Performance Review Methods Can Be Broadly Classified Into Three Categories These Are
Operation Appraisal Methods: Traditional and Modern Methods!
Each method of performance appraisal has its strengths and weaknesses may exist suitable for i arrangement and non-suitable for some other one. Equally such, there is no single appraisal method accepted and used past all organisations to mensurate their employees' performance.
All the methods of appraisal devised so far take been classified differently past unlike authors. While DeCenzo and Robbins'^ take classified appraisal methods into three categories: absolute methods, relative methods and objective methods; Aswathappa has classified these into ii categories past-oriented and time to come-oriented.
Michael R Carrell et. al. take classified all appraisal methods into as many as vi categories: rating scales, comparative methods, critical incidents, 6ssay, MBO and combination methods. Stone and Levis" have classified the methods into 2 broad categories: narrow interpretation and broad estimation. Beatty and Schneier accept categorised various methods of appraisal into four groups: comparative methods, absolute methods, goal setting, and direct indices.
A more than widely used classification of appraisement methods into two categories, viz., traditional methods and modem methods, is given by Strauss and Sayles". While traditional methods lay accent on the rating of the private'southward personality traits, such as initiative, dependability, bulldoze creativity, integrity, intelligence, leadership potential, etc.; the modem methods, on the other hand, place more than emphasis on the evaluation of piece of work results, i.e., chore achievements than the personal traits! Modem methods tend to be more than objective and worthwhile. The various methods included in each of the ii categories are listed in Table 28.4.
In the discussion that follows, each method under both categories volition be described briefly.
Traditional Methods :
Ranking Method:
It is the oldest and simplest formal systematic method of operation appraisal in which employee is compared with all others for the purpose of placing gild of worth. The employees are ranked from the highest to the everyman or from the all-time to the worst.
In doing this the employee who is the highest on the characteristic being measured and also the one who is 50 lowest, are indicated. Then, the next highest and the side by side everyman between adjacent highest and lowest until all the employees to exist rated have been ranked. Thus, if there are ten employees to exist appraised, in that location will be 10 ranks from one to 10.
However, the greatest limitations of this appraisement method are that:
(i) Information technology does not tell that how much better or worse one is than another,
(two) The chore of ranking individuals is difficult when a large number of employees are rated, and
(iii) It is very difficult to compare ane individual with others having varying behavioural traits. To remedy these defects, the paired comparing method of performance appraisal has been evolved.
Paired Comparison:
In this method, each employee is compared with other employees on one- on one basis, normally based on one trait only. The rater is provided with a agglomeration of slips each coining pair of names, the rater puts a tick mark against the employee whom he insiders the amend of the two. The number of times this employee is compared as better with others determines his or her concluding ranking.
The number of possible pairs for a given number of employees is ascertained by the post-obit formula:
N (N-1)/two
Where N = the total number of employees to be evaluated. Let this be exemplified with an imaginary example.
If the post-obit five teachers have to be evaluated past the Vice Chanceller of a University:
(Thou), Mohapatra (M Raul (R), Venkat (V), and Barman (B), the higher up formula gives v (5 -i) / two or 10 pairs.
These are:
Thus, the pairs so ascertained give the maximum possible permutations and combinations. The number of times a worker is considered better makes his/her score. Such scores are determined for each worker and he/she is ranked according to his/her score. One obvious disadvantage of this method is that the method can become unwieldy when big numbers of employees are being compared.
Grading Method:
In this method, sure categories of worth are established in advance and carefully divers. There can be three categories established for employees: outstanding, satisfactory and unsatisfactory. There can be more than three grades. Employee performance is compared with form definitions. The employee is, then, allocated to the grade that best describes his or her performance.
Such type of grading is washed is Semester pattern of examinations and in the selection of a candidate in the public service sector. One of the major drawbacks of this method is that the rater may rate near of the employees on the higher side of their performance.
