tools for measuring performance

8/14/2019 Tools for Measuring Performance

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TOOLS FORTOOLS FOR

MEASURINGMEASURINGPERFORMANCEPERFORMANCE



TWO TYPES OF APPROACHESTWO TYPES OF APPROACHES

n Traditional Approach - Primarily concerned with the overall

organization

and involved with past performance.

n Modern Approach - Viewed the employees as individuals and

forward looking through the use of goal setting.



Traditional MethodsTraditional Methods

n Graphic Rating Scales Method

n Confidential Report

n Straight Ranking Methodn Paired Comparison Method

n Forced Comparison Method

n

Grading Systemn Checklist Method

n Critical Incident Method



Modern MethodsModern Methods

n HR Scorecard

n HR Accounting

n Competency Mapping

n Assessment andDevelopment Centre

n 360 Degree Appraisal

n 540 Degree Appraisal

n Management by Objectives(MBO)

n Behaviorally AnchoredRating Scale (BARS)



Purposes of TraditionalPurposes of Traditional

Performance AppraisalPerformance Appraisal

n Promotion, separation, and transfer decisions

n Feedback to the employee regarding how the organization viewed

the employee's performance

n Criteria for evaluating the effectiveness of selection and

placement decisions

n Reward decisions, including merit increases, promotions, and

other rewards

n

Ascertaining and diagnosing training and development decisionsn Criteria for evaluating the success of training and development

decisions

n Information upon which work scheduling plans, budgeting, and

human resources planning can be used



GRAPHIC RATING SCALESGRAPHIC RATING SCALES

METHODMETHOD

n A form is used to evaluate the performance of

the employees

n A variety of traits may be used in this device,

the most common being quality and

quantity of work

n Easy to understand and use.

n Permits statistical tabulation of scores of

employees



CONFIDENTIAL REPORTSCONFIDENTIAL REPORTS

Descriptive report

n Prepared at the end of the year

n Prepared by the employee’s immediate

supervisor

n The report highlights the strengths and

weaknesses of employees

n Prepared in Government organizations

n

Does not offer any feedback to the



STRAIGHT RANKING METHODSTRAIGHT RANKING METHOD

n Rated all the employees doing a specific

job from best to poorest on a specific

criteria.

n Easy to select best and poor one, but it is

difficult identify moderate employee.



PAIRED COMPARISONS METHODPAIRED COMPARISONS METHOD

n Each worker is compared with all other

employees in a groupn For several traits paired comparisons are

made, tabulated and then rank is

assigned to each worker

n This method is not applicable when the

group is large



Forced D ist ribut ionForced D ist ribut ion MethodsMethods

nThe rater is asked to appraise the employee according toThe rater is asked to appraise the employee according to

predetermined distribution scale.predetermined distribution scale.

n

Two criteria used for rating are: job performance andTwo criteria used for rating are: job performance andpromotability.promotability.

nA five point performance scale is also used without mentioniA five point performance scale is also used without mentioni

any descriptive statements.any descriptive statements.nThe worker is placed between two extremes of “good” andThe worker is placed between two extremes of “good” and

““bad” performance.bad” performance.



GRADING SYSTEMGRADING SYSTEM

n In this method, performance of employeesare determined in advance and defined

as categories. The categories can begrade ‘A’ for an outsourcingperformance, grade ‘B’ for an excellentperformance, ‘C’ can be for average and

‘D’ for poor etc.



Checklist MethodChecklist Method

nA checklist is a set of object ives or descript iveA checklist is a set of object ives or descript ive

statem ents about the employee and his behavior.statem ents about the employee and his behavior.

nUnder weighted checklist , value of each quest ionUnder weighted checklist , value of each question

may be weighted.may be weighted.

nExample:Example:

nIs the employee really interested in the taskIs the employee really interested in the task

assigned?assigned?

Yes / NoYes / No



Crit ica l Incident TechniqueCrit ical Incident Technique

nManager prepares lists of statements of veryManager prepares lists of statements of very

effective and ineffect ive behavior of aneffective and ineffect ive behavior of an

employeeemployee

nThese crit ical incidents represent theThese crit ical incidents represent the

outstanding or poor behavior of theoutstanding or poor behavior of the

employeesemployees



Crit ica l Incident TechniqueCrit ical Incident Technique

Example:Example:

n

July 20 - Sales clerk patiently attended to the customersJuly 20 - Sales clerk patiently attended to the customerscomplaint. He is polite, prompt, enthusiastic in solvingcomplaint. He is polite, prompt, enthusiastic in solving

the customers’ problemthe customers’ problem

nJuly 20 - The sales assistant stayed 45 minutes beyondJuly 20 - The sales assistant stayed 45 minutes beyond

his break during the busiest part of the day. He failed tohis break during the busiest part of the day. He failed to

answer store manager’s call thrice. He is lazy, negligent,answer store manager’s call thrice. He is lazy, negligent,

stubborn and uninterested in workstubborn and uninterested in work



n Limitation of this technique are:Limitation of this technique are:nNegative incidents may be more noticeable than positiveNegative incidents may be more noticeable than positive

incidents.incidents.

nSupervisors have a tendency to unload a series of complaiSupervisors have a tendency to unload a series of complai

about incidents.about incidents.

nResults in very close supervision which may not be likedResults in very close supervision which may not be liked b

the employee.the employee.nThe recording of incidents may be a chore for the manageThe recording of incidents may be a chore for the manage

concerned who may be too busy or forget to do it.concerned who may be too busy or forget to do it.

