What is the Performance Appraisal

What is the PA

The performance appraisal is the process of assessing employee performance by way of comparing present performance with already established standards which have been already communicated to employees, subsequently providing feedback to employees about their performance level for the purpose of improving their performance as needed by the organisation.

As said above the very purpose of performance uprising is to know performance of employee, subsequently to decide whether training is needed to particular employee or to give promotion with additional pay hike. performance appraisal is the tool for determining whether employee is to be promoted, demoted or sacked ( remove ) in case of very poor performance and no scope for improvement.

Every corporate sector uses performance appraisal as a tool for knowing about the employee and take decisions about particular employee. for the purpose of performance appraisal of employees there are different methods under the category of traditional methods and modern methods which are discussed in following chapters.

What is Performance?
What does the term performance actually mean? Employees are performing well when they are productive. Productivity implies both concern for effectiveness and efficiency, effectiveness refers to goal accomplishment. However it does not speak of the costs incurred in reaching the goal. That is where efficiency comes in. Efficiency evaluates the ratio of inputs consumed to outputs achieved. The greater the output for a given input, the greater the efficiency. It is not desirable to have objective measures of productivity such as hard data on effectiveness, number of units produced, or percent of crimes solved etc and hard data on efficiency (average cost per unit or ratio of sales volume to number of calls made etc.).

In addition to productivity as measured in terms of effectiveness and efficiency, performance also includes personnel data such as measures of accidents, turnover, absences, and tardiness. That is a good employee is one who not only performs well in terms of productivity but also minimizes problems for the organisation by being to work on time, by not missing days, and by minimizing the number of work-related accidents.

What is Appraisal?

Appraisals are judgments of the characteristics, traits and performance of others. On the basis of these judgments we assess the worth or value of others and identify what is good or bad. In industry performance appraisal is a systematic evaluation of employees by supervisors. Employees also wish to know their position in the organization. Appraisals are essential for making many administrative decisions: selection, training, promotion, transfer, wage and salary administration etc. Besides they aid in personnel research.

Performance Appraisal thus is a systematic and objective way of judging the relative worth of ability of an employee in performing his task. Performance appraisal helps to identify those who are performing their assigned tasks well and those who are not and the reasons for such performance.

Definitions:

Performance appraisal has been defined by different scholars in various ways. Some of the important definitions are as follows:

Dale S. Beach, "Performance appraisal is systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development".

Randall S. Schuler, "Performance appraisal is a formal, structured system of measuring and evaluating an employees job, related behaviour and outcomes to discover how and why the employee is presently performing on the job and how the employee can perform more effectively in the future so that the employee, organisation, and society all benefit."

Heyel, "It is the process of evaluating the performance and qualifications of the employees in terms of the requirements of the job for which he is employed, for purposes of administration including placement, selection for promotions, providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally."

Dale Yoder, ''Performance appraisal includes all formal procedures used to evaluated personalities and contributions and potentials of group members in a working organisation. It is a continuous process to secure information necessary for making correct and objective decisions on employees."

Performance appraisal from employee point of view - "A performance appraisal is meant to help employees realise their strengths and shortcomings and receive a compensation accordingly."

Process of PA

1.Establishing performance standards

The first step in the process of performance appraisal is the setting up of the standards which will be used to as the base to compare the actual performance of the employees. This step requires setting the criteria to judge the performance of the employees as successful or unsuccessful and the degrees of their contribution to the organizational goals and objectives. The standards set should be clear, easily understandable and in measurable terms. In case the performance of the employee cannot be measured, great care should be taken to describe the standards.

2.Communicating the

standards
Once set, it is the responsibility of the management to communicate the standards to all the employees of the organization. The employees should be info

rmed and the standards should be clearly explained to the employees. This will help them to understand their roles and to know what exactly is expected from them.

The standards should also be communicated to the appraisers or the evaluators and if required, the standards can also be modified at this stage itself according to the relevant feedback from the employees or the evaluators.

3.Measuring the actual perf

ormance
The most difficult part of the Performance appraisal process is measuring the actual performance of the employees that is the work done by the employees during the specified period of time. It is a continuous process which involves monitoring the performance throughout the year. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not affect the outcome of the process and providing assistance rather than interfering in an employees work.

4.Comparing actual performance with desired performance
The actual performance is compared with the desired or the standard performance. The comparison tells the deviations in the performance of the employees from the standards set. The result

can show the actual performance being more than the desired performance or, the actual performance being less than the desired performance depicting a negative deviation in the organizational performance. It includes recalling, evaluating and analysis of data related to the employees’ performance.

5.Discussin

g results [Feedback]
The r

esult of

the appraisal is communicated and discussed with the employees on on

e-to-one basis. The focus of this discussion is on communication and listening. The results, the problems and the possible solutions are discussed with the aim of problem solving and reaching consensus. The feedback should be given with a positive attitude as this can have an effect on the employees’ future performance. Performance appraisal feedback by managers should be in such way helpful to correct mistakes done by the employees and help them to motivate for better performance but not to demotivate. Performance feedback task should be handled very carefully as it may leads to emotional outburst if it is not handing properly. Sometimes employees should be prepared before giving them feedback as it may be received positively or negatively depending upon the nature and at

titude of employees.

A research conducted by TJinsite, underlined that in an effective organisation, assignments and projects are monitored continually. According to 46% of surveyed organisations, ongoing monitoring - periodic reviews and managerial feedback - provides the opportunity to check how well employees are meeting pr

e-determined standards and to make changes in unrealistic or problematic standards.