Forced Distribution Method:
This method was evolved by Tiffen to eliminate the fundamental tendency of rating almost of the employees at a higher end of the scale. The method assumes that employees' operation level confirms to a normal statistical distribution i.eastward., x,20,40,20 and 10 per cent. This is useful for rating a big number of employees' job operation and promo power. It tends to eliminate or reduce bias.
Information technology is also highly unproblematic to understand and easy to use in appraising the functioning of employees in organisations. It endure from the drawback that amend similarly, no single grade would rise in a ratings.
Forced-Choice Method:
The forced-choice method is adult by J. P. Guilford. It contains a serial of groups of statements, and rater rates how effectively a statement describes each individual existence evaluated. Mutual method of forced-pick method contains ii statements, both positive and negative.
Examples of positive statements are:
one. Gives good and clear instructions to the subordinates.
2. Tin exist depended upon to complete any task assigned.
A pair of negative statements may be as follows:
one. Makes promises beyond his limit to keep these.
ii. Inclines to favour some employees.
Each statement carries a score or weight, which is not fabricated known to the rater. The human resource section does rating for all sets of statements— both positive and negative. The final rating is done on the basis of all sets of statements. Thus, employee rating in this way makes the method more objective. The only problem associated with this method is that the actual constructing of several evaluative statements also called 'forced-pick scales', takes a lot of time and effort.
Bank check-Listing Method:
The basic purpose of utilizing cheque-list method is to ease the evaluation brunt upon the rater. In this method, a series of statements, i.east., questions with their answers in 'aye' or 'no' are prepared by the 60 minutes department (see Effigy 28-2). The bank check-list is, and then, presented to the rater to tick appropriate answers relevant to the appraisee. Each question carries a weight-age in relationship to their importance.
When the check-list is completed, it is sent to the Hour department to fix the final scores for all appraises based on all questions. While preparing questions an attempt is fabricated to determine the degree of consistency of the rater by request the same question twice simply in a dissimilar manner (see, numbers 3 and 6 in Figure 28-2).
Still, one of the disadvantages of the bank check-list method is that it is hard to assemble, analyse and weigh a number of statements about employee characteristics and contributions From a price stand up signal also, this method may be inefficient specially if there are a number of job categories in the organisation, considering a check-list of questions must exist prepared for each category of job. It volition involve a lot of money, time and efforts.
Critical Incidents Method:
In this method, the rater focuses his or her attention on those fundamental or disquisitional behaviours that brand the difference between performing a chore in a noteworthy mode (effectively or ineffectively). There are three steps involved in appraising employees using this method.
First, a list of noteworthy (good or bad) on-the-job behaviour of specific incidents is prepared. Second, a grouping of experts then assigns weightage or score to these incidents, depending upon their degree of desirability to perform a job. Third, finally a check-list indicating incidents that describe workers every bit "good" or "bad" is constructed. So, the cheque-list is given to the rater for evaluating the workers.
The basic idea behind this rating is to apprise the workers who tin perform their jobs finer in disquisitional situations. This is so considering most people work alike in normal situation. The strength of critical incident method is that information technology focuses on behaviours and, thus, approximate's performance rather than personalities.
Its drawbacks are to regularly write down the critical incidents which get time-consuming and burdensome for evaluators, i.e., managers. Generally, negative incidents are positive ones. It is rater'southward inference that determines which incidents are critical to job functioning. Hence, the method is subject to all the limitations relating to subjective judgments.
Graphic Rating Scale Method:
The graphic rating scale is one of the most popular and simplest techniques for appraising performance. It is as well known as linear rating scale. In this method, the printed appraisement form is used to appraise each employee.
The form lists traits (such as quality and reliability) and a range of chore performance characteristics (from unsatisfactory to outstanding) for each trait. The rating is washed on the basis of points on the continuum. The common practice is to follow v points scale.
The rater rates each appraisee by checking the score that best describes his or her operation for each trait all assigned values for the traits are then totaled. Figure 28-iii shows a typical graphic rating calibration.
