UNIVERSITY OF DELHI / SCHOOL OF OPEN LEARNING
B. Com. (Program) / B. Com. (Hons.)
N.O.T.E.S
UNIT - 4
LESSON 1: PERFORMANCE APPRAISAL
INTRODUCTION :
Performance Appraisal:
1. Definition: Performance appraisal involves evaluating and recognizing an employee's effectiveness and potential for growth and development.
2. Evaluation Process: Performance appraisal is carried out through various methods, including supervisors assessing employee performance against targets and plans, exploring factors influencing performance, and motivating employees for improvement.
3. Job-Related Assessment: Performance appraisal assesses an employee's performance based on job-specific criteria, including strengths, limitations, and potential for future advancement.
4. Performance Management: Performance management is the process of assessing and improving an employee's job-related achievements, serving as a basis for determining pay and advancement opportunities.
5. Process vs. System: Performance appraisal is judgmental, while performance management is comprehensive. Performance management takes a pragmatic approach, considering various factors, whereas appraisals rely on fixed metrics
Overall, performance appraisal is a crucial tool for evaluating and recognizing employee performance, providing insights for growth and development, and informing decisions regarding compensation and advancement.
OVERVIEW OF PERFORMANCE APPRAISAL :
Nature of Performance Appraisal:
- Performance appraisal serves the purposes of providing input on employees' skills, modifying behavior for increased productivity, and assisting in future job assignments and compensation decisions.
Objectives of Employee Appraisal:
1. Establishing salaries, bonuses, and pay structures.
2. Identifying employees' strengths and weaknesses for appropriate job placements.
3. Evaluating and nurturing employees' potential for development and advancement.
4. Providing feedback to employees on their performance.
5. Influencing employees' working habits.
6. Analyzing and maintaining training programs.
Advantages of Annual Reviews:
- Advancement opportunities for efficient employees.
- Development of compensation packages based on performance.
- Employee development through training programs.
- Validation of selection processes.
- Effective communication and improved labor-management relations.
- Motivation and encouragement for better performance.
Process of Performance Review:
Performance Management:
Performance management is a tool used by managers to track and evaluate the work performed by their employees, aiming to create an environment where individuals can reach their highest potential and deliver high-quality work efficiently.
1. Achievement Frameworks:
- Help employees perform at their best and produce superior work effectively.
- Focus on defining clear expectations and promoting accountability and transparency.
2. Perceiving Individuals within the Workplace System:
- Emphasizes understanding employees in the context of the overall workplace system.
- Considers the impact of the work environment on performance.
Methods of Performance Management:
- Conventional methods involve setting goals, expectations, and deliverables and measuring performance against them.
- Modern methods shift towards continuous learning and frequent communication.
- Examples of modern methods include Management Based on Objectives (MBO), 360-Degree Feedback, Assessment Center Method, Accounting for Human Resources, and Behaviorally Anchored Rating Scale (BARS) Method.
Importance of a Genuine and Truthful System:
- Annual review systems are often criticized for not providing an accurate picture of performance.
- Modern appraisal methods aim to address this issue and provide more authentic evaluations.
Implementing these modern appraisal methods as part of a digital performance management system can lead to more accurate evaluations, a higher success rate, and maximum benefits for both employees and organizations.
Five Modern Performance Appraisal Methods:
1. Management by Objectives (MBO):
- Managers and employees collaborate to set specific goals aligned with organizational objectives. For example, a sales manager and a salesperson might set a target to increase sales by 10% within a quarter.
- Regular meetings are held to review progress and provide feedback. The focus is on the achievement of measurable outcomes.
- Example: The manager and employee meet every month to discuss sales figures, assess progress towards the set target, and provide guidance for improvement.
360-Degree Feedback Method:
- Feedback is collected from multiple sources, including managers, peers, subordinates, and customers. It provides a comprehensive assessment from different perspectives.
- This method helps identify an employee's strengths, weaknesses, and areas for improvement. It promotes a well-rounded evaluation.
- Example: A project manager receives feedback from team members, colleagues from other departments, clients, and their manager, providing a holistic view of their performance and interpersonal skills.
2 Assessment Center Method:
- Employees participate in simulated exercises, such as group discussions, role plays, and problem-solving tasks, designed to assess their skills, competencies, and potential for future roles.
- Trained assessors observe and evaluate employee performance during these activities, providing valuable insights.
- Example: A leadership development program includes an assessment center where participants engage in team exercises, presentations, and interviews to assess their leadership abilities and potential for higher positions.
3 Human Resource Accounting Method:
- This method assesses an employee's value to the organization based on the economic benefits they bring. It considers factors like productivity, cost-effectiveness, and the employee's contributions to revenue generation.
- The goal is to determine the return on investment (ROI) of each employee and their impact on the organization's financial performance.
- Example: A software company evaluates the performance of software developers by measuring the number of completed projects, customer satisfaction ratings, and the revenue generated from their work.
4 Behaviorally Anchored Rating Scale (BARS) Method:
- BARS involves assessing employee performance based on specific behavioral examples tied to different performance levels. These examples are derived from job descriptions and competency frameworks.
- Evaluators rate employees on each behavior, providing a more objective and consistent assessment.
- Example: A customer service team uses a BARS evaluation to rate employees' communication skills, problem-solving abilities, and customer satisfaction. They assign ratings like "excellent," "good," "average," or "needs improvement" to each behavior.
Implementing these modern performance appraisal methods can enhance the accuracy and effectiveness of evaluations, leading to better employee development, engagement, and overall organizational success.