5 ways to give negative feedback to employees

Feedback at work is important for an individual's development. However, some people are over-sensitive to negative feedback, which makes it crucial for managers and leaders to understand how to convey it. ET's Rica Bhattacharyya talks to some experts.

1) Combine negative & positive
The ideal way of giving feedback to someone who's extremely emotional

is to go for the sandwich method. Sandwich the negative feedback between two layers of positive feedback.

This helps in softening the impact of the negative feedback. By starting and ending in positive words, you ensure that the negative feedback has the right impact.

2) Be objective
It is important that you ensure that the person receiving the feedback knows that the feedback is not personal vendetta. Such kind of fundamental attribution error the employee may have ,linking the negative feedback to the person giving it. So, if you ask someone reporting to you the reason for being late, she/he might interpret that you are a control freak. Sadly, nearly all the time, the attribution strains the relationship between the two parties.

3) Don't use harsh words
Rather than telling someone outright that they are bad at something, it is better when you word it in a less harsh manner, and also provide suggestions and solutions to help them get better at what they are currently bad at.Sometimes, the most hurtful sentences are perceived in a way which makes it seem threatening and derogatory. The key is to make the employee feel safe. Only when s/he feels safe, they will be in a state of mind to understand and appreciate what you are saying.

4) Importance of feedback
One should begin by highlighting the importance of feedback — both positive as well as negative — in a professional's life.You could then follow that up with an example of how constructive feedback has helped you or someone you know, or the said employee knows, positively and made that person a better professional. While doing this, always make sure that your tone is calm and soft and like that of a mentor, rather than a rude, condescending or angry one.

5) Give feedback in private for sensitive people
With emotional people, it is also important that you always give feedback in private. Emotions are a result of a person's sensitivity, and negative or constructive feedback is usually a very sensitive topic with highly emotional people. Giving feedback to such people in front of a room full of people can have an adverse impact.

6.Decision-making

The purpose of conducting employee performance appraisal is for making decisions about employees without any bias by the HR manager. Decision-making by HR managers about employees rewarding, promotions, demotions, transfers and sometimes suspensions/dismissal of employees are depended upon the employee performance appraisal. The decision taken by HR manager should match exactly with performance appraisal results of employees to avoid grievance or disturbances in between them, as they affects overall performance of the organisation.

Five ways to deal with a poor appraisal

Bad appraisals, like bad hair days (one of those days when nothing seems to be going right), happen to the best of us. Quitting is not a solution. Rather, take a good look at your performance and concentrate on the course ahead.

Look Within: The first step in dealing with a bad appraisal is to keep an honest mindset and introspect about your performance. "First ask yourself the question: 'What is wrong with me?'. Once you attack that, other things usually fall into place," says Dabur India HR head A Sudhakar.

Talk to the Boss: Speak to the boss about the performance review. "There is a good chance your boss may not have remembered critical activities and initiatives you have undertaken," says Meenakshi Roy, senior vice president, human resource, Reliance Broadcast Network.

Take it in your Stride: There is a good chance that your boss' critical evaluation is spot on. "Try never to take these critiques personally and quit. That may be your biggest mistake. Consider consulting another senior colleague or a mentor," says Roy.

Plan Ahead: "Be actively involved in setting your targets for the year ahead based on your strengths," says S Roy, a midlevel manager in an IT firm . Also, periodically review your performance with your boss. That way, there will be fewer unpleasant surprises.

Move on Gracefully: At times, reasons not connected with your performance affect the appraisal you deserve. "You can bring up the issue with your bosses. But if nothing comes of it, it's time to move on," says Sudhakar. But don't make an ugly exit. "You never know when it can come back to haunt you," he adds.

5 ways to discard tag as poor performer

Nobody wants to be seen as a poor performer. There always a reason why you're being perceived that way and it is your job to find out the reason.

1) Find the Root Cause
The first step towards shedding the tag is to dig deep and find out where the poor performance stems from. Is it lack of skill to do the job or is it lack of motivation to perform? Once you know and accept why you're underperforming, it becomes relatively easy to take corrective action.

2) Seek feedback
Seek constant 360-degree feedback to understand your shortcomings and work on them. Analysing feedback in a positive manner will help you grow professionally and personally. Take criticism constructively and learn from past mistakes.

3) Take Initiative & Deliver
If it is lack of ability or skill, you must take the initiative to train yourself on the particular skill you lack. Have an honest conversation with your manager and let her/him know that you need training to improve your skills, if that is what you're lacking. When an employee is proactive, managers are more than happy to help. Once you've been trained, apply your learnings to the task at hand. Delivering consistently helps you come out of the shadow of being a poor performer.

4) Work with High Performers
While working in teams or on group projects, seek to work with highperforming team members, or those whose work has been responded to positively in the past. This will help you learn from their experiences, as well as showcase your work in a positive light.

5) Take Small Steps
The label of a poor performer comes when you haven't been delivering over a period of time. It is not easy to get rid of it. However, the quickest way of doing so is to perform well at smaller tasks that are more short term in nature. A number of such small wins will help you be known as a good performer. When you become consistent, it leads to a change in how people see you.

Objectives of PA

Objectives of Performance Appraisal

The main objective of performance appraisals is to measure and improve the performance of employees and increase their future potential and value to the company. Other objectives include providing feedback, improving communication, understanding training needs, clarifying roles and responsibilities and determining how to allocate rewards.

