Definition of Performance Evaluation, Counselling and Monitoring

Performance Evaluation

Dear learners, welcome to the important topic of the course. Performance evaluation is what we are going to see next. After discussing a lot of performance improvement methods, it is time to look on the important system that mirrors the result of the performance management system.

Performance evaluation is a part of performance management system. But, it gets more importance that implementation of all other supporting processes of the system. Performance evaluation is also called as job evaluation and more often called as performance appraisal system. Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. Performance appraisal is generally done in systematic ways which are as follows:

The supervisors measure the pay of employees and compare it with targets and plans.

The supervisor analyses the factors behind work performances of employees.

The employers are in position to guide the employees for a better performance.

The main objective of performance review for employees is to give them a feedback for their work, record their work to give them a few organizational rewards and to provide further development opportunities for their careers. These methods of employee performance evaluation are also useful to help them improve their performance through coaching and training sessions provided by the management of the organization. No matter what field it is, there are a few common assessment techniques followed by the management to improve the work experience of employees.

Objectives of Performance Appraisal

Performance Appraisal can be done with following objectives in mind:

To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.

To identify the strengths and weaknesses of employees to place right men on right job.

To maintain and assess the potential present in a person for further growth and development.

To provide a feedback to employees regarding their performance and related status.

To provide a feedback to employees regarding their performance and related status.

It serves as a basis for influencing working habits of the employees.

To review and retain the promotional and other training programmes.

Performance Appraisal Process

Performance Appraisal basically assess

The outcome of the job performance

Behaviour of the employee, which drives the employee to the performance

Characteristics of the employee.

The job result is the first assessment variable, usually measured for Quality (Effectiveness) and Quantity (Volume of output). The variables are measured for a given period of time, based on job records and superiors’ observation. The employee behaviour, related to the workplace and job are analysed and assessed to plan on the development side of the job. The characteristics of the employee often decide the behaviour and output. Hence, the system can be developed based on behaviour and Competency of the employee. Both the behaviour and competency are complimentary, can influence the other on positive side. A good behaviour, inclined towards learning and team work can be planned properly to develop the competency side. On the same way, a competent employee can be counselled and behaviourally modified to perform better.

The illustration below clearly explains the process of framing a system of performance appraisal.

Advantages of Performance Appraisal

It is said that performance appraisal is an investment for the company which can be justified by following advantages:

Promotion: Performance Appraisal helps the supervisors to chalkout the promotion programmes for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.

Compensation:  Performance  Appraisal  helps  in  chalking  out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance. Compensation packages which include bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority.

Employees Development: The systematic procedure of performanceappraisal helps the supervisors to frame training policies and programmes. It helps to analyse strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programmes.

Selection Validation: Performance Appraisal helps the supervisorsto understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard.

Communication: For an organization, effective communicationbetween employees and employers is very important. Through performance appraisal, communication can be sought for in the following ways:

Through performance appraisal, the employers can understand and accept skills of subordinates.

The subordinates can also understand and create a trust and confidence in superiors.

It also helps in maintaining cordial and congenial labour management relationship.

It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future.

Performance appraisal methods

As the HRM is growing wider, the new methods are introduced in all the areas of HRM. Performance evaluation methods are used in different names, different methods, modified according to the needs of the organisation. Let us see some of the methods here.

You would have studied the performance appraisal methods in detail in your II Semester of this course, under the title ‘Human Resource management’. Still, as we are specialising in Performance Management here, let us see the methods in short as quick reference. Along with that, templates of performance Appraisal forms are given under the methods. It is to give you a better view of real time application of these methods and to give you an in-depth knowledge, as you are moving up in your learning ladder!

Traditional Methods:

Ranking method

Paired comparison

Grading

Forced distribution method

Forced choice method

Checklist method

Critical incidents methods

Graphic scale method

Essay method

Field Review Method

New approaches

Management by objectives method

Behaviourally anchored rating scales (BARS)

Behavioural Observation Scales Method (BOS)

Assessment centres

360-degree appraisal

It need not be said that the fast changing field of HR is seeing sea changes in the area of performance appraisals also. The performance appraisal methods are trimmed and polished, go through inventions, re-inventions, innovations and renovations every day that it becomes a tough task to list them at any given point of time. But, it would be interesting to see the path with turns and to understand the reasons for turns.

So, here is a short overview of differences between the traditional methods and the new age methods.

Leadership:

The appraisal methods that are traditionally used are more often directional. The superiors are the central focus of evaluation. In Modern methods, the superiors role is that of a facilitator. He guides and mentors the evaluation system.

