USES OF PERFORMANCE APPRAISAL

abhishreshthaa

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Performance appraisal is crucial tool in the hands of the management to bring about greater agility and responsiveness in human resources of an organization. Performance appraisal is the foundation of much human resource decision. Therefore, it has multifarious uses as depicted below:


The above figure is explained in detail below:
 PERFORMANCE IMPROVEMENT: Performance feedback allows the employee, manager and personnel specialists to intervene with appropriate actions to improve performance.

 COMPENSATION ADJUSTMENTS: Performance evaluations help decision-makers determine who should receive pay raises. Many firms grant part or all pay increases and bonuses based upon merit, which is determined mostly through performance appraisals.
 PLACEMENT DECISIONS: Promotions, transfers and demotions are usually based on past or anticipated performance. Often promotions are a reward for past performance.

 TRAINING AND DEVELOPMENT NEEDS: Poor performance may indicate the need for retraining. Likewise, good performance may indicate untapped potential that should be developed.

 CAREER PLANNING AND DEVELOPMENT: Performance feedback guides career decisions about specific career paths one should investigate.

 STAFFING PROCESS DEFICIENCIES: Good or bad performance implies strengths or weakness in the personnel department’s staffing procedures.

 INFORMATIONAL INACCURACIES: Poor performance may indicate errors in job analysis information, human resource plans, or other parts of the personnel management information system. Reliance on inaccurate information may have led to inappropriate hiring, training, or counseling decisions.

 JOB DESIGN ERRORS: Poor performance may be a symptom of ill-conceived job designs. Appraisals help diagnose these errors.

 EQUAL EMPLOYMENT OPPURTUNITY: Accurate performance appraisals that actually measure job related performance ensure that internal placement decisions are not discriminatory.

 EXTERNAL CHALLENGES: Sometimes performance is influenced by factors outside the work environment such as family, financial, health or other personal matters. If uncovered through appraisals, the human resource department may be able to provide assistance.



 FEEDBACK TO HUMAN RESOURCES: Good/bad performance throughout the organization indicates how well the human resource function is performing.
 
Uses of performance appraisal is mainly done to boost the confidence but, the methods changes , i would like to share some methods to boost the confidence of the employee by appraising such as:-

TECHNIQUES / METHODS OF PERFORMANCE APPRAISALS


Numerous methods have been devised to measure the quantity and quality of performance appraisals. Each of the methods is effective for some purposes for some organizations only. None should be dismissed or accepted as appropriate except as they relate to the particular needs of the organization or an employee.

Broadly all methods of appraisals can be divided into two different categories.

Past Oriented Methods
Future Oriented Methods
Past Oriented Methods

1. Rating Scales: Rating scales consists of several numerical scales representing job related performance criterions such as dependability, initiative, output, attendance, attitude etc. Each scales ranges from excellent to poor. The total numerical scores are computed and final conclusions are derived. Advantages – Adaptability, easy to use, low cost, every type of job can be evaluated, large number of employees covered, no formal training required. Disadvantages – Rater’s biases

2. Checklist: Under this method, checklist of statements of traits of employee in the form of Yes or No based questions is prepared. Here the rater only does the reporting or checking and HR department does the actual evaluation. Advantages – economy, ease of administration, limited training required, standardization. Disadvantages – Raters biases, use of improper weighs by HR, does not allow rater to give relative ratings

3. Forced Choice Method: The series of statements arranged in the blocks of two or more are given and the rater indicates which statement is true or false. The rater is forced to make a choice. HR department does actual assessment. Advantages – Absence of personal biases because of forced choice. Disadvantages – Statements may be wrongly framed.

4. Forced Distribution Method: here employees are clustered around a high point on a rating scale. Rater is compelled to distribute the employees on all points on the scale. It is assumed that the performance is conformed to normal distribution. Advantages – Eliminates Disadvantages – Assumption of normal distribution, unrealistic, errors of central tendency.

5. Critical Incidents Method: The approach is focused on certain critical behaviors of employee that makes all the difference in the performance. Supervisors as and when they occur record such incidents. Advantages – Evaluations are based on actual job behaviors, ratings are supported by descriptions, feedback is easy, reduces recency biases, chances of subordinate improvement are high. Disadvantages – Negative incidents can be prioritized, forgetting incidents, overly close supervision; feedback may be too much and may appear to be punishment.

6. Behaviorally Anchored Rating Scales: statements of effective and ineffective behaviors determine the points. They are said to be behaviorally anchored. The rater is supposed to say, which behavior describes the employee performance. Advantages – helps overcome rating errors. Disadvantages – Suffers from distortions inherent in most rating techniques.

7. Field Review Method: This is an appraisal done by someone outside employees’ own department usually from corporate or HR department. Advantages – Useful for managerial level promotions, when comparable information is needed, Disadvantages – Outsider is generally not familiar with employees work environment, Observation of actual behaviors not possible.

8. Performance Tests & Observations: This is based on the test of knowledge or skills. The tests may be written or an actual presentation of skills. Tests must be reliable and validated to be useful. Advantage – Tests may be apt to measure potential more than actual performance. Disadvantages – Tests may suffer if costs of test development or administration are high.

9. Confidential Records: Mostly used by government departments, however its application in industry is not ruled out. Here the report is given in the form of Annual Confidentiality Report (ACR) and may record ratings with respect to following items; attendance, self expression, team work, leadership, initiative, technical ability, reasoning ability, originality and resourcefulness etc. The system is highly secretive and confidential. Feedback to the assessee is given only in case of an adverse entry. Disadvantage is that it is highly subjective and ratings can be manipulated because the evaluations are linked to HR actions like promotions etc.

10. Essay Method: In this method the rater writes down the employee description in detail within a number of broad categories like, overall impression of performance, promoteability of employee, existing capabilities and qualifications of performing jobs, strengths and weaknesses and training needs of the employee. Advantage – It is extremely useful in filing information gaps about the employees that often occur in a better-structured checklist. Disadvantages – It its highly dependent upon the writing skills of rater and most of them are not good writers. They may get confused success depends on the memory power of raters.

11. Cost Accounting Method: Here performance is evaluated from the monetary returns yields to his or her organization. Cost to keep employee, and benefit the organization derives is ascertained. Hence it is more dependent upon cost and benefit analysis.

12. Comparative Evaluation Method (Ranking & Paired Comparisons): These are collection of different methods that compare performance with that of other co-workers. The usual techniques used may be ranking methods and paired comparison method.

Ranking Methods: Superior ranks his worker based on merit, from best to worst. However how best and why best are not elaborated in this method. It is easy to administer and explanation.
Paired Comparison Methods: In this method each employee is rated with another employee in the form of pairs. The number of comparisons may be calculated with the help of a formula as under.
N x (N-1) / 2
 
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