Providing Feedback. Providing feedback is the most common justiﬁcation for an organization to have a performance appraisal system. Through its performance appraisal process the individual learns exactly how well he/she did during the previous twelve months and can then use that information to improve his/her performance in the future. In this regard, performance appraisal serves another important purpose by making sure that the boss’s expectations are clearly communicated.

Facilitating Promotion Decisions. Almost everyone in an organization wants to get ahead. How should the company decide who gets the brass rings? Performance appraisal makes it easier for the organization to make good decisions about making sure that the most important positions are ﬁlled by the most capable individuals.

Rightsizing or Downsizing Decisions. If promotions are what everybody wants, layoffs are what everybody wishes to avoid. But when economic realities force an organization to downsize, performance appraisal helps make sure that the most talented individuals are retained and to identify poor performers who effects the productivity of the organisation. (India's largest software services provider TCS axed 1,000 jobs in the country due to non-performance by its employees. Jan 15, 2015, PTI)

INDIA: Technology firm cognizant uses annual performance appraisal system to assess its employees for the purpose of retaining talent and for Compensation management. During its annual performance appraisal of the employees, the firm has asked its employees identified as underperformers to leave the organisation. Sources said there were more than 500 'underperformers' in the list, this could not be verified.

Ericsson lays off 22 executives in India,

Feb, 2012.
The Indian arm of the world's largest telecoms gearmaker, Ericsson, is trimming and redeploying staff as it faces lukewarm operator spends in a fiercely competitive market.

17 Apr, 2013. ET.
Nearly 22 executives across categories have been fired on performance grounds and another 100 are likely to be transferred to sister organisations like Ericsson India Global Services, Ericsson Supply Site Jaipur, R&D centres and the regional technical centres (RTCs) to boost efficiencies, a top company executive aware of the development .

60% employees say performance appraisals are a waste of time, 70% say no idea how they are evaluated: Survey

Mar 17, 2017

Organisations need to make staff appraisals more transparent and useful as most employees are neither fully conversant with the process nor do they see them as a worthy task to perform.

Majority of the employees find performance reviews in their organisations opaque, cumbersome and a waste of time, reveals a TimesJobs survey, 'The Performance Review Puzzle', of more than 1,200 employees in various kinds of organisations.

Sixty per cent employees said the performance review was a waste of time.

Most employees are not even fully aware of the process of evaluation. Seventy per cent said they did not know how they were evaluated. Not surprisingly, 85 per cent were not aware of the end-to-end process of performance review.

Ninety per cent found performance review forms complex and cumbersome.

Outcome of appraisals never left 35 per cent satisfied while 25 per cent had been rarely satisfied. Only 10 per cent said they were always satisfied. Thirty per cent were sometimes satisfied.

A huge 95 per cent said they were not trained by the human resource department to fill in the review form.

Encouraging Performance Improvement. How can anyone improve if he doesn’t know how he’s doing right now? A good performance appraisal points out areas where individuals need to improve their performance.

Motivating Superior Performance. This is another classic reason for having a performance appraisal system. Performance appraisal helps motivate people to deliver superior performance in several ways. First, the appraisal process helps them learn just what it is that the organization considers to be ‘‘superior.’’ Second, since most people want to be seen as superior performers, a performance appraisal process provides them with a means to demonstrate that they actually are. Finally, performance appraisal encourages employees to avoid being stigmatized as inferior performers (or, often worse, as merely ‘‘average’’).

Setting and Measuring Goals. Goal setting has consistently been demonstrated as a management process that generates superior performance. The performance appraisal process is commonly used to make sure that every member of the organization sets and achieves effective goals.

Counseling Poor Performers. Not everyone meets the organization’s standards. Performance appraisal forces managers to confront those whose performance is not meeting the company’s expectations.

Determining Compensation Changes. This is another classic use of performance appraisal. Almost every organization believes in pay for performance. But how can pay decisions be made if there is no measure of performance? Performance appraisal provides the mechanism to make sure that those who do better work receive more pay.

Encouraging Coaching and Mentoring. Managers are expected to be good coaches to their team members and mentors to their proteges. Performance appraisal identiﬁes the areas where coaching is necessary and encourages managers to take an active coaching role.

Supporting Manpower Planning. Well-managed organizations regularly assess their bench strength to make sure that they have the talent in their ranks that they will need for the future. Companies need to determine who and where their most talented members are. They need to identify the departments that are rich with talent and the ones that are suffering a talent drought. Performance appraisal gives companies the tool they need to make sure they have the intellectual horsepower required for the future.

Determining Individual Training and Development Needs. If the performance appraisal procedure includes a requirement that individual development plans be determined and discussed, individuals can then make good decisions about the skills and competencies they need to acquire to make a greater contribution to the company. As a result, they increase their chances of promotion and lower their odds of layoff.

Determining Organizational Training and Development Needs. Would the organization be better off sending all of its managers and professionals through a customer service training program or one on effective decision making? By reviewing the data from performance appraisals, training and development professionals can make good decisions about where the organization should concentrate company-wide training efforts.

Validating Hiring Decisions. Is the company hiring stars, or is it ﬁlling itself with trolls? Only when the performance of newly hired individuals is assessed can the company learn whether it is hiring the right people.

