25 PERFORMANCE APPRAISAL

S. Alamelu Mangai

1.   INTRODUCTION

Any food service organizations are run and steered by people, through whom the goals set are reached. The success of an organization will depend on its ability to measure accurately the performance of the members and in using it objectively to optimize them as a vital source. According to Flippo, performance appraisal is defined as the systematic, periodic and impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job. This module will review on the meaning, objectives, process and methods of performance appraisal.

2. LEARNING OBJECTIVES

At the end of this lesson the learner will be able to

•  Understand the meaning and nature of performance appraisal.

•  Gain knowledge on the process and different methods of adopting the performance appraisal for their employee’s.

3.MEANING AND OBJECTIVE OF PERFORMANCE APPRAISAL OR MERIT RATING

3.1 Meaning of performance appraisal (PA)

Performance appraisal is the way to analyze and review the contribution of the person towards the job he is entrusted in different methods with present form. It also means to appraise or to analyze and rate up the quality of execution or discharge of a task assigned to an individual .This means to get back the feedback or response about how well a person has done or fulfilled the activity.

It helps to find out how worth the employee is in performing that particular job assigned to him. It also helps the employer to find out how much effective an organization has been in placement of such an employee. This also helps to find out the approach position or standpoint, qualities, way of response, strength and sturdiness of the individual. The interest of using the performance appraisal has increased over last thirty years and evaluating the employees formally has existed from centuries. The changes over the years in merit rating are given below:

1900	: Subjective appraisals
1940	: Increased psychometric sophistication
1950	: Management by Objectives (MBO)
1960	: BARS
1970-1990	: Hybrid system and approach

3.2 Objective of performance appraisal

The performance appraisal is implemented in food service organization to serve the following management objectives

1. to achieve the vision and mission, goal

2.to improve the quality of execution of work

3.to increase the profits

4.to fix the salary and wages

5.to work out on incentives and increments

6.to list out promotion panels

7.to find out job satisfaction

8.to improve the service

9. to assist in development and growth in career

10.to develop interpersonal relationship

11.  to improve communication

4. STAGES IN PERFORMANCE APPRAISAL SYSTEM

A performance appraisal system can be developed using the following stages as a formal PA can provide framework within which appraisers can operate.

4.1 Determine overall approach to PA

To introduce PA the decisions on the overall approach should answer the following questions:

(i)  What are the objectives of introducing performance appraisal?

(ii) What benefits are anticipated from introducing PA?

(iii)  What are the main features of the approach to PA?

4.2 Where and how should PA be introduced?

Performance appraisal is best introduced on an organization –wide basis starting at the top. Setting up of project team or working group for this purpose is the most common and best method.

4.3 Decide who is to be covered?

Normally most schemes are restricted to managers but now PA is being extended to all the members of professional, administrative, technical and support staff. The decision as to who is to be covered should be made at the outset itself.

4.4 Decide on whether the same approach should be adopted at each level

Though the performance measures vary for different levels in most cases the essence of approach is same for all levels.

4.5 Set up project team

To get overall involvement and ownership the project team should consist of managers and other employees and facilitated by a member of the human resource department and an outside consultant.

4.6 Define role of human resource department

As per the role of the human resource department, they should try to convince top level management that the introduction of PA will make a significant impact on the organizational procedures.

4.7 Decide whether to use outside consultants

To advice and facilitate the introduction of PA ,to run training programmes, to carry evaluation and to conduct attitude survey, external consultants can be used . Care should be taken to take consultants who possess higher level of experience and expertise, as it is most costly process.

4.8 Define performance management processes and documentation

The project team should pay attention to every point weighing the background of the objectives to be attained and the culture and structure of an organization with main focus to rating plans and document design.

Designing an appraisal programme poses several questions which need answer as shown in figure 4.2. The PA forms should aim at keeping it simple and brief and with enough ‘white space’ for comments. It is always enticing to have an overall description of PA system to all concerned which sets out its objectives and methods of operation and the benefits it is expected to provide for the organization and its employees.

4.9 Pilot test

The whole PA system cannot be pilot tested because the cycle lasts generally for one year. Few aspects such as performance agreements, objective setting, document completion can be pilot tested, based on which it can be fine –tuned.

4.10 Plan implementation programme

The implantation should cover the following aspects:

(i) Date of introducing PA in the whole or different parts of the organization.

