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LESSON: 31 Methods of appraisal: Learning Objectives: 1. To know different methods of performance appraisal. 2. To know the merits and demerits of different methods of PA. The last to be addressed in the process of designing an appraisal program is to determine methods of evaluation. Numerous methods have been devised to measure the quantity and quality of employees’ job performance. Each of the methods discussed could be effective for some purposes, for some organizations. None should be dismissed or accepted as appropriate except as they relate to the particular needs of the organization or of a particular type or employees. Broadly, all the approaches to appraisal can be classified into I) II) Past-oriented methods Future-oriented methods

Each group has several techniques as shown below: Past-oriented Methods: • • • • • • • • • • • • Rating scales Checklists Forced choice method Forced distribution method Critical incident method Behaviorally anchored scales Field review method Performance tests and observations Annual confidential reports Essay method Cost accounting approach Comparative evaluation approach

Future Oriented tests: • Management by objectives • 360-Degree appraisal • Psychological appraisals • Assessment centers Past-oriented Methods: Let us discuss each briefly:

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1. Rating scale: Rating scales offer the advantages of adaptability, relatively easy use and low cost. Nearly every type of job can be evaluated with the rating scale, the only requirement being that the job-performance criteria should be changed. This way, a large number of employees can be evaluated in a short time, and the rater does not need any training to use the scale. The disadvantages of this method are several. The rater’s biases are likely to influence evaluation, and the biases are particularly pronounced on subjective criteria such as cooperation, attitude and initiative, furthermore, numerical scoring gives an illusion of precision that is really unfounded. 2. Checklist: Here a checklist of behaviour descriptions is prearranged and each person is evaluated against such list. Rater merely record the list and a separate group can allocate weight ages for each list and finally arrive at total points or marks obtained. Advantages: 1. Checklist reduces subjectively because recording is done by some one else act as the rater. Rater, at the end put weight ages and adds marks. 2. Comparison possible. Limitations: 1. Normally confined to staff of personnel department. 2. Difficult for all jobs. 3. Forced Choice method: This is a special type of checklist. Rater has to choose between two statements or more, all of which may be favorable or unfavorable. Appraisers job is to select that statement which is most appropriate to describe the employee. Sample statements for a salesman may be framed as follows: • • • • • • Slow but steady Avoid risks Consult headquarters on important decisions Meet the customer with confidence Friendly and informal Plain speaking.

Here the rater does not know the desirable answer for a particular job. This is available in the ‘key’ kept confidential either in computer or files. The answers of rating are fed into the computer and marks obtained with the help of keys. Adv: Since appraiser does not know the “correct answer”, the bias is minimized.

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Limitations: appraisers as well raters dislike this method, since they feel they are not taken into confidence by giving them the right answers. 4. Forced distribution method: One of the errors in rating is leniency- clustering a large number of employees around a high point on a rating scale. The forced distribution method seeks to overcome the problem by compelling the rater to distribute the rates on all points on the rating scale. 5. Critical incidents method: The critical incidents method of employee assessment has generated a lot of interest these days. The approach focuses on certain critical behaviours of an employee that make all the difference between effective and non-effective performance of a job. The supervisors and when they occur cord such incidents. 6. Behaviourally Anchored Rating Scales (BARS): Behaviourally anchored scales, sometimes called behavioural expectation scales, are rating scales whose scale points are determined by statements of effective and ineffective behaviours. They are said to be Behaviourally anchored in that the scales represent a range of descriptive statements of behaviour varying from the least to the most effective. BARS have the following features: 1. Areas of performance to be evaluated are identified and defined by the people who will use the scales. 2. The scales are anchored by descriptions of actual job behaviour that, supervisors agree, represent specific levels of performance. The result is a set of rating scales in which both dimensions and anchors are precisely defined. 3. All dimensions of performance to be evaluated are based on observable behaviours and relevant to the job being evaluated since BARS are tailormade for the job. 4. Since the raters who will actually use the scales are actively involved in the development process, they are more likely to be committed to the final product. The procedure for BARS is usually five stepped. • Generate Critical Incidents: Persons with knowledge of the job to be appraised (job holders/supervisors) are asked to describe specific illustrations (critical incidents) of effective performance behaviour.

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•

Develop Performance Dimensions: These people then cluster the incidents into a smaller set (or say 5 or 10) of performance dimensions. (dimension) is then defined. Each cluster

•

Reallocate Incidents:

Any group of people who also know the job then

reallocate the original critical incidents. They are given the cluster’s definitions, and critical incidents, and asked to redesign each incident to the dimension it best describes. Typically a critical incident is retained if some percentage (usually 50 to 80%) of this group assigns it to the same cluster as the previous group did. • Scale of Incidents: This second group is generally asked to rate (7 or 9 point scales are typical) the behaviour described in the incident as to how effectively or ineffectively it represents performance on the approximate dimension

•

Develop Final Instrument: Subsets of incidents (usually 6 or 7 per cluster) used as “behaviour anchors” for the performance dimensions. BARS were developed to provide results that subordinates could use to improve performance. Superiors would feel comfortable to give feedback to the ratees. Further, BARS help overcome rating errors. Unfortunately, this method too suffers from distortions inherent in most rating techniques. Though BARS technique is more time-consuming and expensive than other appraisal tools, yet it has got certain advantages, such as: 1. A more accurate gauge, since persons expert in the technique does BARS, the results are sufficiently accurate. 2. Clear Standards: The critical incidents along the scale help to clarify what is meant by “extremely good” performance, “average” performance and so forth. 3. Feedback: The use of critical incidents may be more useful in providing feedback to the people being appraised.