Providing Legal Defensibility for Personnel Decisions. Almost any personnel decision—termination, denial of a promotion, transfer to another department—can be subjected to legal scrutiny. If one of these is challenged, the company must be able to demonstrate that the decision it made was not based on the individual’s race or handicap or any other protected aspect. A solid record of performance appraisals greatly facilitates legal defensibility when a complaint about discrimination is made.

Improving Overall Organizational Performance. This is the most important reason for an organization to have a performance appraisal system. A performance appraisal procedure allows the organization to communicate performance expectations to every member of the team and assess exactly how well each person is doing. When everyone is clear on the expectations and knows exactly how he is performing against them, this will result in an overall improvement in organizational success.

Training Needed
These appraisals also identify the necessary training and development needs to employees to close the gap between current performance and desired performance.

Additional objectives Performance appraisal:

To review the performance of the employees over a given period of time
To judge the gap between the actual and the desired performance.
To help the management in exercising organizational control.
Helps to strengthen the relationship and communication between superior – subordinates and management – employees.
To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future.
To provide feedback to the employees regarding their past performance.
Provide information to assist in the other personal decisions in the organization.
Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.
To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.
To reduce the grievances of the employees.

· How to get best performance appraisal from your boss?

· 1) Decode what's your job profile

· A great place to start is a detailed list of job duties or, if it is available, an official job description, from your manager or human resources department. It's better to start off with clarity as to what you are expected to deliver. It will channelise your actions in that direction and get you maximum output.

· 2) Engage yourself in the process

· Be an active participant in establishing your goals from the start. Focus on key objectives and define a plan that makes sense for you and your employer. Be engaged all along, it's a good and helpful practice.

· 3) Set reasonable goals

· When establishing goals, make sure they are meaningful. There should be value in doing a particular activity. Each goal must be relevant to the work you do each day and should be mutually agreed upon by you and your manager. Also, going over-board with goals will only impress your boss for that moment, remember. So sign up for goals which are reasonable, and gives you a sense that you can achieve them.

· 4) View goals as a project plan

· Make your goals your mission for the year. Keep goals current, track progress and contributions, and update goals as appropriate to reflect any changes in your role or responsibilities. Remember that although goals are set to achieve certain work-based objectives, they can also yield personal rewards in the form of professional and developmental growth and greater earnings potential.

· 5) Take note of your work daily

· No one pays closer attention to your work than you do. The annual performance review, and the promotion or salary increase that often goes with it, can be enhanced significantly if you highlight your accomplishments clearly and make a case for yourself.

So, as you work, document your accomplishments along the way and let your boss know when you have reached established milestones. Good time don't stay always so, if you reach a stumbling block along the way, seek advice on how to best resolve the issue.

· 6) Show an interest in additional training

· If you don't have access to the tools or training necessary to achieve a particular objective, be sure to ask. Your employer will see that you want to improve the quality of your work and are interested in professional growth. Additional training will make you more valuable to the organization and set you up for the next step in your career.

· 7)Talk to your boss on performance

· Have an open dialogue with your boss throughout the year so you have a better sense of where you stand and how your progress is being perceived. Don't leave all of this discussion for the annual review.

Try to conduct brief, informal discussions throughout the performance review period. Taking time to check shows your boss that you are interested in performing well and are working hard toward achieving goals.

· 8) Share positive feedback

· Feedback from colleagues is also valuable when you are preparing for a review. If someone sends you a thank you via e-mail or on paper, keep it on file. If someone says something complimentary, ask him or her to put it in writing.

· 9) Utilise performance review feedback

· When you get constructive feedback during a performance review, listen to it carefully and objectively. If part of the feedback is difficult to hear, try not to appear defensive.

Instead, take time to consider what was said and try to make improvements in your work habits to avoid similar comments in the future. Companies value employees who can accept professional guidance.

Traditional Method of PA

1.Rating Scales Method

Rating Scales Method is commonly used method for assessing the performance of the employees and well-known traditional method of performance appraisal of employees. Many corporations and companies example in the country India, telecommunications company likely airtel and US IT companies like Dell Corporation are using this method for evaluating the employees and subsequently take decisions on concerned employee.

Depending upon the job of employee under this method of appraisal traits like attitude, performance, regularity, accountability and sincerity etc,are rated with scale from 1 to 10. 1 indicates negative feedback and 10 indicates positive feedback as shown below.

Attitude of employee towards his superiors, colleagues and customers

Extremely Excellent

poor

Regularity in the job

Extremely outstanding

poor

Under this method of performance appraisal, employee may be assessed by his superiors, colleagues, subordinates or sometimes by his customers which all depends on nature of the company or job which is added where the employee. Appraiser is a person who appraises employee will give rating for every trait given by marking or choosing number basing on his observation and satisfaction. ultimately all numbers chosen or marked will be added to determine highest score gained by employee. Employee who scored more points will be treated as top performer following descending scored employees will be treated as low performer and the least scored employee will be treated as non-performers.

2. ESSAY APPRAISAL METHOD
This traditional form of appraisal, also known as “Free Form method” involves a description of the performance of an employee by his superior. The description is an evaluation of the performance of any individual based on the facts and often includes examples and evidences to support the information. A major drawback of the method is the inseparability of the bias of the evaluator.

Under this method, the rater is asked to express the strong as well as weak points of the employee’s behavior. This technique is normally used with a combination of the graphic rating scale because the rater can elaborately present the scale by substantiating an explanation for his rating. While preparing the essay on the employee, the rater considers the following factors:

Job knowledge and potential of the employee;
Employee’s understanding of the company’s programmes, policies, objectives, etc.;
The employee’s relations with co-workers and superiors;

How is technology helping transform performance appraisal and management?

