L T P C
MB18211 HUMAN RESOURCES MANAGEMENT
1 0 2 2
Unit – V – Performance Evaluation and Control Process – Performance Appraisal – Types,
methods, limitations and problems, ethics, Potential Appraisals Method of performance
evaluation – Feedback – Industry Practices, Promotion, Demotion, Transfer and Separation –
Implication of job change. The control process – Importance – Methods – Requirement of
effective control systems grievances – Causes – Implications- Redressal methods.
___________________________________________________________________________
Performance Appraisal and Control Process
Performance Appraisal is the systematic evaluation of the performance of employees and to
understand the abilities of a person for further growth and development. Performance
appraisal is generally done in systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.
Objectives of Performance Appraisal
Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage structure,
salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right
job.
3. To maintain and assess the potential present in a person for further growth and
development.
4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.
Advantages of Performance Appraisal
It is said that performance appraisal is an investment for the company which can be justified
by following advantages:
1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion
programmes for efficient employees. In this regards, inefficient workers can be
dismissed or demoted in case.
, 2. Compensation: Performance Appraisal helps in chalking out compensation packages
for employees. Merit rating is possible through performance appraisal. Performance
Appraisal tries to give worth to a performance. Compensation packages which
includes bonus, high salary rates, extra benefits, allowances and pre-requisites are
dependent on performance appraisal. The criteria should be merit rather than
seniority.
3. Employees Development: The systematic procedure of performance appraisal helps
the supervisors to frame training policies and programmes. It helps to analyse
strengths and weaknesses of employees so that new jobs can be designed for efficient
employees. It also helps in framing future development programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the
validity and importance of the selection procedure. The supervisors come to know the
validity and thereby the strengths and weaknesses of selection procedure. Future
changes in selection methods can be made in this regard.
5. Communication: For an organization, effective communication between employees
and employers is very important. Through performance appraisal, communication can
be sought for in the following ways:
a. Through performance appraisal, the employers can understand and accept
skills of subordinates.
b. The subordinates can also understand and create a trust and confidence in
superiors.
c. It also helps in maintaining cordial and congenial labour management
relationship.
d. It develops the spirit of work and boosts the morale of employees.
All the above factors ensure effective communication.
6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating
performance of employees, a person’s efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him to improve
his performance in the future.
Performance Appraisal Tools and Techniques
Following are the tools used by the organizations for Performance Appraisals of their
employees.
1. Ranking
2. Paired Comparison
, 3. Forced Distribution
4. Confidential Report
5. Essay Evaluation
6. Critical Incident
7. Checklists
8. Graphic Rating Scale
9. BARS
10. Forced Choice Method
11. MBO
12. Field Review Technique
13. Performance Test
We will be discussing the important performance appraisal tools and techniques in detail.
1. Ranking Method
The ranking system requires the ratter to rank his subordinates on overall
performance. This consists in simply putting a man in a rank order. Under this
method, the ranking of an employee in a work group is done against that of another
employee. The relative position of each employee is tested in terms of his numerical
rank. It may also be done by ranking a person on his job performance against another
member of the competitive group.
Advantages of Ranking Method
i. Employees are ranked according to their performance levels.
ii. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
iii. The “whole man” is compared with another “whole man” in this method. In
practice, it is very difficult to compare individuals possessing various
individual traits.
iv. This method speaks only of the position where an employee stands in his
group. It does not test anything about how much better or how much worse an
employee is when compared to another employee.
v. When a large number of employees are working, ranking of individuals
become a difficult issue.
vi. There is no systematic procedure for ranking individuals in the organization.
The ranking system does not eliminate the possibility of snap judgements.
2. Forced Distribution method
, This is a ranking technique where ratters are required to allocate a certain percentage
of rates to certain categories (eg: superior, above average, average) or percentiles (eg:
top 10 percent, bottom 20 percent etc). Both the number of categories and percentage
of employees to be allotted to each category are a function of performance appraisal
design and format. The workers of outstanding merit may be placed at top 10 percent
of the scale, the rest may be placed as 20 % good, 40 % outstanding, 20 % fair and 10
% fair.
Advantages of Forced Distribution
i. This method tends to eliminate raters bias
ii. By forcing the distribution according to pre-determined percentages, the
problem of making use of different raters with different scales is avoided.
Limitations of Forced Distribution
iii. The limitation of using this method in salary administration, however, is that it
may lead low morale, low productivity and high absenteeism.
Employees who feel that they are productive, but find themselves in lower
grade (than expected) feel frustrated and exhibit over a period of time
reluctance to work.
3. Critical Incident techniques
Under this method, the manager prepares lists of statements of very effective and
ineffective behaviour of an employee. These critical incidents or events represent the
outstanding or poor behaviour of employees or the job. The manager maintains logs
of each employee, whereby he periodically records critical incidents of the workers
behaviour. At the end of the rating period, these recorded critical incidents are used in
the evaluation of the worker’s performance. Example of a good critical incident of a
Customer Relations Officer is : March 12 - The Officer patiently attended to a
customer’s complaint. He was very polite and prompt in attending the customers
problem.