This method is good for measuring various job behaviours of an employee. Yet, it is also subjected to rater's bias while rating employee's behaviour at job. Occurrence of ambiguity in blueprint- mg the graphic scale results in bias in appraising employee's performance.
Essay Method:
Essay method is the simplest one amidst various appraisal methods available. In this method, the rater writes a narrative description on an employee's strengths, weaknesses, past performance, potential and suggestions for improvement. Its positive point is that information technology is unproblematic in employ. It does not require complex formats and extensive/specific training to complete it.
However, essay method, similar other methods, is not costless from drawbacks. In the absenteeism of whatever prescribed structure, the essays are likely to vary widely in terms of length and content. And, of class, the quality of appraisal depends more upon rater's writing skill than the appraiser's actual level of functioning.
Moreover, because the essays are descriptive, the method provides only qualitative information well-nigh the employee. In the absence of quantitative data, the evaluation suffers from subjectivity trouble. Nonetheless, the essay method is a good get-go and is beneficial too if used in conjunction with other appraisement methods.
Field Review Method:
When there is a reason to suspect rater's biasedness or his or her rating appears to be quite higher than others, these are neutralised with the assistance of a review procedure. The review process is usually conducted past the personnel officeholder in the HR section.
The review process involves the post-obit activities:
(a) Place areas of inter-rater disagreement.
(b) Aid the group arrive at a consensus.
(c) Ensure that each rater conceives of the standard similarity.
Yet, the procedure is a fourth dimension-consuming one. The supervisors mostly resent what they consider the staff interference. Hence, the method is not widely used.
Confidential Report:
Information technology is the traditional way of appraising employees mainly in the Authorities Departments. Evaluation is made by the firsthand boss or supervisor for giving issue to promotion and transfer. Usually a structured format is devised to collect information on employee's strength weakness, intelligence, attitude, graphic symbol, attendance, subject, etc. written report.
Modern Methods :
Direction by Objectives (MBO):
Near of the traditional methods of operation appraisal are subject to the antagonistic judgments of the raters. It was to overcome this problem; Peter F. Drucker propounded a new concept, namely, direction by objectives (MBO) way dorsum in 1954 in his book.
The Practice of direction. The concept of MBO equally was conceived by Drucker, can be described as a "process whereby the superior and subordinate managers of an organisation jointly place its common goals, define each private's major areas of responsibility in terms of results expected of him and utilize these measures as guides for operating the unit and assessing the contribution of each its members".
In other words, stripped to its essentials, MBO requires the managing director to goals with each employee and then periodically talk over his or her progress toward these goals.
In fact, MBO is not only a method of operation evaluation. It is viewed by the Practicing managers and pedagogues every bit a philosophy of managerial practice considering .t .s a method by wh.ch managers and subordinates plan, organise, communicate, control and debate.
An MBO programme consists of four main steps: goal setting, operation standard, comparison, and periodic review. In goal-setting, goals are set which each individual, s to reach. The superior and subordinate jointly constitute these goals. The goals refer to the desired outcome to be accomplished past each private employee.
In performance standards, the standards are prepare for the employees equally per the previously bundled time period. When the employees commencement performing their jobs, they come to know what is to be done, what has been washed, and what remains to be done.
In the third step the actual level of goals attained are compared with the goals agreed upon. This enables the evaluator to detect out the reasons variation between the bodily and standard performance of the employees. Such a comparison helps devise training needs for increasing employees' operation it can likewise explore the conditions having their bearings on employees' performance but over which the employees have no command.
Finally, in the periodic review footstep, corrective measure is initiated when bodily functioning deviates from the slandered established in the first step-goal-setting stage. Consistent with the MBO philosophy periodic progress reviews are conducted in a constructive rather than punitive manner.
The purpose of conducting reviews is non to degrade the performer but to aid in his/her future performance. From a motivational signal of view, this would be representative of McGregor's theories.