(ii) Procedure for evaluating the process

(iii) Briefing / training programme

As far as practicable, PA should be based on objective factors; it should be a continuous process and should be at regular intervals. Any good method should assess the following personal qualities of managers.

5. PROCESS OF PERFORMANCE APPRAISAL

The figure 5 outlines the process of performance appraisal. Each and every step is crucial and arranged logically.

Various steps are involved in the process of performance appraisal.

1. Establish Performance Appraisal: This is the first step where in the norms or standards of quality of service need to be fixed for assessing the discharge of the service delivery. Norms have to be valued with clarity.

2.  Communication of Prediction of execution to Service Providers: The service provider should be clearly made aware of what the institution expects to be delivered to utmost satisfaction of customers.

3. Measuring Actual Performance: Based on the data collected from various reports find on observation the genuinity of executing the service is measured.

4.Comparison of Actual Performance with standards: A set of preset norms on grade is used to compare with the facts of discharge of service by individual.

5. Discussion of appraisal with individual: The results of the assessment of the service delivery executed by individual have to be explained & discussed for further motivation &self improvement.

6. Initiation of corrective Action: The final steps where in the points to be corrected have to be identified and initiated & implemented for success.

6.  SIGNIFICANCE OF PERFORMANCE APPRAISAL

PA is a formal pattern carried out for all executives’ worker/ staff with respect totheir contribution made towards the growth of the organization. The PA merely does not assess the performance of the employees but has other benefits which are summarized as below:

(a)   For the appraise

(i) Proper understanding of the role in the organization – what is expected and what needs to be done to meet those expectations.

(ii) Figure out the strengths and weakness so as to develop oneself for a better performer in future.

(iii)Increased motivation, job satisfaction, and self esteem.

(iv) Opportunity to discuss work problems and methods to overcome.

(v) Opportunity to discuss aspirations, and render guidance, support or training needed to fulfill the aspirations.

(vi) Improved working relationships with the superiors.

(b)   For the management

(i) The performers and non performers can be identified for their development towards better performance.

(ii)It will aid in creating opportunity to prepare employees for assuming higher responsibilities.

(iii) Also will create opportunity to improve communication between the employees and the management.

(iv) Training and developments needs can be identified.

(v) Ideas for improvements can be generated.

(vi) Potentials can be identified and career plans can be formulated.

(c)    For the organization

(i) Improved performance throughout the organization.

(ii)Creation of a culture of continuous improvement and success.

(iii)Conveyance of message that people are valued.

6.1 PITFALLS OF PERFORMANCE APPRAISAL

Performance appraisal helps management to collect data on human resources and use it for enhancing responsiveness of the organization .There will always be some subjectivity. Some of the common pitfalls encountered in performance appraisal are the following:

6.1.1 Shifting standards. Performance appraisal should be based on uniform and fair standards otherwise it might confuse employees

6.1.2 Different rater’s patterns .Managers differ in rating style – some rate harshly whereas others are quite lenient. This can be reduced by precise definition on the appraisal form. Subjectivity can also be moderated through a multi-player appraisal system’. Where the immediate superior initiates the report which is reviewed by next higher level.

6.1.3 Central tendency. Many appraisal forms require the appraiser to justify outstanding or poor assessments. Many raters may prefer an easier path of rating most people as ‘average’.

6.1.4 First impression Some raters may form an overall impression based on some specific qualities or features of the rate in the first meeting itself and carry it forward. Making assessment on too short a time span and inadequate knowledge is incorrect.

6.1.5 Latest behaviour – The appraisal is influenced by the most recent behaviour, ignoring the most commonly engendered behaviour during the entire period. A usually sober person may be treated as arrogant because he expressed his opinion.

6.1.6 Halo effect Some raters have tendency to rate high/low on all performance measures based on one of their characteristics.

6.1.7 Horn effect Highly critical bosses have a tendency to compare performance of their subordinates with ‘what they did ‘.

6.1.8 Stereotyping Some raters have a standard mental picture about a person because of that person’s sex, colour, caste, religion, age, style of clothing, political view, etc. Stereotyping results in over simplified view. Such assessments are based on false assumptions/feelings, rather than facts. Discretion should not become discrimination.

6.1.9 Spill – over effect. This is allowing past performance to influence present evaluation. In some organizations, when an employee reports on transfer, his earlier reports are also transferred along. This biases the mind of the new boss.

7. TOOLS AND TECHNIQUES OF PERFORMANCE APPRASIAL

Different methods have been devised to measure the quantity and quality of employee’s performance.