The most common cliché is “performance appraisal is dead“. What it means is the annual performance appraisal is dead and most organisations today are adopting regular, realtime, anecdotal and casual feedback. Just as young people do not write e-mails anymore they WhatsApp similarly we don't have to write a long performance appraisal at the end of the year. Companies are moving to real-time performance appraisal and that is why in our system everything is shareable and realtime. And technology plays the most crucial role in providing the platform to have fast and quick and informal communication.

The employee’s general planning, organizing and controlling ability;
The attitudes and perceptions of the employee, in general.

Essay evaluation is a non-quantitative technique. This method is advantageous in at least one sense, i.e., the essay provides a good deal of information about the employee and also reveals more about the evaluator. The essay evaluation method however, suffers from the following limitations:

It is highly subjective; the supervisor may write a biased essay. The employees who are sycophants will be evaluated more favorably then other employees.
Some evaluators may be poor in writing essays on employee performance. Others may be superficial in explanation and use flowery language which may not reflect the actual performance of the employee. It is very difficult to find effective writers nowadays.
The appraiser is required to find time to prepare the essay. A busy appraiser may write the essay hurriedly without properly assessing the actual performance of the worker. On the other hand, appraiser takes a long time, this becomes uneconomical from the view point of the firm, because the time of the evaluator (supervisor) is costly.

3. RANKING METHOD
How do we use the ranking method? Under the ranking method, the manager com-pares an employee to other similar employees, rather than to a standard measurement. An offshoot of ranking is the forced distribution method, which is similar to grading on a curve. Predetermined percentages of employees are placed in various performance categories, for example, excellent,above average, average, below average, and poor,. The employees ranked in the top group usually get the rewards (raise, bonus, promotion), those not at the top tend to have the reward withheld, and those at the bottom sometimes get punished. In Self-Assessment and Skill Builder 8-1, you are asked to rank the performance of your peers.

Why and when do we use the ranking method? Managers have to make evaluative decisions, such as who is the employee of the month, who gets a raise or promotion, and who gets laid off. So when we have to make evaluative decisions, we generally have to use ranking. However, our ranking can, and when possible should, be based on other methods and forms. Ranking can also be used for developmental purposes by letting employees know where they stand in comparison to their peers—they can be motivated to improve performance. For example, when one of the authors passes back exams, he places the grade distribution on the board. It does not in any way affect the current grades—but it lets students know where they stand, and he does it to motivate improvement.

4. PAIRED COMPARISON

A better technique of comparison than the straight ranking method, this method compares each employee with all others in the group, one at a time. After all the comparisons on the basis of the overall comparisons, the employees are given the final rankings.

5. CRITICAL INCIDENTS METHODS

This technique of performance appraisal was developed by Flanagan and Burns.
The manager prepares lists of statements of very effective and ineffective behavior of an employee. These critical incidents or events represent the outstanding or poor behavior of employees on the job. The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior. At the end of the rating period, these recorded critical incidents are used in the evaluation of the workers’ performance. An example of a good critical incident of a sales assistant is the following:

July 20 – The sales clerk patiently attended to the customers complaint. He is polite, prompt, enthusiastic in solving the customers’ problem.

On the other hand the bad critical incident may appear as under:

July 20 – The sales assistant stayed 45 minutes over on his break during the busiest part of the day. He failed to answer the store manager’s call thrice. He is lazy, negligent, stubborn and uninterested in work.

This method provides an objective basis for conducting a thorough discussion of an employee’s performance. This method avoids recency bias (most recent incidents get too much emphasis). This method suffers however from the following limitations:

Negative incidents may be more noticeable than positive incidents.
The supervisors have a tendency to unload a series of complaints about incidents during an annual performance review session.
It results in very close supervision which may not be liked by the employee.
The recording of incidents may be a chore for the manager concerned, who may be too busy or forget to do it.

6. CONFIDENTIAL REPORT SYSTEM

Confidential report system is well known method of performance appraisal system mostly being used by the the Government organisations and in the Indian Judiciary. In this method of appraising system, subordinate is observed by his superiors regarding his performance in the job and on his duties done. Thereafter Superior writes confidential report on his performance, mainly on his behaviour in the organisation and conduct and remarks if any. confidential reports will be kept confidential and will not be revealed to anyone and finally confidential reports will be forwarded to the top management officials for taking decision against person on whom confidential report has made. Confidential reports are the main criteria for promoting or transferring of any employee mainly in the government sector. All governmental organisations example judiciary, police Department and other government departments in the India are using confidential reports method as a tool to know about the employee and to take any decision connecting to him.

Procedure of confidential report system

The superiors who appraises their subordinates performance, behaviour and other key issues will be kept in the form of writing on paper, which is called as confidential report. Confidential report should not be sent openly on a paper, it must be kept in a sealed cover to send it to decision-making authorities. Only authorised persons are allowed to open the sealed covers which consists of confidential reports. Confidential reports shall not be handed over in loose sheets to the subordinates.