Advantages of Critical Incident techniques
i. This method provides an objective basis for conducting a thorough discussion
of an employees performance.
ii. This method avoids recency bias (most recent incidents are too much
emphasized)
MB18211 HUMAN RESOURCES MANAGEMENT
1 0 2 2
Unit – V – Performance Evaluation and Control Process – Performance Appraisal – Types,
methods, limitations and problems, ethics, Potential Appraisals Method of performance
evaluation – Feedback – Industry Practices, Promotion, Demotion, Transfer and Separation –
Implication of job change. The control process – Importance – Methods – Requirement of
effective control systems grievances – Causes – Implications- Redressal methods.
___________________________________________________________________________
Performance Appraisal and Control Process
Performance Appraisal is the systematic evaluation of the performance of employees and to
understand the abilities of a person for further growth and development. Performance
appraisal is generally done in systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance.
Objectives of Performance Appraisal
Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages, wage structure,
salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right
job.
3. To maintain and assess the potential present in a person for further growth and
development.
4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programmes.
Advantages of Performance Appraisal
It is said that performance appraisal is an investment for the company which can be justified
by following advantages:
1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion
programmes for efficient employees. In this regards, inefficient workers can be
dismissed or demoted in case.
, 2. Compensation: Performance Appraisal helps in chalking out compensation packages
for employees. Merit rating is possible through performance appraisal. Performance
Appraisal tries to give worth to a performance. Compensation packages which
includes bonus, high salary rates, extra benefits, allowances and pre-requisites are
dependent on performance appraisal. The criteria should be merit rather than
seniority.
3. Employees Development: The systematic procedure of performance appraisal helps
the supervisors to frame training policies and programmes. It helps to analyse
strengths and weaknesses of employees so that new jobs can be designed for efficient
employees. It also helps in framing future development programmes.
4. Selection Validation: Performance Appraisal helps the supervisors to understand the
validity and importance of the selection procedure. The supervisors come to know the
validity and thereby the strengths and weaknesses of selection procedure. Future
changes in selection methods can be made in this regard.
5. Communication: For an organization, effective communication between employees
and employers is very important. Through performance appraisal, communication can
be sought for in the following ways:
a. Through performance appraisal, the employers can understand and accept
skills of subordinates.
b. The subordinates can also understand and create a trust and confidence in
superiors.
c. It also helps in maintaining cordial and congenial labour management
relationship.
d. It develops the spirit of work and boosts the morale of employees.
All the above factors ensure effective communication.
6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating
performance of employees, a person’s efficiency can be determined if the targets are
achieved. This very well motivates a person for better job and helps him to improve
his performance in the future.
Performance Appraisal Tools and Techniques
Following are the tools used by the organizations for Performance Appraisals of their
employees.
1. Ranking
2. Paired Comparison
, 3. Forced Distribution
4. Confidential Report
5. Essay Evaluation
6. Critical Incident
7. Checklists
8. Graphic Rating Scale
9. BARS
10. Forced Choice Method
11. MBO
12. Field Review Technique
13. Performance Test
We will be discussing the important performance appraisal tools and techniques in detail.
1. Ranking Method
The ranking system requires the ratter to rank his subordinates on overall
performance. This consists in simply putting a man in a rank order. Under this
method, the ranking of an employee in a work group is done against that of another
employee. The relative position of each employee is tested in terms of his numerical
rank. It may also be done by ranking a person on his job performance against another
member of the competitive group.
Advantages of Ranking Method
i. Employees are ranked according to their performance levels.
ii. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
iii. The “whole man” is compared with another “whole man” in this method. In
practice, it is very difficult to compare individuals possessing various
individual traits.
iv. This method speaks only of the position where an employee stands in his
group. It does not test anything about how much better or how much worse an
employee is when compared to another employee.
v. When a large number of employees are working, ranking of individuals
become a difficult issue.
vi. There is no systematic procedure for ranking individuals in the organization.
The ranking system does not eliminate the possibility of snap judgements.
2. Forced Distribution method
, This is a ranking technique where ratters are required to allocate a certain percentage
of rates to certain categories (eg: superior, above average, average) or percentiles (eg:
top 10 percent, bottom 20 percent etc). Both the number of categories and percentage
of employees to be allotted to each category are a function of performance appraisal
design and format. The workers of outstanding merit may be placed at top 10 percent
of the scale, the rest may be placed as 20 % good, 40 % outstanding, 20 % fair and 10
% fair.
Advantages of Forced Distribution
i. This method tends to eliminate raters bias
ii. By forcing the distribution according to pre-determined percentages, the
problem of making use of different raters with different scales is avoided.
Limitations of Forced Distribution
iii. The limitation of using this method in salary administration, however, is that it
may lead low morale, low productivity and high absenteeism.
Employees who feel that they are productive, but find themselves in lower
grade (than expected) feel frustrated and exhibit over a period of time
reluctance to work.
3. Critical Incident techniques
Under this method, the manager prepares lists of statements of very effective and
ineffective behaviour of an employee. These critical incidents or events represent the
outstanding or poor behaviour of employees or the job. The manager maintains logs
of each employee, whereby he periodically records critical incidents of the workers
behaviour. At the end of the rating period, these recorded critical incidents are used in
the evaluation of the worker’s performance. Example of a good critical incident of a
Customer Relations Officer is : March 12 - The Officer patiently attended to a
customer’s complaint. He was very polite and prompt in attending the customers
problem.
Advantages of Critical Incident techniques
i. This method provides an objective basis for conducting a thorough discussion
of an employees performance.
ii. This method avoids recency bias (most recent incidents are too much
emphasized)