Figure 28.4 present the MBO method of performance appraisal presently used by an engineering science giant i.e., Larsen and Turbro Express.
Limitation of MBO:
MBO is not a panacea, cure for all organisational bug.
Equally with other methods, it as well suffers from some limitations as catalogued below:
(i) Setting Un-measurable Objectives:
Ane of the issues MBO suffers from is unclear and un-measurable objectives ready for attainment. An objective such as "will exercise a improve job of training" is useless every bit it is un-measurable. Instead, "well accept iv subordinates promoted during the year" is a clear and measurable objective.
(ii) Time-consuming:
The activities involved in an MBO programme such as setting goals, measuring progress, and providing feedback can have a corking deal of time.
(iii) Tug of War:
Setting objectives with the subordinates sometimes turns into a tug of state of war in the sense that the manager pushes for higher quotas and the subordinates push for lower ones. Every bit such, goals then prepare are likely to be unrealistic.
(four) Lack of Trust:
MBO is probable to be ineffective in an environment where management has little trust in its employees. Or say, management makes decisions autocratically and relies heavily on external controls.
Behaviourally Anchored Rating Scales (Bars):
The problem of judgmental functioning evaluation inherent in the traditional methods of performance evaluation led to some organisations to go for objective evaluation past developing a technique known as "Behaviourally Anchored Rating Scales (Confined)" around 1960s. Confined are descriptions of diverse degrees of behaviour with regard to a specific performance dimension.
It combines the benefits of narratives, critical incidents, and quantified ratings by anchoring a quantified scale with specific behavioural examples of good or poor performance. The proponents of BARS claim that it offers better and more equitable appraisals than practice the other techniques of operation appraisal we discussed so far.
Developing Confined typically involves 5 steps:
1. Generating Critical Incidents:
Disquisitional incidents (or say, behaviours) are those which are essential for the performance of the job effectively Persons who are knowledgeable of the job in question (jobholders and/or supervisors) are asked to describe specific disquisitional incidents of effective and ineffective performance. These critical incidents may exist described in a few short sentences or phrases using the terminology.
two. Developing Functioning Dimensions:
The critical incidents are then clustered into a smaller set of operation dimensions, commonly five to x. Each cluster, or say, dimension is then defined.
three. Reallocating Incidents:
Various critical incidents are reallocated dimensions by another group of people who also know the job in question. Various disquisitional incidents so reallocated to original dimensions are clustered into various categories, with each cluster showing similar disquisitional incidents. Those critical incidents are retained which encounter 50 to 80% of agreement with the cluster as classified in step 2.
4. Scaling Incidents:
The same second group as in stride three rates the behaviour described in each incident in terms of effectiveness or ineffectiveness on the appropriate dimension by using seven to ix points scale. Then, average effectiveness ratings for each incident are determined to decide which incidents will exist included in the final anchored scales.
5. Developing Last Bars Instrument:
A subset of the incidents (normally six or seven per cluster) is used as a behavioural anchor for the final performance dimensions. Finally, a BARS instrument with vertical scales is fatigued to be used for performance appraisement, equally in Figure 27-5.
How Bars is adult can be exemplified with an example of grocery checkout clerks working in a large grocery chain.
A number of critical incidents involved in checking out of grocery can exist clustered into seven performance dimensions:
1. Knowledge and Judgment
2. Conscientiousness
3. Skill in Homo Relations
4. Skill in Operation of Register
5. Skill in Bagging
vi. Organisational Power of Check stand Work
seven. Skill in Monetary Transactions
8. Observational Power
Now, a Confined for 1 of these performance dimensions, namely, "knowledge and judgment" can exist adult, as in Figure 28-5. Notice how the typical BARS is behaviourally anchored with specific critical incidents.
BARS method of performance appraisal is considered better than the traditional ones considering it provides advantages similar a more accurate gauge, clearer standards, better feedback, and consistency in evaluation. However, Bars is not free from limitations.