Broadly, all the approaches to appraisal can be classified into (1) past-oriented methods or traditional methods (2) Future –oriented methods or modern methods

7.1 Past oriented or Traditional methods

7.1.1 Straight Ranking Method or Order – merit Method

This simplest method of appraisal of employee where person’s in work group ranked one against and their names are written on card and on the basis of individual work performance, attitude, behaviour, sincerity, honesty, other positive factors arranged in order low to high . Its advantages include ease of administration and explanation. The disadvantage is it cannot be effectively applied in large establishments and if number of qualities is large. And this method cannot accurately determine the degree of difference between any two employees’.

7.1.2 Paired- Comparison method

This method is an improvement over simple ranking. Under this method, appraiser compares each with every other employee, one at a time. For example, there are five employees named A, B, C, D, and E. The performance of A is first compared with the performance pf B and decision is made about whose performance is better. Then A is compared with C, D and E in that order. The same procedure is repeated for other employee’s. The number of comparisons may be calculated with the help of a formula which read thus:

N (N-1)     Where N stands for the number of employees to be compared.

After the completion of comparison, the results can be tabulated, and a rank is created from the number of times each person is considered to be superior.

7.1.3  Graphic Rating scales

Scales are established for a number of specific factors and qualities .This scales may be descriptive ,e.g. A+,A, B+,B,C+, or excellent , good , average, Poor, etc. Sometimes, these scales may also be quantitative as for example, when they are expressed in terms of numerals, percentages, etc.

The scales impose heavy burden upon the supervisor as he must report and evaluate the performance of his subordinates on scales involving as many as five degrees. The main drawback of this system is that the rater has based his scoring upon substantial evidence is to leave space on the form after each factor and require him to explain the reason for its rating. In effect, he is asked to give example of the ratee’s behaviour that justifies the assigned rating. In practice, ratings tend to rate his men high to avoid criticism from them.

7.1.4  Forced Choice Description Method

In this, the rater is given a series of statements about an employee. These statements are arranged in blocks of two or more, and the rater indicates which statement is most or least descriptive of the employee.

This approach is known as the forced choice method because the rater is forced to select statements which are readymade. The advantage of this method is the absence of personal bias in rating and the disadvantage is that the statements may not be properly framed.

7.1.5 Forced Distribution Method

It seeks to minimise the rater’s bias. Accordingly, he is required to follow a pre – determined distribution in rating. Thus, if workers are to be graded as A , B , C , D and E, it may be laid down that 5 to 10 percent of them are to be given A’s, 20 to 30 percent B’s and so on. Forced distribution method may be faulty on one score. Though it reduces the rater’s bias, it may lead to low morale of workers, and therefore low productivity.

7.1.6  Check Lists

In a check the statements on the traits of the employee and his or her job is prepared in two columns –viz., a ‘Yes’ or ‘No’ column, as shown in table below. Each statement is attached a scale value during rating the supervisors recollects and checks all the statements. And then he values with that of individual traits and rates on the rating sheet. Weights are average and employee’s evaluated. This method involves lengthy procedures of evaluating employees. The disadvantages include susceptibility to rater’s biases (especially the halo effect), use of personality criteria instead of performance criteria, misinterpretation of check lists items, and the use of improper weights.

7.1.7 Free Form Essay Method

In essay method, rater must describe the employee within a number of board categories, such as 1. The rater’s overall impression of the employee’s performance 2. The promotability of the employee, 3. The jobs that the employee now able to qualified to perform, 4. The strengths and weakness of the employee, and 5. The training and the development assistance required by the employee, although this method may be used independently, it is most frequently found in combination with others. The strength of the essay method depends on the writing skills and analytical ability of the rater. And the weakness being that it consumes much time and the ratee’s may be rated on the quality of the appraisals that they have.

7.1.8 Critical Incidents Method

The approach focuses on certain critical behaviours of an employee that make all the difference between effective and non –effective performance of a job. Such incidents are recorded by the superiors as and when they occur. The advantages of the critical incidents method is that the evaluation is based on actual job behaviour and giving job – related feedback to the ratee is also easy. It also has few set backs as

1. Negative incidents are generally more noticeable than positive ones.

2.The recording of incidents is a chore to the supervisor and may put off and easily forgotten.

3. Managers may unload a series of complaints about incidents during an annual performance of review session.

7.1.9 Group Appraisal

In this method the appraisal is done at three levels separately by the employee, peer groups, and the superior. These reports are analysed and draws a profile based on common aspects.