Critical Incident TechniqueCritical Incident Technique



FREE ESSAY APPRAISAL METHODSFREE ESSAY APPRAISAL METHODS

n The supervisor continuously observes andwrites a report about employees

assessment.n Essay evaluation is a non-quantitative

technique of appraisal.

n

The essay method may suffer frompersonal and human bias.



Essay Eva luat ionEssay Eva luat ion

n

nThe rat er is asked t o express t he st rong asThe rat er is asked t o express t he st rong as

w ell as w eak point s of em ployee’s behavior w ell as w eak point s of em ployee’s behavior

nThe rat er considers t he em ployee’s :The rat er considers the em ployee’s :

nJob know ledge and pote nt ialJob know ledge and pote nt ial

nUnde rst and ing of com pany’s program s, policies,Unde rstanding of company’s program s, policies,

object ives et cobject ives etc

n

Relat ion w ith co-workers and supervisorsRelat ion w ith co-workers and supe rvisorsnPlann ing, organ izing an d cont rolling abilityPlanning, orga nizing and cont rolling ability

nAtt it ude and pe rcept ionAtt i tude and percept ion

n



Essay Eva luat ionEssay Eva luat ion

nThis method has the following limitations:This method has the following limitations:n

Highly subjectiveHighly subjective

nSupervisor may write biased essaySupervisor may write biased essay

nDifficult to find effective writersDifficult to find effective writers

nA busy appraiser may write the essay hurriedly withoutA busy appraiser may write the essay hurriedly without

assessing properly the actual performance of theassessing properly the actual performance of the

worker worker

nIf the appraiser takes a long time it becomesIf the appraiser takes a long time it becomes

uneconomical from the view point of the firmuneconomical from the view point of the firm



Group AppraisalGroup Appraisal

nEmployee is appraised by a group of appraisers.Employee is appraised by a group of appraisers.

nThe group consists of The group consists of

nImmediate supervisor of the employeeImmediate supervisor of the employee

nOther supervisors who have close contact with theOther supervisors who have close contact with the

employee’s work.employee’s work.

n

Manager or head of the departments.Manager or head of the departments.nConsultants or ClientsConsultants or Clients



Modern Approach - HR ScorecardModern Approach - HR Scorecard

n The balance scorecard provides a list of measures thatbalance the organizations internal and processmeasures with results, achievements and financial

measures.



HR AccountingHR Accounting

n HR accounting method attaches money value of a firmsinternal Human Resources and external customer’sgoodwill.

n Performance is judged in terms of costs andcontributions of employees.

n Ideally the contribution of the employees should begreater than the cost incurred on them.

n

When competent and well trained employees leave anorganisation, the human asset is decreased.



Competency MappingCompetency Mapping

n First popularized by Boyatzis (1982) with research resulton clusters of competencies:

“A capacity that exists in a personal that leads to

behaviour that meets the job demands within parametersof organizational environment, and that, in turn bringsabout desired results”



Assessment and Development CentreAssessment and Development Centre

n An assessment center can be used as a tool forcompetence development.

n The major competencies that are judged in assessment

centers are interpersonal skills, intellectual capability,planning and organizing capabilities, motivation,career orientation etc. assessment centers also aneffective way to determine the training anddevelopment needs of the targeted employees.



360360oo Appraisal SystemAppraisal System

nIt is a systematic collection and feedback of performanIt is a systematic collection and feedback of performan

data on an individual or group, derived from a number data on an individual or group, derived from a number

of stakeholdersof stakeholders

nData is gathered and fed back to the individualData is gathered and fed back to the individual

participant in a clear way designed to promoteparticipant in a clear way designed to promote

understanding, acceptance and ultimately behavior understanding, acceptance and ultimately behavior

n



540 Degree Appraisal540 Degree Appraisal

n General Electric Company, USA was the first to tryout this concept in early 1990s.

n Feedback from stakeholders – superiors,

subordinators, peers, internal and externalcustomers and suppliers

n In 540 degree feedback method customers andsuppliers also evaluate the performance to

differentiate from the 360 degree performanceappraisal.



Management by Objectives (MBO)Management by Objectives (MBO)

n MBO emphasizes collectively set goals that

are tangible, verifiable, and measurable

n Focuses attention on goals rather than on

methods

n Concentrates on Key Result Areas (KRA)

n Systematic and rational technique that

allows management to attain maximum

results from available resources by



Key Elem ent s Of M BOKey Elem ent s Of M BO

nArranging organizational goals in a means-ends chainArranging organizational goals in a means-ends chain

nEngaging in joint goal settingEngaging in joint goal setting

nThis process has the following steps:This process has the following steps:

n

Identify KRAsIdentify KRAsnDefine expected resultsDefine expected results

nAssign specific responsibilities toAssign specific responsibilities to

employeesemployees

nDefine authority and responsibilityDefine authority and responsibility

relationshiprelationship

nConducting periodic progress reviewConducting periodic progress review

n

Conducting annual performance reviewConducting annual performance review



Behaviorally Anchored RatingBehaviorally Anchored RatingScale (BARS)Scale (BARS)

Combination of rating scale and critical

incidence

n Steps:

n Collect critical incidents

n Identify performance dimensions

n Reclassification of incidents

n Assigning scale values to incidents

n

Producing the final instrument

tools for measuring performance

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