3. GENTLEMAN’S “THREE”
It is based on the HBS case study “Compensation and performance evaluation at
Arrow Eletronics” by Brian J.Hall and Carleen Madigan.
PERFORMANCE
APPRAISAL
4. PERFORMANCE APPRAISAL
According to Dessler, “Performance appraisal may be defined as
any procedure that involves
(1) Setting work standards,
(2) Assessing employee’s actual performance relative to these
standards; and
(3) Providing feedback to the employees with the aim of
motivating the person to eliminate performance deficiencies or to
continue to perform above par.”
11. GRADE INFLATION
OBJECTIVE : Decisions about postmerger personnel cuts
THE STATED GOAL : Place the best person in every position
PREVIOUSLY :
• Objective evaluation was given importance
• It would be wrong to simply pare away employee from the acquired
company and retain the veteran
• The executives had received powder-puff performance reviews for
years
NOW :
• HR department create a new system that would force manager to be
brutally honest
12. Seven performance dimensions, ranging from
“delivers results” to “builds internal
goodwill,” managers were asked to rate
employees on a five-point scale: “Significantly
below others” was a 1, “somewhat below
others” a 2, and so on up to “significantly
above others,” a 5.
13. RESULT
Everyone was above average
No one get a 2s or 1s
Average is 4.6
“But even the best-designed system can’t force
people to be honest without an incentive. I’ve just
generated an entire database of results I can’t use”
14. EVALUATION REDUX
“Performance reviews have very limited usefulness. Managers don’t
like to be honest. The best way to evaluate an employee is to look at his
unit’s P&L. If there’s no relevant P&L, you’re pretty much flying
blind.”
People give almost everyone the same grade, and distinctions become
impossible to make managers seemed to have given high marks to
people who were up for promotion anyway and low ratings to
employees they didn’t know well. In one case, a manager gave someone
all 1s. The employee, it turned out, had recently died.
Well-executed evaluations give a company the data it requires to
develop talent. Employees need to know what they’re doing well and
what they’re doing poorly so that they can improve.
People will just manufacture low grades for employees they don’t like
and fudge the rest.
18. Error of Central Tendency
A rating error in which all employees are rated about average.
Leniency or Strictness Error
A rating error in which the appraiser tends to give all employees
either unusually high or unusually low ratings.
Recency Error
A rating error in which appraisal is based largely on an
employee’s most recent behavior rather than on behavior
throughout the appraisal period.
Contrast Error
A rating error in which an employee’s evaluation is biased either
upward or downward because of comparison with another
employee just previously evaluated.
Similar-to-Me Error
An error in which an appraiser inflates the evaluation of an
employee because of a mutual personal connection.
19. METHODS
360 degree appraisal
Assessment Centre
Management by objectives
BARS
HRA
Balanced scorecard
20. 360 DEGREE APPRAISAL
This technique is understood as systematic collection of
performance data on an individual or group derived from a no.
of stake holders – The stake holders being the immediate
supervisor, team members, customers, peers and self.
It is also referred as multi source assessment or multi-rater
feedback.
21. MANAGEMENT BY OBJECTIVES
It is a process of collaborative goal setting by manager &
subordinate; the extent to which the goals are accomplished is a
major factor in evaluating and rewarding the subordinate’s
performance.
It is primarily a corporate performance system leads up to
individual efforts.
22. BARS :
BEHAVIOURALLY ANCHORED RATING
SCALES
It is a sophisticated rating method in which supervisors
construct rating scale associated with behavioural anchors.
It combines the benefits of critical incidence and graphic rating
scale by anchoring rating scale with specific behavioural
examples of good or poor performance.
23. BALANCED SCORE CARD
It is a way of measuring organizational, business unit or
department success, balancing long term and short term actions
& balancing different measures of success:
Financial
Customer
Internal Business Processes
Learning & Growth
It is a conceptual framework for translating an
organizations vision into a set of performance indicators
distributed among four perspectives