7.1.10 Filed Review Technique

In this system the appraiser goes to the filed and obtains information by questioning the individual, peer groups and superiors about the performance of the employee. The information thus received about ‘how he is performing’ helps the appraiser in defining the profile of the employee

7.2  Future Oriented or Modern method

7.2.1 Assessment Centres

Assessment centres are currently being used for evaluating executive or supervisory potential. Managers come together in a centre location where managers come for their participation in job related exercises evaluated by trained observes. The idea behind this method is to evaluate mangers over a period of time, by observing their behaviour across a series of work samples. Assesses are requested to participate in in-basket exercises, work groups(without leader), computer simulations, role playing ,and other similar activities which require same attributes for the successful performance, as in actual job. After recording their observations of rate behaviour, the raters meet to discuss the observations. The decision regarding the performance of the each assesses is based upon this discussion of observations. Self appraisal and peer evaluation are also thrown in for final rating.

In a typical assessment centre the characteristics such as assertiveness, persuasive ability, communicating ability, planning and organisational ability, self- confidence, resistance to stress , energy level, decision making, sensitivity to the feeling of others, administrative ability, creativity and mental alertness. Though there would be sizeable number of trained observers and psychologists it is quite difficult to measure accurately within three days.

Assessment centre staffs are influence by subjective elements, such as personality of the candidates. Raters tend to evaluate the quality of the individual’s social skill rather than the quality of decision the individual makes. Thus this test clearly defines the criteria for selection and promotion.

7.2.2 Management by objectives

The MBO is an example of the approach that involves setting objectives and comparing performance against these objectives. Objectives give more freedom in evaluation process both for management and employees. This process is useful with managerial personnel and employees who have a fairly wide range of flexibility and self control in their jobs.

7.2.3 Cost Accounting Method

This method evaluates performance from the monetary returns the employee yields to his or her company. A relationship is established between the cost included in keeping the employee and benefit the firm derives from him or her. Performance of the employee is then evaluated based on the established relationship between the cost and the benefit. Cost accounting method of evaluation has vast potential as increasingly firms are converting their training departments into profit centres. Profit centres concept demands cost benefit analysis.

7.2.4 Behaviourally Anchored Rating Scales

Behaviourally anchored scales, sometimes called behavioural expectation scales, are rating scales, whose scale points are determined by statements of effective and ineffective behaviours. They are said to be behaviourally anchored in that the scales represent a range of descriptive statements of behaviour varying from the least to the most effective. A rater must indicate which behaviour on each scale best describes an employee’s performance. Behaviourally anchored rating scales have the following features.

•  Areas of performance to be evaluated are identified and defined by the people who will use the scales
• The scales are anchored by descriptions of actual job behaviour that, superiors agree, represent specific levels of performance. The result is a set of rating scales in which both dimensions and anchors are precisely defined.
• All dimensions of performance to be evaluated are based on observable behaviours and the job being evaluated since BARS are tailor- made for the job.
• Since the raters who will actually use the scales are actively involved in the development process, they are more likely to be committed to the final product.

BARS were developed to provide results which subordinates could use to improve performance. Superiors would feel comfortable to give feedback to the raters.

7.2.5 360° Performance Appraisal.

This is a new concept in performance appraisal, where the feedback is collected from all around – the employee, the superior, the subordinates, the peer group, and the customers. The evaluation is very comprehensive in terms of the employee’s skills, abilities, styles, and job –related competencies this system has the following advantages:

1. Higher validity and reliability of the evaluation.
2. Self – evaluation by the employees gets compared with the perception of others
3. Helps in maximizing employee potential in the face of challenges.

8. SUMMARY

Performance appraisal refers to the assessment of an employees’ actual performance, behaviour on job, and his or her potential for future performance. It’s a real challenge for the higher level management to make the appraisal system more pragmatic in order to ensure that people trust in the system. Also the system should be more developmental rather than punitive in nature.

REFERENCES

1. Dinkar Pagare, Business Organisation and Management, Published by Sultan chand & Sons, Reprint 2002, ISBN 81-7014-675-5,P 406-412.
2. Dr.T.N.Chhabra, Principles & Practice of Management, Published by Dhanpat Rai & Co.(P)Ltd,Reprint 2006,ISBN: 81-7700-032-2, p 410-419.
3. Mamoria .C/B and Gankar.S.V, Personnel Management, Published by Himalaya Publishing House, 23rd Edition, 2003, 689-740.