Key factors assessed in Confidential Report writing

Character and conduct of an employee
Absenteeism of an employee
Knowledge of an employee
His nature and quality of work
Punctuality of employee
Unauthorised absenteeism or leave without permission
Behaviour of an employee with colleagues, superiors and with public
Ability of supervision and controlling
His/her integrity and honesty
If any complaints against employee

Annual Performance Appraisal Reports Must Be Communicated To Public Servants, Reiterates SC [Read Judgment]

The Supreme Court has reiterated that entries in an Annual Performance Appraisal Report must be communicated to a public servant.

In Pankaj Prakash vs. United India Insurance Co Ltd., the case of the employee was that the entries in his Annual Performance Appraisal Report for 2010-11 and 2011-12 were not disclosed, as a result of which he was unable to submit a representation at the material time. The writ petition, which he had filed before the Allahabad High Court was dismissed on the ground that, absent an adverse entry or an entry below the benchmark, the failure to communicate did not result in an actionable grievance.

The bench comprising Justice DY Chandrachud and Justice Indira Banerjee noted that a three judge bench of the Supreme Court in Sukhdev Singh vs. Union of India has held that, every entry in ACR of a public servant must be communicated to him/her within a reasonable period.

The court said that, since this judgment is declaratory in nature, it cannot be contended that the decision having been implemented from 2013-14, it has no
application for the earlier years. The bench said:

"Admittedly, for one of the years under consideration (2011-12) for the promotional exercise for 2014-15, the appellant was graded a "B", while for the
subsequent two years, he was graded an "A". Consequently, the fact that the appellant was given a lower grading for 2011-12 would materially affect whether or not he should be promoted from Scale III to Scale IV for the year in question. The non-communication of the entries is, therefore, a matter in respect of which a legitimate grievance can be made by the appellant, particularly having regard to the position in law laid down in Dev Dutt (supra) and Sukhdev Singh (supra)."

The bench then disposed of the appeal by directing the authorities to consider the representation, if any, that may be submitted by the employee in respect of the grading which was assigned to him for the relevant years which were taken into consideration during the promotional exercise for 2014-15.

https://www.livelaw.in/top-stories/annual-performance-appraisal-reports-must-be-communicated-to-employees-146343

Concern High Court is empowered for evaluating performance of a judicial officer [Article 235 of the Indian Constitution]

Judgement: View / download

IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment Reserved on : 12.04.2018
Judgment Pronounced on: 30.08.2018

W.P.(C) 2759/2000
AND

CM APPL. 19808/2017

AJAIB SINGH DATEER ..... Petitioner, Through Dr. M.P. Raju with Ms. C. Kanta Dateer and Mr. Gurpreet Singh, Advs.

versus

LT. GOVERNOR & ORS .....Respondents, Through Mr. Viraj R. Datar, Adv. for DHC.

Concern High Court is empowered for evaluating performance of a judicial officer [Article 235 of the Indian Constitution]
The petitioner, who was awarded ‘C’ grading with the remark “doubtful integrity”, had challenged his ACR (Annual confidential reports) for the year 1995 on the ground that it was “entirely unfounded” as it was based entirely on hearsay and not any objective material.

It held that by virtue of Article 235 of the Constitution of India, the task of considering and evaluating performance of a judicial officer with respect to judicial or quasi-judicial duties and responsibilities, is that of the High Court.

The performance evaluation of character and integrity of the judicial officer can only be done by his parent organization i.e. the High Court and this “primary task” cannot be said to be supplanted, the Court held.

“The assessment and evaluation of the performance of such officials is merely an input for the overall determination.”, High Court clarified.

The Court, hence, concluded that there was no infirmity or illegality in the procedure adopted by the Full Court while recording ‘C’ grading with “doubtful integrity” in respect of the petitioner for the year 1995.

The Delhi High Court has dismissed a petition filed by a retired judicial officer challenging the ‘C’ grade given to him in his Annual Confidential Report (ACR).

7. CHECKLIST METHOD
The rater is given a checklist of the descriptions of the behaviour of the employees on job. The checklist contains a list of statements on the basis of which the rater describes the on the job performance of the employees.

Another simple type of individual evaluation method is the checklist. A checklist represents, in its simplest form, a set of objectives or descriptive statements about the employee and his behavior. If the rater believes strongly that the employee possesses a particular listed trait, he checks the item; otherwise, he leaves the item blank. A more recent variation of the checklist method is the weighted list. Under this, the value of each question may be weighted equally or certain questions may be weighted more heavily than others. The following are some of the sample questions in the checklist.

Is the employee really interested in the task assigned? Yes/No

Is he respected by his colleagues (co-workers) Yes/No

Does he give respect to his superiors? Yes/No

Does he follow instructions properly? Yes/No

Does he make mistakes frequently? Yes/No

8. GRAPHIC RATING SCALE

Example of Graphic Rating Scales Method

Performance Trait	Excellent	Good	Average	Fair	Poor
Attitude	5	4	3	2	1
Knowledge of Work	5	4	3	2	1
Managerial Skills	5	4	3	2	1
Team Work	5	4	3	2	1
Honesty	5	4	3	2	1
Regularity	5	4	3	2	1
Accountability	5	4	3	2	1
Interpersonal relationships	5	4	3	2	1
Creativity	5	4	3	2	1
Discipline	5	4	3	2	1

This is the very popular, traditional method of performance appraisal. Under this method, core traits of employee pertaining to his job are carefully defined like Attitude, Knowledge of Work, Managerial Skills, Team Work, Honesty, Regularity, Accountability, Interpersonal relationships, Creativity and Discipline etc. Theses traits are allotted with with numerical scale to tabulate the scores gained by appraisee (employee) in performance assessment relating to his job by appraiser (employer) and sum-up to determine the best performer. Appraiser ticks rating of particular trait depending upon his endeavor in his job. Score vary form employee to employee depending up on his performance levels and endeavor in his job.

