Unit-5: human resource management lecture notes (Performance Evaluation and Control Process)

Unit-5: human resource management lecture notes (Performance Evaluation and Control Process) in International human resource management uploaded at P.R.Engineering college

Unit-5: human resource management lecture notes (Performance Evaluation and Control Process) in International human resource management at P.R.Engineering college uploaded by P.R.Engineering college Staff in lecturenotes.net

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INTRODUCTION

We believe that if the human resource manager is effective in doing what we have discussed this far, then performance of employees must meet organizational expectations. Can the organization rest in this belief? Perhaps, it would not be sensible to do so. This is because shortcomings may go unnoticed for too long. This can pose a threat to the survival of the organization. It is desirable for the organization to evaluate the employees’ performance periodically. For example, for some jobs the ideal time span would be a week, whereas, for some others it could be a year. Once this is decided, it must be intimated to all the employees. The terms of reference for the evaluation must also be communicated. The process of evaluation needs to be discussed in detail. The purpose is to remove any ambiguity. The employee must be involved in the evaluation process. This facilitates free and frank discussion. Both the employee and his evaluators are able to seek clarification in the grey areas in performance evaluation. This feedback helps in fixing realistic performance expectations for the next time period. When critically viewed, the performance evaluation, tests the criterion validity of the selection and development programs of the organization. An ideal reward system must ensure that reward allocation is based on the performance evaluation. Establishing such a linkage is quite essential for rewards to motivate employees. In this unit we shall try to understand more of these issues.

LEARNING OBJECTIVES

After learning this unit you must be able to:

• Define performance appraisal.
• Substantiate the need for performance appraisal.
• Explain the different approaches to evaluation.
• Understand the methods of evaluation.
• Appreciate the need for performance control.
• Know common reasons for grievances.
• Draw up a typical grievance procedure.
• Distinguish between the different redressal methods.
WHAT IS PERFORMANCE APPRAISAL?

The organization must achieve its goals. This depends on whether the individual employees are able to achieve their individual goals. Therefore, it is important to make a periodic evaluation of how successful each individual employee is in achieving his individual goals. Performance appraisals help to assess individual accomplishments. It is a very important role of the human resource manager.

There are three purposes served by a good performance appraisal process. Firstly is it is used as a basis for allocating rewards. Decisions about salary increases, promotions, and other rewards are the fallouts of the performance evaluation. Secondly, the appraisal could be used to identify areas where development is necessitated. It helps the evaluator to determine those individuals who lack the skill or knowledge to do a good job. Finally, the performance appraisal can also be used as a criterion to validate selection devices and training and development programs. For example a company may have introduced a new selection process. How can it determine if the process is able to differentiate between good and bad performers? It is possible if it is able to identify some standard of satisfactory performance in the selection. Abias-free, valid, and reliable performance appraisal system can help it establish such standards.

All most all organizations have a well-defined appraisal process in place. At the Hindustan Unilever Ltd. every employee is put through a thorough performance evaluation. The evaluation is linked to the reward system. At Satyam computers, performance assessment is two-dimensional. The two dimensions assessed are, ‘outcome’ and ‘asset building’. The performance Appraisal in Reliance Energy essentially involves recognition of employee performance, willingness to involve in continuous learning, and development of skills required to remain employable. HDFC Bank has introduced a novel scheme. Subordinates are asked to evaluate their boss on some dimensions. The dimensions are communication, direction, feedback, and empowerment. Almost all public sector organizations like ONGC, SAIL, IOC, NTPC, BHEL etc. have a yearly appraisal. The appraisal considers two components. The first, is an evaluation of the employee by the boss and the second, is a self-evaluation. The composite of these scores is considered to reflect the employee’s performance. Multinationals like Ford, Hyundai, Microsoft, Cisco,American Express and Grind lays, have performance evaluations that are directly linked to the rewards. There is uniformity of evaluation across all employees in the organization irrespective of the place of posting.

Let us take a look at a typical appraisal process.

THE APPRAISAL PROCESS

The stages in an appraisal process are shown in figure.5.1. It begins with the identification of performance standards. Normally, they are derived from the job analysis and the job description. The performance standards should be clear and objective. Only then will it be understood by the parties concerned. Objective standards are essential as it helps the evaluator to communicate it to the subordinate. Measurement of the performance against these standards becomes easy. It also gives credibility to the evaluation.

The Appraisal Process

After the performance standards are established, it is essential to communicate these expectations to the subordinate. The subordinate knows what he needs to do to be successful. This avoids ambiguity in performance standards. When these standards are communicated to the employee he can seek clarifications where required. Feed- back is also required from the subordinate to the manager. Feedback ensures that the information communicated serves the purpose for which the message is envisaged.

The third step in the appraisal process is to address issues in the measurement of performance. To determine the actual performance, it is essential to collect relevant information about it. Questions like, how are we to measure performance? What is to be measured? arise. These must be answered.

Information is obtained through primary and secondary sources. Data from the primary source is based on personal observation. The secondary source is based on reports. Reports may be oral, written or statistical reports. Each has its use. These may be used singly or in combination. A combination of sources improves the quality of data. The probability of getting reliable information is also better.

What is measured in the evaluation process is extremely important. If the manager selects the wrong criteria it can lead to negative consequences. Generally, managers tend to measure criteria that employees excel in. This is quite irrelevant and misleading too. Managers must exercise caution while identifying the relevant criteria. Otherwise, the entire process may serve no purpose.
 
The criteria chosen must measure performance. Managers often tend to measure something else. For example, if the salesman is informed that he would be evaluated on sales calls rather than sales made then the manager should do so.At the time of appraisal, the manager may observe a poor sales record. If the manager now decides to use this data to assess the salesman, it would be wrong. By doing this, the manager would be discounting the efforts put in by the salesman. It is unacceptable, as it would emotionally disturb the salesman. It is quite possible that this may have a negative impact on his future performance.

The fourth step in the appraisal process is, the comparison of actual performance of the employee with predetermined standards. Deviations between standard performance and actual performance may be observed. Sometimes the deviations may be positive while at other times they would be negative. The former are good for the organization and the latter are not.

The fifth step in the process is the discussion of the outcomes of the appraisal with the employee. Drawing up an accurate appraisal is a challenging task for most managers. More difficult is the task of getting the subordinate to accept a bad appraisal without conflicts. Appraisals that report performance lower than the employee’s perception usually create a lot of unpleasantness. This is because employees tend to overstate their performance. Such situations are tricky and need to be addressed carefully.

Performance appraisal is thus a very sensitive issue. This is because it questions the individual’s contribution and ability. The feedback from the manager directly influences subsequent performance. However, if the appraisal gives a positive feedback it is easily accepted by the subordinate. Ideally, there should be no embarrassment if appraisals are done in a constructive manner.

The last step in the appraisal process is the commencement of corrective action when necessary. Corrective action must address

Title:
Unit-5: human resource management lecture notes (Performance Evaluation and Control Process)

Subject:
International human resource management

Institute:
P.R.Engineering college

Unit-5: human resource management lecture notes (Performance Evaluation and Control Process)

Unit-5: human resource management lecture notes (Performance Evaluation and Control Process) in International human resource management uploaded at P.R.Engineering college

Summary / document preview text:

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