the part of interview as –

i. To fill up the self-evaluation form to fulfil employees’ achievements and contribution;

ii. To provide individual views, feelings and opinions about job and its performance;

iii. To show their desired work area in that they are most comfortable to complete their assignments;

iv. To review the job descriptions and job specification with the viewpoints of employees etc.;

v. To make strength and weaknesses of the employees.

As such, performance appraisal interview makes the most visible contribution to review the issues that will be an excellences in this regard.

Stage # 7. Desired Outcomes/Results:

The final step in the performance appraisal process is the use of appraisal data for making different HR strength and weaknesses as well as for making strategic HR decisions. The appraisal data and information are much useful to different HR decisions.

For it the areas may be given here:

i. Proper Induction programme;

ii. Fair and appropriate selection and recruitment of employees;

iii. Proper reward system;

iv. Assessment of training and development;

v. Designing the training programme;

vi. Handling grievance and problem solving;

vii. Promotion, transfer and termination;

viii. Career development; and

ix. Review post performance against agreed goals etc.