PERFORMANCE EVALUATION

Performance Evaluation 1

PERFORMANCE EVALUATION



JW Mariot – for Managers “Leadership

Performance Process”– setting business goals at the beginning of

year– mid year review of progress &

competencies – final review of achievement & competencies

For Staff - linear rating scales of attributres

by boss student project 2004

What is performance evaluation



• Formal Structured System

• Of measuring and evaluating

employee’s – Job– Related behaviours (includes competencies)– Outcomes (results)

• To discover how and why the employee is presently performing

Why – PE?


WHY PERFORMANCE EVALUATION?

• Performance / Behaviour Management /

Improvement

• Rewards????? Differing systems

• Confirmation / Promotion

• Training and Development

• Developing a Leadership Pipeline - Potential

assessment - career planning

• Communication/ Feedback / dialogue

Methods of PE


PERFORMANCE EVALUATION METHODS - Some Past oriented methods

• Graphic rating scale - with / without

weightages (problems in PE)

• Ranking - alternation ranking

- paired comparison

• Forced choice

• Critical incident method


PERFORMANCE EVALUATION METHODS - Past oriented methods

• Behaviourally anchored rating scale

• Essay method

• Performance tests

• Field review method

Companies find Past Oriented Methods inadequaate – PE at FEDEX

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PERFORMANCE MANAGEMENT at FEDEX

• goal for India in 2003 was ‘Introduce

packaging solutions for Indian Exporters’

• A solution called ‘Fedex Solutions for the

Fashion world’ was introduced

• Every member of the Marketing Managers

team (whose target it was) broke down the

objective into specific personal objectives in

four different waysSPEED at TCS


PERFORMANCE MANAGEMENT SYSTEMS - MBO (future oriented)

• Performance Agreement on Goals – SMART– End Result or Developmental (60/40)

– Dovetailed with organisation goals

• Action Plan

• Periodic Review – performance managed around the year

• Role of Superior – Party to agreement – + Facilitator– + Guide/coach


On Line Performance Management Systems…

SAP Labs India – managers keep defining

Objectives for employees – depending on

changes in project objectives – differences

sorted out through mutual discussion

ISPAT Industries has on line PMSS

TCS has SPEED

Syngyny Systems develops PM and Variable Pay

software solutions

Steps in PE


STEPS IN PERFORMANCE EVALUATION

1. Define job and job expectations

2. Design appraisal programme

3. Implement - Problems to be solved

4. Interpret data• Lack of standards – unrealistic standards• Poor measures of performance• Failure to apply evaluation data

Designing appraisal programme


DESIGNING THE APPRAISAL PROGRAMME

1. Who rates?

2. What is rated?

3. What method?

4. When is rating done?

Multiple sources


Multiple Sources of Feedback – 360 Degrees

1. Done systematically via interviews /

questionnaires

2. All important stakeholders

3. Formalises people’s judgment on the

basis of interactions

4. Data collected and feedback given

Why 360 degrees


Multiple Sources of Feedback – 360 DegreesWhy???

1. Perspective of all stakeholders - not

just the immediate superior.

2. Brings out strengths and weaknesses

in managerial style

3. Forces inflexible managers to change

Problems with 360 degree feedback


Limitations / Issues/ Problems with 360 Degrees Feedback

1. Can all stake holders always judge ? Ask for behaviour not evaluation

2. Can be detrimental to team-work???

3. Issue of confidentiality

4. Report must be prepared

5. Different forms for different assessors

An example

Is it needed every year???


360 Degrees Feedback- An Example

Example – from colleague assessment

Questionnaire All items numerically rated -very little to great deal

36. He makes decisions in the time they are needed

37. She publicly supports the actions and decisions of the team

38. By listening, he actively seeks to understand the needs, perspectives and motivations of others - even if these are different from his ownThe appraisal review


The Appraisal Review - Purpose

1. Measurement

2. Feedback

3. Positive Re-inforcement

4. Exchange of views

5. Agreement

Some guidelines

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The Appraisal Review - Some Guidelines

1. Create supportive atmosphere

2. Keep the whole year under review

3. Be sensitive to natural responses to criticism

• Anger / aggression

• Denial

• Retreating

4. Listen - be open to criticism

5. Test Understanding - Aim for agreementWhy PE fails


Why Performance Evaluation Fails

1. Supervisor plays judge and helper

2. Too many objectives cause confusion

3. Unresolved appraisal problems

4. Appraiser training

5. Appraisee not receptive

6. Unwillingness of supervisor to give feedback

7. Defensive behaviour - fault finding

8. Depends on purpose

Balanced Score Card


BALANCED SCORECARDIndian Management , August 2002

• A tool that helps Companies deploy

Strategy.

