Performance appraisal theory
- 1. Performance appraisal theory In this file, you can ref useful information about performance appraisal theory such as performance appraisal theory rates, small performance appraisal theory, performance appraisal theory calculator … If you need more assistant for performance appraisal theory, please leave your comment at the end of file. Other useful material for you: • performanceappraisal123.com/1125-free-performance-review-phrases • performanceappraisal123.com/free-28-performance-appraisal-forms • performanceappraisal123.com/free-ebook-11-methods-for-performance-appraisal I. Contents of getting performance appraisal theory ================== The equity theory, developed by John Stacey Adams, says that satisfaction is based on a person's perception of fairness. Applying this theory when conducting a company's performance appraisals involves balancing the assessment of an employee's contribution to his job with the compensation and other rewards associated with his success. In general, highly-paid and rewarded employees tend to be the most motivated to continue performing well on the job. Understanding Theory In the 1960s, John Stacey Adams, a behavioral psychologist, developed the equity theory. This theory describes the relationship between the perception of fairness and worker motivation. People typically value fair treatment. Successful entrepreneurs recognize this and structure their small-business workplace to reward people according to their contributions. They also recognize that people have needs. Other theories help explain how to understand these needs. Psychologist Abraham Maslow’s need-hierarchy theory, developed in the 1940s, states five levels of personal needs: physiological, safety, belonging, esteem and self-actualization. Business school professor Victor Vroom developed the expectancy theory in the 1960s, demonstrating that motivated employees produce more. Behaviorist B. F. Skinner also worked in the 1960s to understand how reinforcement works. He concluded that negative reinforcement leads to negative outcomes. Effective small-business managers can apply these observations to managing performance by motivating their employees through positive reinforcement and appraising them fairly on at least an annual basis. Setting Expectations
- 2. According to equity theory, an employee's perception of the fairness of his work's input and outcome influences his motivation. Effective performance management systems enable a small- business manager to clarify job responsibilities and expectations, develop an employee's capabilities, and align an employee's behavior to the company's strategic goals and values. An employee typically feels satisfied with the outcome of his effort, including his pay, when the compensation matches what he feels he puts into the job. If an employee perceives that others get more for doing less, he typically becomes less motivated to work hard. Managers create a productive work environment by communicating job requirements clearly and establishing fair and consistent performance objectives for all employees. Achieving Balance Effective small-business managers avoid underpaying and overpaying employees. They monitor performance and compensation regularly to achieve a productive balance. If cuts need to be made due to economic conditions, they distribute the decreases throughout the company. To remain motivated, employees typically need to be able to provide input to their performance plan, modify their goals if conditions change, and seek career development opportunities. Communicating Clearly It's not easy to make equitable decisions while supporting performance improvement. Managers typically evaluate their employees, calibrate ratings and decide on rewards. These rewards include pay increases, promotions, flexible work schedules or stock options. Justifying these decisions becomes the focus, rather than relaying constructive feedback that can enhance performance and foster career development. Successful small-business managers clearly communicate company goals and make sure employees understand their role in achieving business objectives. By recognizing the effort, loyalty, commitment, skill and enthusiasm that an exemplary employee displays, an effective manager acknowledges accomplishments, establishes trust and builds a productive workforce. A worker's sense of achievement tends to build loyalty and enables him to feel secure about his future with the company. ================== III. Performance appraisal methods
- 3. 1.Ranking Method The ranking system requires the rater 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 of Ranking Method i. Employees are ranked according to their performance levels. ii. It is easier to rank the best and the worst employee. Limitations of Ranking Method i. 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. ii. 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. iii. When a large number of employees are working, ranking of individuals become a difficult issue. iv. There is no systematic procedure for ranking individuals in the organization. The ranking system does not eliminate the possibility of snap judgements. 2. Rating Scale Rating scales consists of several numerical scales representing job related performance criterions such as dependability, initiative, output, attendance, attitude etc. Each scales ranges from excellent to poor. The total numerical scores are computed and final conclusions are derived. Advantages – Adaptability, easy to use, low cost, every type of job can be evaluated, large number of employees covered, no formal training required. Disadvantages – Rater’s biases
- 4. 3. Checklist method Under this method, checklist of statements of traits of employee in the form of Yes or No based questions is prepared. Here the rater only does the reporting or checking and HR department does the actual evaluation. Advantages – economy, ease of administration, limited training required, standardization. Disadvantages – Raters biases, use of improper weighs by HR, does not allow rater to give relative ratings 4. Critical Incidents Method The approach is focused on certain critical behaviors of employee that makes all the difference in the performance. Supervisors as and when they occur record such incidents. Advantages – Evaluations are based on actual job behaviors, ratings are supported by descriptions, feedback is easy, reduces recency biases, chances of subordinate improvement are high. Disadvantages – Negative incidents can be prioritized, forgetting incidents, overly close supervision; feedback may be too much and may appear to be punishment. 5. Essay Method
- 5. In this method the rater writes down the employee description in detail within a number of broad categories like, overall impression of performance, promoteability of employee, existing capabilities and qualifications of performing jobs, strengths and weaknesses and training needs of the employee. Advantage – It is extremely useful in filing information gaps about the employees that often occur in a better-structured checklist. Disadvantages – It its highly dependent upon the writing skills of rater and most of them are not good writers. They may get confused success depends on the memory power of raters. 6. Behaviorally Anchored Rating Scales statements of effective and ineffective behaviors determine the points. They are said to be behaviorally anchored. The rater is supposed to say, which behavior describes the employee performance. Advantages – helps overcome rating errors. Disadvantages – Suffers from distortions inherent in most rating techniques. III. Other topics related to Performance appraisal theory (pdf download) • Top 28 performance appraisal forms • performance appraisal comments • 11 performance appraisal methods • 25 performance appraisal examples • performance appraisal phrases • performance appraisal process • performance appraisal template • performance appraisal system • performance appraisal answers • performance appraisal questions • performance appraisal techniques • performance appraisal format • performance appraisal templates
- 6. • performance appraisal questionnaire • performance appraisal software • performance appraisal tools • performance appraisal interview • performance appraisal phrases examples • performance appraisal objectives • performance appraisal policy • performance appraisal letter • performance appraisal types • performance appraisal quotes • performance appraisal articles