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.
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.