Potential Appraisal
Employee Counselling
Employee counseling is a crucial aspect of annual reviews and potential evaluations to support employee growth and development.
Key points about employee counseling:
1. Purpose: Employee counseling aims to assist individuals facing technological, personal, and emotional adjustment issues that affect their job performance.
2. Sensitivity: Careful and sensitive handling of counseling sessions is essential to prevent employee dissatisfaction.
3. Factors influencing performance: Counseling addresses personal factors, job nature, supervision, workgroup dynamics, and conflicts that may contribute to emotional maladjustment and affect performance.
4. Benefits of counseling: Effective counseling improves employee performance, addresses underlying causes of poor performance, and can serve as evidence for potential termination if improvement doesn't occur.
5. Manager's role: Counseling is a tool for managers to enhance employee behavior and performance, providing support and encouragement.
6. Counseling process: A successful counselor should be approachable, possess good interpersonal and communication skills, have a genuine desire to help, and maintain an open and flexible attitude.
7. Supportive process: Employee counseling involves collaboration between the psychologist (counselor) and the employee to solve problems, change behavior, and promote personal growth. Confidentiality is maintained.
8. Two-dimensional approach: Counseling helps employees adjust to their work environment, develop emotional intelligence, and improve interactions with others.
9. Communication and understanding: Counseling relies on effective communication, primarily through face-to-face discussions, where emotions and concerns are shared for better comprehension and resolution.
10. Historical context: Counseling in industries originated from personnel counseling programs aimed at eliciting emotionally significant matters from employees. It has since played a vital role in supporting individuals and organizations.
Need for Employee Counselling:
1. Escaping Troubles: Counselling provides employees with a fresh approach to dealing with their issues and helps them escape from their troubles.
2. Understanding Company Concerns: Employees need to be aware of the company's concerns about their performance or any other issues they may be facing.
3. Identifying Workplace Issues: Counselling helps in identifying workplace issues and addressing ineffective results.
4. Increasing Productivity and Confidence: Employee counseling enhances productivity and builds employee confidence in their work.
Objectives of Employee Counselling:
1. Multidimensional Approach: Employee counseling aims to benefit all parties involved, including employees, their families, peers, subordinates, seniors, the organization, and society as a whole.
2. Popularity and Future Importance: Employee counseling is gaining popularity, particularly in medium and large organizations, and is expected to play a more significant role in the future.
Logic Behind Counselling:
1. Two-Person Exchange: Counselling involves the exchange of ideas and feelings between two individuals.
2. Individual and Professional Issues: Counselling addresses both personal and professional issues of employees.
3. Executed by Experts and Non-Specialists: Counselling can be conducted by both experts and non-specialists, depending on the situation.
4. Confidentiality: Counselling is typically kept confidential to create an open environment for conversations and discussions.
5. Improving Organizational Effectiveness: Counselling aims to improve organizational effectiveness by helping employees resolve their issues.
Counselling and Mentoring:
1. Dynamic Relationship: The trusted relationship with supervisors or mentors nurtures, supports, and guides employees.
2. Mentoring Definition: Mentoring involves providing sentimental assistance and guidance from a senior person to a younger person.
Three Basic Ingredients:
1. Communication: Involves listening, responding, and providing feedback to facilitate effective communication during co-counseling mentoring.
2. Empowering: Enabling the person to exercise autonomy, reinforcing desired behaviors, and creating a learning environment.
3. Serving: Identifying developmental needs and helping the person improve and increase effectiveness.
Job Transfer and Promotion
Job Review and Request Process:
1. Substantive Changes: When significant, measurable changes occur in responsibilities, a job review is necessary.
2. Local Level Handling: Job reviews are managed through the HR office at the local level.
3. Request Submissions: Supervisors, HR officers, or employees can submit requests for job reviews.
4. Timely Decision-Making: Decisions on job reviews are typically made within a reasonable time period.
5. Salary Increase: When an employee is reclassified to a higher grade, a salary increase is often granted.
Transfer and Promotion:
1. Transfer: A transfer involves moving a worker from one job to another without a significant increase in responsibility or income. It refers to a horizontal movement of the worker without major changes in status or responsibilities. Example: An employee moves from the finance department to the marketing department in the same position level.
2. Promotion: A promotion is a shift to a higher job position with increased responsibility and income. It signifies a vertical movement and a significant increase in authority. Example: An employee is promoted from a junior manager to a senior manager, with higher responsibilities and a higher salary.
IN-TEXT QUESTIONS
1. ______ is an objective analysis of an employee's skill with well-defined standards.
a. Assessment b. Planning of human resources
c. Goal recognition d. None of the above
2. _____________ is in connection with performance valuation.
a. Task creation b. Training and Development
c. Employment Review d. None of the above
3. Performance appraisal is also known as?
a. Production volume b. Technical skills
c. Employee evaluation d. None of the above
4. Match the following overall quality evaluation implementations to their particular reasons.
I. Managerial Usage/ Solutions A. Performance Evaluation
II. Credentials B. Job cuts
III. Organizational safeguarding/ C. Assisting in reaching statutory obligations
Objective
IV. Developmental Uses D. HR system evaluation
a. I-C, II-D, III-B, IV-A b. I-B, II-C, III-D, IV-A
c. I-B, II-C, III-D, IV-D d. I-A, II-B, III-D, IV-C
5. Which among the following is the primary goal of performance appraisal?
a. Productivity b. Job Knowledge
c. Employee Evaluation d. None of the above
ANSWERS :
1. a. Assessment
2. c. Employment Review
3. c. Employee Evaluation
4. b. I-B, II-C, III-D, IV-A
5. c. Employee Evaluation
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