• Helps Companies describe their strategy

• Can be used for different reasons– Clarifying vision

– Validating strategy

– Aligning budgets to strategy

– Developing an enterprise Performance Mangement system

Company’s using it


BALANCED SCORECARDIndian Management , August 2002

Companies Using It

Tata Steel

Indian Hotels

TCS

RPG Group Companies


BALANCED SCORECARD Indian Management , August 2002

Offers a 4 layered perspective of the

state of strategy implementation down

the line


BALANCED SCORECARD –Indian Management , August 2002

Layer 1 - Financial Perspective

Financial expectations of the shareholders

that the strategy must meet.

ROCE - a key measure– New revenue sources– Customer profitability– Cost per unit– Asset utilisation

Customer perspective



Layer 2 – Customer Perspective

What are the customer expectations that

must be met in order for shareholder

expectations to be met.

– Price, quality

– Time, relations, brand

– Function, service

internal. Process perspective



Layer 3 - Internal Processes

Needed in the Company to deliver

customer value

– Innovation processes

– Customer management processes

– Operations and logistics processes

– Regulatory and environmental processes

Learning and growth



Layer 4 - Learning and Growth

What are the organisational competencies,

Skills that the Company must create to

have a motivated work force that will enable

Achievement of overall vision and strategic goals



Layer 4 - Learning and Growth

• Strategic competencies

• Strategic technologies

• Culture and climate for action


Rating Scales - Continuous Scale

0 5 10 15 20

No interest Careless Interested in Enthusiastic Joyous about in work Indifferent to work, accepts about job & work. His

instructions opinions co-workers advice soughtothers


Rating Scales

DISCONTINUOUS SCALE

• Unsatisfactory – is a liability and makes no contribution

• Fair - minimal, barely meets contribution

• Good - meets basic requirement for retention

• Superior - definitely above norm and basic requirement

• Exceptional - distinctly and definitely outstanding - far above expectation

Problems in PE


PROBLEMS IN PERFORMANCE EVALUATION (esp rating scales)

• Leniency

• Halo Effect

• Central Tendency

• Bias

• Primacy / Recency

• Spillover (previous years)

• Status of individual


Forced Choice Description Method

Force rater to choose from paired statements - not

clear which is ‘desirable’

1 a) Works hard

b) works fast

2. a)shows initiative

b) responsive to customers

3. a) produces poor quality

b) lacks good work habits


Critical Incident Method

Assumes that there are certain significant acts in each employee’s behaviour that make the difference

between success and failure.

Eg - Procurement Officer

• Discourtesy towards seller’s representative

• Helped buyer prepare difficult P.O.

• Failed to return important phone call

• Rejected an overpriced bid

• Discourtesy towards sellers representative


Behaviourally Anchored Rating Scales - Past oriented methods

• A series of 5-10 vertical scales

• One scale for each dimension of performance (now you’d call it a competency)

• Each dimension anchored by behaviours identified by critical incident method

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BARS for a Fireman – Dimension – Knowledge of Fire Characteristics

High 76 Finds fire when no one else can

Correctly assesses best point of entry

5 Understands type of smoke as indicator of type of fire

Understands basic hydraulicsAvg 4

3 Cannot identify type of fire from colour of flame

2 Cannot identify location of fire

Low 1 Will not change firefighting strategy in spite of flashbacks and other signs …

business world sept 1 2003 34

4 Types of Objectives at FEDEX

– Customer objectives

communicating this service to customers via e-mail

– Internal processes required

co-ordinating with Fedex Packaging and Design and development lab at Memphis

– Financial objectives

– Skills and competencies the employee needs

to acquire to meet these objectives

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2004 – Article on PE

Moksha Technologies, IT&T, Nucleus Software and Daksh eServices conduct additional quarterly assessments - different from traditional annual reviews because of

– shorter project cycles – continuous stress – Offers scope for mid course correction– People can’t keep personal

performance scorecard with annual system

– Business dynamics and goals may change during the year

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• vMoksha Technologies – quarterly goal-setting and performance

reviews under its variable pay programme– annual reviews focus on developmental needs

and overall performance.

• Aptech Training - appraisal system identifies the star performers, solid citizens, the problem child, and accordingly an action plan is drawn.

• NetBase Computing’s quarterly performance reviews are linked to the ‘Company Bonus Plan’. The rating here determines an individual’s eligibility for bonus.

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Techspan India - Individual Performance Development Review (IPDR), a six-monthly performance management initiative. • Individual Performance Review - directly

influences performance bonus payouts and increments

• Individual Development Review (IDR)- impacts career advancement

These are done sequentially The company also has a “Mini-IPR”, done mid-cycle, which serves as a “spot-check” for individuals and managers.

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Aptech Training - comprehensive Member Assessment System named “Oasis”, which includes objective assessment and subjective impression. “We have developed a tool comprising two stages, seven levels and sixteen attributes. With the help of this tool we can predict an employee’s ability to perform, potential to grow, adaptability to change and integrity,” says Ajay Oberoi, vice president-human resources, Aptech Training. “Besides Oasis, we also use the assessment centre for appraising high potential members for faster growth under our internal selection schemes.”

Documents

PERFORMANCE EVALUATION