This method is popular because it is simple and does not require any writing ability. The method is easy to understand and use. Comparison among pairs is possible. This is necessary for decision on salary increases, promotion, etc.

Companies like DELL, Maruthi Suzuki India Ltd and airtel are using this graphic rating scale method to appraise performance of their employees in there jobs and to take decisions regarding the matters concerned to employees

9. FORCED DISTRIBUTION

The system is 17 to 18 years old, and most big organisations started waking up to this form of performance appraisal in the late '90s. The bell curve is nothing but a graphical representation of the fact that everybody's performance is not the same. Some employees will be outstanding, some average, and others at the bottom.
Irrespective of whether or not the bell curve is the most appropriate representation of performance or human behaviour, some believe that it is the most viable option, especially in services-driven sectors, which have large workforces.

The system requires the managers to evaluate each individual, and rank them typically into one of three categories (excellent, good, poor). The system is thought to be relatively widely-used, but remains somewhat controversial due to the competition it creates, and also the reality that not all employees will fit neatly into one of the categories and might end up in a category that does not reflect their true performance. One of the first companies to use this system was General Electric, in the 1980s.

--------Businessdictionary.com

In India, big Indian employers including Infosys, Wipro, ICICI Bank and Aditya Birla Group evaluate lakhs of employees on the basis of this system.

Back home, big Indian employers including InfosysBSE -0.47 %, WiproBSE 0.63 %, ICICI BankBSE 0.33 % and Aditya Birla Group evaluate lakhs of employees on the basis of this system.

Read more at:
http://economictimes.indiatimes.com/articleshow/36119596.cms?
utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Forced ranking is a method of performance appraisal to rank employee but in order of forced distribution.

For example, the distribution requested with 10 or 20 percent in the top category, 70 or 80 percent in the middle, and 10 percent in the bottom.

The top-ranked employees are considered “high-potential” employees and are often targeted for a more rapid career and leadership development programs.

In contrast, those ranked at the bottom are denied bonuses and pay increases. They may be given a probationary period to improve their performance.

Facts: many companies have been discarding this age-old appraisal system since it has got few drawbacks like lack of transparency understanding the process of assessment of employee, some people believe that this method treats employees as machines and some feel that this system doesn't fit to present trend of management. Companies which have dropped this method of addressing system are Microsoft, Google and Adobe.

Modern Methods of PA

ASSESSMENT CENTRES

An assessment centre is a place to evaluate an individual potentiality and performance, so as to position he/she in the core functional areas. normally, organisations outsource assessment centres instead of making them by their own.

[This method of performance appraisal is being opted by the RBI (Reserve Bank of India) for assessment of its officers]

An assessment center typically involves the use of methods like social/informal events, tests and exercises, assignments being given to a group of employees to assess their competencies to take higher responsibilities in the future. Generally, employees are given an assignment similar to the job they would be expected to perform if promoted. The trained evaluators observe and evaluate employees as they perform the assigned jobs and are evaluated on job related characteristics.

The major competencies that are judged in assessment centers are interpersonal skills, intellectual capability, planning and organizing capabilities, motivation, career orientation etc. assessment centers are also an effective way to determine the training and development needs of the targeted employees.

Nearly 30% companies seek assessment center services while moving an employee from executive position to managerial position. 20% companies said they use the center's services when seeking a position on senior management level.

As per the TJinsite, the premium research website promoted by TimesJobs.com survey, more than 80% of the surveyed employers predict an increased use of assessment centres in near future because of their expertise and unbiased in assessing an individual fit and biggest limitation comes from the lack of skilled assessors to perform the assessment task effectively.

Facts [+]

AssessPeople Ltd. is a workforce assessment company, based at Chennai, India, and having wings at all metros across country. They are a pioneer in India to use internet as a platform to design, administer, and provide the results to organizations.

What they do?

Pioneer in workforce assessment services since 1999
Assessment services for

High School Students to Senior Managers
Individual and team assessments

Assessment of aptitudes, abilities, skills, behaviours, competencies, knowledge, morale, attitude and work values
Multilingual Assessments
Biometrics, Photo, Phone2web
End2End Assessments
Organisation-wide Surveys

BEHAVIORALLY ANCHORED RATING SCALES

Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which combines the graphic rating scale and critical incidents method. It consists of predetermined critical areas of job performance or sets of behavioral statements describing important job performance qualities as good or bad (for eg. the qualities like inter-personal relationships, adaptability and reliability, job knowledge etc). These statements are developed from critical incidents.

In this method, an employee’s actual job behaviour is judged against the desired behaviour by recording and comparing the behaviour with BARS. Developing and practicing BARS requires expert knowledge.

A behaviorally anchored rating scale is an employee appraisal system where raters distinguish between successful and unsuccessful job performance by collecting and listing critical job factors. These critical behaviors are categorized and appointed a numerical value which is used as the basis for rating performance.

An Example of Behaviorally Anchored Rating Scale (BARS)

Performance	Points	Behavior
Extremely good	7	Can expect trainee to make valuable suggestions for increased sales and to have positive relationships with customers all over the country.
Good	6	Can expect to initiate creative ideas for improved sales.
Above average	5	Can expect to keep in touch with the customers throughout the year.
Average	4	Can manage, with difficulty, to deliver the goods in time.
Below average	3	Can expect to unload the trucks when asked by the supervisor.
Poor	2	Can expect to inform only a part of the customers.
Extremely poor	1	Can expect to take extended coffee breaks and roam around purposelessly.