Frequency of evaluation:

In the traditional methods, the appraisal system was often seen as a time consuming, costly affair. Most cases have recorded the appraisal as a ritual than a systematic method. But, the modern systems understand the importance of appraisal in improvising the performance and hence the frequency is often planned with scientific reasons.

Evaluation system and paper work:

The formalities of filling up documents and forms are very high in the traditional systems whereas the modern methods are more flexible and easy. The modern methods focus on the results than the process. The process flow is framed in such a way that the time and cost are not wasted.

Individuality and team:

The traditional methods are more focused on the individual performance and individual evaluation. On the contrary, modern methods even do team and group appraisals. The importance of team performance is well understood in the modern methods.

Basic values:

The traditional methods are more control oriented and documentary type whereas modern methods are more systematic and problem solving. Modern methods lead to development by identifying the strength and weakness, and traditional methods looks deep into past performance and points out the mistakes.

Performance Appraisal methods can also be classified into two categories namely

Appraisal by Traits

Methods that are based upon the qualities and personal traits of the employee falls under this category. Performance appraisal trait methods are done by looking at the employees personality, abilities, aptitudes, skills, attitudes.

Appraisal by results

Methods that are based upon the results or outcome of the job assigned falls under the category of appraisal by results.

Now, let us see the appraisal methods

Ranking Method

The ranking system requires the superior (appraiser) to rank his subordinates on overall performance. This consists in simply putting a man in a rank order. Under this method, the ranking of an employee in a work group is done against that of another employee. The relative position of each employee is tested in terms of his numerical rank. It may also be done by ranking a person on his job performance against another member of the competitive group.

Advantages

Employees are ranked according to their performance levels.

It is easier to rank the best and the worst employee.

Limitations

The “whole man” is compared with another “whole man” in this method. In practice, it is very difficult to compare individuals possessing various individual traits.

This method speaks only of the position where an employee stands in his group. It does not test anything about how much better or how much worse an employee is when compared to another employee.

When a large number of employees are working, ranking of individuals become a difficult issue.
There is no systematic procedure for ranking individuals in the organization. The ranking system does not eliminate the possibility of snap judgements.

Paired Comparison method

In this method, an employee will be compared with other persons one by one. The person who is doing the appraisal compares two employees on various attributes and decides who is better in each attribute. At the end, the more number one gets against the others will be the final ranking for that employee.

Grading

In this method, employees are categorized based on their personality traits and performance characteristics. The grading categories may be like 1-5, A-E or very good to very bad, that is, the grading should indicate from the best to the worst. The appraiser will mark the grades for his employees.

Forced Distribution method

This is a ranking technique where superiors are required to allocate a certain percentage of rates to certain categories (e.g.: good, above average, average) or percentiles (e.g.: top 10 percent, bottom 20 percent etc). Both the number of categories and percentage of employees to be allotted to each category are a function of performance appraisal design and format. The workers of outstanding merit may be placed at top 10 percent of the scale, the rest may be placed as 20 % good, 40 % outstanding, 20 % fair and 10 % fair.

Advantages

This method tends to eliminate bias in rating

By forcing the distribution according to pre-determined percentages, the problem of making use of different appraisers with different scales is avoided.

Limitations

The limitation of using this method in salary administration, however, is that it may lead low morale, low productivity and high absenteeism.

Employees who feel that they are productive, but find themselves in lower grade (than expected) feel frustrated and exhibit over a period of time reluctance to work.

Forced Choice Method:

In this method, as the name suggest, the appraiser is forced to make a choice in the appraisal form. The choice may be like “true or false”, “yes or no”. series of statements are arranged in the blocks of two or more and gives the choice to the appraiser. After this the HR department does actual assessment.

The positive side of this method is the chance of making bias judgements is not possible. And the other side is that this method may give wrong results when the statements are not consciously framed. As this is based on forced choice, extra care is needed whole framing the statements.

Critical Incident techniques

Under this method, the manager prepares lists of statements of very effective and ineffective behaviour of an employee. These critical incidents or events represent the outstanding or poor behaviour of employees or the job. The manager maintains logs of each employee, whereby he periodically records critical incidents of the workers behaviour. At the end of the rating period, these recorded critical incidents are used in the evaluation of the worker’s performance. Example of a good critical incident of a Sales man in the counter is: March 15 - The sales man patiently attended to anaggressed customer’s complaint. He was very polite and prompt in attending the customer’s problem.

Advantages

This method provides an objective basis for conducting a thorough discussion of an employee’s performance.

Limitations

Negative incidents may be more noticeable than positive incidents.