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4. Independent dimension: Systematically clustering the critical incidents into 5 or 6 performance dimensions, helps in making the dimensions more independent of one another. 5. Rater – Independence: The technique is not biased by the experience and evaluation of the rater. 7. Field review method: This is an appraisal by someone outside the assessee’s own department, usually someone from the corporate office or the HR Dept. The outsider reviews employee records and holds interviews with the ratee and his or her supervisor. The method is primarily used for making promotional decision at the managerial level. Field reviews are also useful when comparable information is needed form employees in different units or locations. 8. Performance Tests and observations: With a limited number of jobs, employee assessment may be based upon a test of knowledge or skills. The test may be of the paper-and-pencil variety or an actual demonstration of skills. The test must be reliable and validated to be useful. Even then, performance tests are apt to measure potential more than actual performance. In order for the test to the job related, observations should be made under circumstances likely to be encountered. Practically may suffer if costs of test development or administration are high. 9. Confidential Records: Confidential records are maintained mostly in government departments, though its application in the industry is not ruled out. 10. Essay method: In the essay method, the rater must describe the employee within a number of broad categories, such as (i) the rater’s overall impression of the employee’s performance, (ii) the profitability of the employee, (iii) the jobs that the employee is now able or qualified to perform, (iv) the strengths and weakness of the employee, and (v) the training and the development assistance required by the employee. Although this method may be used independently, it is most frequently found in combination with others. It is extremely useful in filing information gaps about the employees that often occur in the better-structured checklist method.

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11. Cost Accounting method/ Human asset accounting method: This method evaluates from the monetary returns the employee yields to his her org. A relationship is established between the cost included in keeping the employee and the benefit the org derives from him or her. Performance of the employee is then evaluated based on the established relationship between the cost and the benefit. The current value of a firm’s human organization can be appraised by developed procedures, by undertaking periodic measurements of “key casual” and “intervening enterprise” variables. They key causal variables include the structure of an organization’s management policies, decisions, business leadership, strategies, skills and behaviour. The intervening variables reflect the internal state and health of an organization. They include loyalties, attitudes, motivations, and collective capacity for effective interaction, communication and decision-making. These two types of variable measurements must be made over several years to provide the needed data for the computation of the human asset accounting.

Point to Ponder: Which method is the best for appraising an employee? Can a few of these methods be combined and made into one?
I hope you have followed the Past oriented method; now let we will be discussing the modern methods of appraisal. Future Oriented Appraisal: Is it not enough if only the past performance is assessed? How an employee can perform in the days to come is equally important. Focusing on employee potential or setting future performance goals can assess this. The commonly used techniques are MBO, psychological appraisals, and assessment centers. Management By Objective (MBO): This can describe as process where by the supervisor and subordinate in an organization jointly identifies its common goal, define each individuals responsibilities and use these measures as guides for operating the unit and assessing the contribution of each of its members

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Objective: • • • • To change behaviour and attitude towards getting the job done. It is management system and philosophy that stress goals rather than method. It provides responsibility and accountability. To meet these needs by providing opportunities for participation in goal-setting process. On the basis of these factors rater’s especially HR department used to make appraisal of the employees in the organization. Assessment Center Method: This concept is first started in German Army to evaluate the performance the soldiers’ .The purpose of this method is to test candidates in a social situation using a number of assessors and a variety of procedures. The most important feature of the assessment center is job-related stimulations. This stimulation include the characteristics that managers feel are important for the job. On this basis the evaluators evaluate the employees. Psychological Appraisals: Large organizations employ full-time industrial psychologists. When psychologists are used for evaluations, they assess and individual’s future potential and not past performance. The appraisal normally consists of in-depth interviews, psychological tests, discussions with supervisors and a review of other evaluations. The psychologists the writes an evaluation of the employee’s intellectual, emotional, motivational and other related characteristics that suggest individual potential and may predict future performance. The evaluation by the psychologist may be for a specific job opening for which the person is being considered, or it may be a global assessment of his or her future potential. From these evaluations, placement and development decisions may be made to shape the person’s career. Because this approach is slow and costly, it is usually required for bright young members who, think, may have considerable potential within the org. Since the quality of the appraisal depends largely on the skills of the psychologists, some employees object to this type of evaluation, especially if cross-cultural differences exist. Assessment Centers: Mainly used for executive hiring, assessment centers are now being used for evaluating executive or supervisory potential. As assessment center is a central location where

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managers may come together to have their participation in job-related exercise evaluated by trained observers. The principal idea is to evaluate managers over a period of time, say one to three days, observing their behaviour across a series of select exercises or work samples. After recording their observations of ratee behaviours, the raters meet to discuss these observations. The decision regarding the performance of each assesses in based upon this discussion of observations. Self-rating and peer evaluation are also thrown in for final rating. Use of appraisal data: The final step in evaluation process is the use of appraisal data. The data and information generated through performance evaluation must be used by the HR dept. In one way or the other, data and information outputs of performance-appraisal programme can critically influence these coveted employer-employee reward opportunities. Specifically, the data and information will be useful in the following areas in HRM: • • • • • • Remuneration administration Validation of selection programmes Employee training and development programmes Promotion, transfer and lay-off decisions Grievance and discipline programmes HR planning.

Point to Ponder: Do you think that the modern methods are more effective as compared to the traditional methods?

We will be discussing the 360-degree method in the next lesson


				
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