HUMAN RESOURCE ACCOUNTING METHOD

Human Resource Accounting is a method to measure the effectiveness of personnel management activities and the use of people in an organization.HRA is the process of Assigning, budgeting, and reporting the cost of human resources incurred in an organization, including wages and salaries and training expenses.

Human resources are valuable assets for every organization. Human resource accounting method tries to find the relative worth of these assets in the terms of money. In this method the Performance appraisal of the employees is judged in terms of cost and contribution of the employees. The cost of employees include all the expenses incurred on them like their compensation, recruitment and selection costs, induction and training costs etc whereas their contribution includes the total value added (in monetary terms). The difference between the cost and the contribution will be the performance of the employees. Ideally, the contribution of the employees should be greater than the cost incurred on them.

MANAGEMENT BY OBJECTIVES

The definition of MBO, as expressed by its foremost proponent, Dr. George S. Odiorne,

“Management by objectives is a process whereby the superior and subordinate managers of an organisation jointly identify its common goals, define each individual’s major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members.”

Much of the initial impetus for MBO was provided by Peter Drucker (1954) and by Douglas McGregor (1960). Drucker first described management by objectives in 1954 in the Practice of Management. Drucker pointed the importance of managers having clear objectives that support the purposes of those in higher positions in the organisation. McGregor argues that by establishing performance goals for employees after reaching agreement with superiors, the problems of appraisal of performance are minimised. MBO in essence involves the setting out
clearly defined goals of an employee in agreement with his superior. Carroll and Tosi (1973), in an extensive account of MBO, note its following characteristics:

The establishment of organisational goals.
The setting of individual objectives in relation to organisational goals.
A periodic review of performance as it relates to organisational goals. Effective goal-setting and planning by top management.
Organisational commitment.
Mutual goal-setting.
Frequent individual performance reviews.
Some freedom in developing means of achieving objectives.

MBO is, thus, a method of mutual goal-setting, measuring progress towards the goals, taking action to assure goal attainment, feedback, and participation. It is a resultoriented philosophy, enabling an employee to measure progress toward a goal which the employee often has helped to set. In the goal-setting phase of MBO, a superior and subordinate discuss job performance problems and a goal is agreed upon. Along with mutual goal-setting, a major component of MBO is the performance review session between the superior and subordinate, which takes place regularly to evaluate progress towards specified goals.

The key features of management by objectives are as under:

Superior and subordinate get together and jointly agree upon .the list the principal duties and areas of responsibility of .the individual’s job.
The subordinate sets his own short-term performance goals or .targets in cooperation with his superior.
They agree upon criteria for measuring and evaluating .performance.
From time to time, as decided upon, the superior and .subordinate get together to evaluate progress towards the .agreed-upon goals. At those meetings, new or modified goals .are set for the ensuing period.
The superior plays a supportive role. He tries, on a day-to-.day basis, to help the subordinate achieve the agreed upon .goals. He counsels and coaches.
In the appraisal process, the superior plays less of the .role of a judge and more of the role of one who helps the .subordinate attain the organisation goals or targets.

The MBO process

MBO as a mutual goal setting exercise is most appropriate for technical, professional, supervisory, and executive personnel. In these positions, there is generally enough latitude and room for discretion to make it possible for the person to participate in setting his work goals, tackle new projects, and discover new ways to solve problems. This method is generally not applied for lower categories of workers because their jobs are usually too restricted in scope. There is little discretionary opportunity for them to shape their jobs.

MBO may be viewed as a system of management rather than an appraisal method. A successful installation of MBO requires written mission statements that are prepared at the highest levels of top management. Mission statements provide the coherence in which top-down and bottom-up goal setting appear sensible and compatible. MBO can be applied successfully to an organisation that has sufficient autonomy, personnel, budget allocation, and policy integrity. Managers are expected to perform so that goals are attained by the organisation. Too often MBO is installed top-down in a dictatorial manner with a little or no accompanying training. If properly implemented, it serves as a powerful and useful tool for the success of managerial performance.

MBO is a tool that is inextricably connected with team building so that the work commitment of team members can be increased and their desire to excel in performance can be inspired. It is important to have effective team work among a group of managers or a group of subordinates. The group of employees or subordinates must be looked upon as a team that needs to be brought together. Goals should be set by manager-subordinate pairs, and also by teams. The basic superior subordinate relationship in an organisation is in no way undermined in this concept of team goal setting. Lines of responsibility, authority, and accountability remain clear.

Customer feedback method

This method is truly one of the modern methods of performance appraisal system. Customer feedback method is used, especially for sales staff who deal with sales activity in the organisation. Under this method of appraisal system, customer feedback is directly linked with employee performance. This method of assessment could be unbiased and reliable since customers who are outsiders may give correct judgement about employee performance than the insiders who are superiors.

Companies like Cognizant and Wipro software solutions are using customer feedback method to assess the performance of their sales staff in order to hike salaries.

Some industry experts say placing a higher weightage on customer feedback may fail to motivate employees because customer feedback may vary from customer to customer. Depending on the current state of mind, psychology and perception of the customers may give different feedback for same degree of sales service.

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