The supervisors have a tendency to unload a series of complaints about the incidents during an annual performance review sessions.

It results in very close supervision which may not be liked by an employee.

The recording of incidents may be a chore for the manager concerned, who may be too busy or may forget to do it.

Checklists and Weighted Checklists Method

In this system, a large number of statements that describe a specific job are given. Each statement has a weight or scale value attached to it. While rating an employee the supervisor checks all those statements that most closely describe the behaviour of the individual under assessment.

The rating sheet is then scored by averaging the weights of all the statements checked by the appraiser. A checklist is constructed for each job by having persons who are quite familiar with the jobs. These statements are then categorized by the judges and weights are assigned to the statements in accordance with the value attached by the judges. This is most frequently used in evaluation of the employee’s performance in many organisations

Limitations

This method is very expensive and time consuming

Appraiser may be biased in distinguishing the positive and negative questions.

It becomes difficult for the manager to assemble, analyze and weigh a number of statements about the employee’s characteristics, contributions and behaviours.

Graphic scale method: Graphic rating scales has an evaluator toindicate the degree of performance in the scale. The scale will consists of the employees traits, behaviour or performance. The evaluator will mark the level of performance in the scale. Rating forms are composed of a number of scales, each relating to a certain attribute or performance related behaviour, like knowledge, skills, job responsibility, initiative, quality, timeliness etc. Scales may have the range of three to seven usually. If performance indicators are clearly defined and ambiguous undefined words and adjectives are avoided, this method would be a good tool to appraise the performance of employees.

Essay Method

This is a written report on the employee’s performance by the person who assess his work. Most often this method is used to justify the pay and promotion. The disadvantage of this method is that this is open ended and unstructured. There is no standard format and required a lot of time for the assessor to write pages on each employee.

Field Review Method:

This is an appraisal done by external agency or other department, which is usually HR department. The person who does the assessment has a definite set of questions and approaches for interviews with the field supervisors of the employees to be assessed. The feedback and information collected from the supervisors are noted in detail and analysed for a performance report.

Management by Objectives Method (MBO)

This is one of the best methods for the judgment of an employee's performance, where the managers and employees set a particular objective for employees and evaluate their performance periodically. After the goal is achieved, the employees are also rewarded according to the results. This performance appraisal method of Management by Objectives depends on accomplishing the goal rather than how it is accomplished.

Behaviourally Anchored Rating Scales (BARS)

The BARS method is used to describe a rating of the employee's performance which focuses on the specific behaviour as indicators of effective and ineffective performances. This method is usually a combination of two other methods like the rating scale and critical incident techniques of employee evaluation.

Behavioural Observation Scales Method (BOS)

It is defined as the frequency rating of critical incidents which the employee has performed over a specific duration of time in the organization. It was developed because methods like graphic rating scales and behaviourally anchored rating scales (BARS) depend on vague judgments made by the supervisors about employees.

Assessment Centres:

The central place where employees in the managerial, decision making and high productive cadres are called upon to assess their performance is calleda s assessment centres. Employees like this method the most often, because of the nature if unbiased and flexible techniques used. Simulated exercises, management games, presentations, social events and interviews are parts of the assessment activities in this method.

360 Degree Performance Appraisal Method

An appraisal made by top management, immediate superior, peers, subordinates, self and customers is called 360 Degree Appraisal. Here, the performance of the employee or manager is evaluated by six parties, including himself. So, he gets a feedback of his performance from everyone around him.

This method is very reliable because evaluation is done by many different parties. These parties are in the best position to evaluate the employee or manager because they are continuously interacting and working with him.

This method is mostly used to evaluate the performance of the employees. However, it is also used to evaluate other qualities such as talents, behaviour, values, ethical standards, tempers, loyalty, etc.

Balanced Score card

You would have studied about the philosophy of balanced score card developed by Robert S. Kaplan and David P. Norton to align the business activities to the vision and mission of the organisation. The four perspectives of this concept are Customers Perspective, Businessperspective, Learning perspective and financial perspective. But, itneed not be applied only on the organisational level but also to measure the employee performance in an effective way. Balance score card concepts give a method to look at the complete performance of the employee and not just a partial view.

Too often, employee performance plans with their elements and standards measure behaviors, actions, or processes without also measuring the results of employees' work. By measuring only behaviors or actions in employee performance plans, an organization might find that most of its employees are appraised as Outstanding when the organization as a whole has failed to meet its objectives. By using balanced measures at the organizational level, and by sharing the results with supervisors, teams, and employees, managers are providing the information needed to align employee performance plans with organizational goals. By balancing the measures used in employee performance plans, the performance picture becomes complete.

