Performance Appraisal- Meaning, definition, process, methods,essentials and problems.

ii. Human Resource Accounting

  • In this method, cost of and contribution of human resources are measured and compared.
  • Cost of human resources include recruitment and selection cost, induction and placement cost, training and development cost, compensation and benefits cost etc. and contributions include the value addition made by the employee to the organization to further the goals and objectives of the organization.
  • Difference between cost and contribution will reflect the performance of employees.

iii. Behaviourally Anchored Rating Scale (BARS)

  • This method  combines graphic rating scales with critical incidents method.
  • It is designed to assess behaviors required to successfully perform a job, where each job is likely to have several job dimensions and separate scales are supposed to be developed for each.
  • It defines the dimesions to be evaluated in behavioural terms and uses critical events to anchor different performance levels.
  • This method identifies incidents that are relevant to the performance of jobs usually assisted by job analysis.
  • Each job is then assigned a numerical value, which shows the weight that is attached to it.
  • These dimensions provide the criteria for assessing employees.

iv. 360 degree Method

  • This method takes information from more than one source, that is, superiors, subordinates, peers, customers and oneself in order to get a 360 degree view of an individual’s performance.
  • For instance 360 degree evaluation of a manager involves evaluation of a manager by everyone above, alongside and below him.
  • Structured questionaires are used to collect responses about  a manager from his bosses, peers and subordinates. Several parameters relating to performance and behaviour are used in the questionnaires. Each manager is assessed by a minimum of fifteen colleagues, at least two of them being his bosses, four of them  peers,  and six of them subordinates. The responses are presented collectively to the assess in the form of charts  and

v. Management by Objectives (MBO)

  • To avoid, or deal with , the feeling that they are being judged by unfairly high standards, employees in some organizations are being asked to set or help set their own performance goals.
  • The main steps  involved in performance appraisal through MBOare as follows:

1.Set Organisational Goals

 First of all, goals of the organisation in key areas of performance  are  laid  down.  These  goals  are  defined   in  clear,  precise   and measurable terms.  They should  be challenging yet attainable. A thorough analysis of internal environment   (strengths  and  weaknesses)  and   external  environment (opportunities and  threats)  of the organisation is made  to set these  goals.

2. Defining Performance   Targets

 On  the  basis   of organisational  goals, performance standards  for each  employee are  defined. Every subordinate writes down his own performance goals which are work-related and  career-oriented. His manager also writes down the goals he thinks  the subordinate should  strive for. The two then  discuss   them,  reach an  agreement and  put agreed goals in writing. Thus,  employees at all levels are  actively involved in goal-setting. Clear  attainable goals help  channel energies in the  right  direction and  let  the  employee know the basis  on which he will be judged.  The goals are periodically reviewed and revised to keep  them up-to-date.

The level of performance considered satisfactory to achieve the goal is defined. Measure checkpoints are established to measure progress towards the goals. Action plans  required to achieve the goals are  also decided through mutual   consultation among an employee and  his  superior. Joint  goal-setting and joint  action  planning are essential elements of appraisal through MBO.

3. Performance Reviews

 Frequent performance review meetings between the manager and  the subordinate are held. Initially, monthly reviews may be used  and then extended to quarterly reviews. In the review meetings, progress is assessed, weaknesses and constraints are identified and steps  to be taken  to improve performance are decided. Subordinates actively participate in this  process. This leads to self-control by the employee.

4. Feedback

After  every  performance  review, feedback on performance is communicated  to employee so that he can regulate and  improve upon  his own performance. On the basis of performance review rewards are  decided. New goals and performance targets  are determined for the next period.

  • The method measures performance and not personality of employees.
  • The drawback is that setting targets and objects may not be possible for certain jobs.
Performance Appraisal- Meaning, definition, process, methods,essentials and problems.

2 thoughts on “Performance Appraisal- Meaning, definition, process, methods,essentials and problems.

    1. Please visit Entrance Exam Section on our website. We have uploaded notes and MCQS on HRM for first three units.Soon will be uploading rest of the units.

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