The research on Confined indicates that it too suffers from distortions inherent in near rating scales. The research study concluded that "it is clear that research on Bars to date does not back up the high promise regarding calibration independence In short, while Confined may outperform conventional rating techniques, it is clear that they are not a panacea for obtaining high interrater reliability"
Cess Centres:
The introduction of the concept of assessment centres as a method of performance method is traced back in 1930s in the Frg used to appraise its regular army officers. The concept gradually spread to the US and the Britain in 1940s and to the Uk in 1960s.
The concept, so, traversed from the ground forces to business organization loonshit during 1960s. The concept of assessment centre is, of grade, of a contempo origin in India. In Republic of india, Crompton Greaves, Eicher, Hindustan Lever and Modi Xerox have adopted this technique of performance evaluation.
In business field, assessment centres are mainly used for evaluating executive or supervisory potential. By definition, an assessment centre is a central location where managers come together to participate in well-designed simulated exercises. They are assessed by senior managers supplemented by the psychologists and the HR specialists for 2-3 days.
Assessee is asked to participate in in-basket exercises, work groups, simulations, and office playing which are essential for successful operation of actual job. Having recorded the assessee's behaviour the raters run into to talk over their pooled information and observations and, based on it, they requite their cess about the assesee. At the terminate of the procedure, feedback in terms of strengths and weaknesses is also provided to the assesees.
The distinct advantages the assessment centres provide include more authentic evaluation, minimum biasedness, correct option and promotion of executives, then on. All the same, the technique of assessment centres is also plagued by sure limitations and problems. The technique is relatively plush and time consuming, causes suffocation to the solid performers, discourages to the poor performers (rejected), breeds unhealthy contest among the assessees, and bears adverse effects on those not selected for cess.
360 – Degree Appraisal:
Yet some other method used to assess the employee's performance is 360 – caste appraisement. This method was first developed and formally used past General Electrical Company of Usa in 1992. Then, it travelled to other countries including Republic of india. In Republic of india, companies like Reliance Industries, Wipro Corporation, Infosys Technologies, Thermax, Thomas Cook etc., have been using this method for appraising the operation of their employees. This feedback based method is mostly used for ascertaining training and development requirements, rather than for pay increases.
Under 360 – caste appraisal, performance data such as employee'south skills, abilities and behaviours, is collected "all around" an employee, i.east., from his/her supervisors, subordinates, peers and fifty-fifty customers and clients.
In other worlds, in 360-degree feedback appraisal arrangement, an employee is appraised by his supervisor, subordinates, peers, and customers with whom he interacts in the form of his job performance. All these appraisers provide information or feedback on an employee by completing survey questionnaires designed for this purpose.
All data then gathered is then compiled through the computerized system to prepare individualized reports. These reports are presented to me employees existence rated. They then meet me appraiser—exist it 1's superior, subordinates or peers—and share the information they feel equally pertinent and useful for developing a self-improvement plan.
In 360 – degree feedback, performance appraisement existence based on feedback "all around", an employee is probable to be more than correct and realistic. Even so, like other traditional methods, this method is as well bailiwick to endure from the subjectivity on the function of the appraiser. For case, while supervisor may penalise the employee by providing negative feedback, a peer, existence influenced by 'give and have feeling' may requite a rave review on his/her colleague.
Cost Accounting Method:
This method evaluates an employee'southward functioning from the monetary benefits the employee yields to his/her organization. This is ascertained by establishing a human relationship betwixt the costs involved in retaining the employee, and the benefits an organisation derives from Him/her.
While evaluating an employee's performance under this method, the post-obit factors are also taken into consideration:
1. Unit wise average value of product or service.
ii. Quality of product produced or service rendered.
3. Overhead cost incurred.
four. Accidents, damages, errors, spoilage, wastage caused through unusual wear and tear.
5. Human human relationship with others.
6. Cost of the time supervisor spent in appraising the employee.
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