The ethics of performance appraisal

The major hue cry on the performance appraisal is often “biased appraisals by the appraising superior”. In some cases even the person who got a good remark and promotion based on the appraisal report has a feeling that whether the appraisal is properly done. How to understand or draw a line of which is right and where it goes wrong? MS Kellog suggests some do’s and dont’s to this regard.

Know the purpose of appraisal and why is I necessary

The information on which the appraisal is based upon should be representative, sufficient and relevant.

Honesty is very important for both assessee and the person who assess

Say what you do, and write what you say.

Don’t reveal the contents of your appraisal process to people who won’t need them and for those whom it is not necessary

Performance Counseling

In recent years the term ‘counseling’ has been widely used in management literature to the extent that some writers have suggested that ‘managers cannot avoid acting as counselors’. However, the term is used in a vague way and often this employee ‘counseling’ bears little relationship to psychotherapy or other forms of professional counseling.

Need for Performance Counseling

Managing poor performance is an unpleasant and difficult task and managers instead use disciplinary actions, or rather put up with poor performance than conduct a work performance improvement or disciplinary interview. This lack of desire to manage poor performance is of particular concern as there is evidence that work performance intervention may be the most effective and one of the most important management tasks.

If a manager is to manage performance decline, then performance must be explicitly defined. This requires the establishment of performance standards. Without established performance standards it is impossible to measure any decline. If over time the employee’s performance drops significantly from the established standards then, we have work performance decline. It is important to note that this performance decline is significant and could sustain.

All employees may have minor deviation in performance over time due to transient environmental factors, workload or scheduling. As well as established standards, it is equally important that deviations can be measured and observed. This requires properly trained managers and clearly defined and agreed procedures. Most importantly, it requires consistent Feedback, rewards when standards are achieved or surpassed, and sanctions when they are not met.

Correcting performance decline

What causes performance decline with a previously functioning employee? Work-related factors such as poorly defined goals, lack of training and lack of effective recognition can affect an employee’s work performance. Personal factors such as alcohol dependency, family problems or financial worries can cause employees to lower the quality of their work. Any diagnosis of the cause of performance decline brings with it the need for action. Appropriate corrective strategies include training, coaching, job design and various forms of employee ‘counseling’.

The management response to performance decline must address the underlying cause of the problem. If the cause is work-related, the solution lies within the domain of the manager. But what if this cause is a set of complex and private personal problems?

Most authors suggest some form of counseling as the appropriate strategy in these situations. If the manager discovers that the performance problem is caused by personal problems, they are still left with two major problems:

In many cases the actual causes of personal problems are extremely difficult to diagnose, even for skilled counselors

If a manager diagnoses the cause of a personal problem what are they supposed to do (treat, refer, ignore)? The solution to this dilemma lies in appropriate work performance intervention.

Appropriate intervention

Appropriate work performance intervention rests on the observational skills (of work performance decline) of managers but there is great danger in assuming that they are able or even willing to take on the counseling role. Their job should be to detect a work performance problem at the earliest time, determine if the cause is work related, and if not offer referral for assistance. This should happen only when two conditions are satisfied:

The problem must be affecting work performance

The employee must agree to accept assistance.

The manager should not become involved in private matters; their focus must remain on the work performance of the employee. Problems in an employee’s private life that do not affect their work performance are not the business of the employer There are then three essential requirements for a manager who wishes to conduct an appropriate work performance interview:

The manager should use interviewing techniques to establish if the problem is work related. For example, lack of standards or a lack of training. In these cases the manager should intervene directly. If the employee’s work performance problem is due to personal issues, the manager should keep the focus of their concern on the employee’s work performance only. It is important to offer all employees free, independent, professional, voluntary and confidential assistance. The manager must not attempt to ‘counsel’ the employee about personal problems under any circumstances.

Process of performance Counseling

Psychology based counseling would be performed better by the professional counselors. But still, the organisations can train the Middle level managers some methods of counseling. Here, we will see a simple model of counseling process.

Stage 1

Rapport building- Without the first stage the manager cannot move to the next stage. He needs to make the relationship amicable for the employee to easily approach him.

Stage 2

Exploration- Exploring the issues involved along with the person. This is a time consuming process, but still once the ice breaking is achieved, it would be easier to explore the problem areas with the employee.

Stage 3

Action Planning – Along with the employee, the manager can make an individual action plan for the employee, for a short period of time. Both of them can make a mutual agreement on monitoring the performance for that short duration. This will help to reinstate the confidence in the employee for performing up to the expected standards