Steps in Performance Appraisal Process

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Everything you need to know about the steps involved in performance appraisal process. Performance appraisal is the evaluation process, in which the information is gathered, recorded, measured and analysed relating to the performance of the employees.

A set of activities are arranged in a logical sequence to perform the task of evaluation. It includes the steps as establishment of performance standards, communication of performance standards and expectations, measurement of performance, comparison, appraisal feedback, corrective motivation and development action.

“Performance appraisal includes all formal procedures used to evaluate the personalities, contributions and potential of group member in an organisation. It is a continuous process to secure information required for making correct and objective decisions on the employees.” -Dale Yoder.

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The steps are involved in performance appraisal process are:-

1. Establish Performance Standards 2. Communicate the Standards 3. Measure Actual Performance 4. Compare Actual Performance with Standards 5. Feedback to the Employee 6. Taking Corrective Action.


Steps in Performance Appraisal Process: Step by Step Process

Steps in Performance Appraisal Process

Performance appraisal is planned, developed and implemented in the following manner:

Step # 1. Establish Performance Standards:

The performance standards for each and every job should be developed and discussed with the superiors after thorough analysis of the job. These standards should be clear and not vague. They must be measurable after certain period.

Step # 2. Communicate the Standards:

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After setting the performance standards of job, the next activity is to communicate these standards to all concerned; at least two parties – (a) appraiser (b) appraisee. It is necessary, these standards must be modified. The appraiser must ensure that the information communicated by him has been received by appraise and understood clearly.

As per opinion De Cenzo and Roabbins, “too many jobs have vague performance standards and the problem is compound when these standards are set in isolation and do not involve the employee.”

Step # 3. Measure Actual Performance:

Now the next activity is to measure actual performance of appraise on the job after certain period. Generally four common sources are used by appraiser to measure actual performance, personal observation, statistical reports, oral reports and written reports.

Step # 4. Compare Actual Performance with Standards:

The fourth activity is the comparison of actual performance with standards. Sometimes actual performance may be better than standards and sometimes it may go off the track. Any deviations between actual performance and standard performance may be observed carefully for next activity.

Step # 5. Feedback to the Employee:

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In this activity the results of stage forth are discussed with employee. The information which is received by appraisee about his assessment has a great impact on his performance. Communicating poor performance is difficult task of appraiser.

Step # 6. Taking Corrective Action, if Necessary:

This is the final or last activity of the performance appraisal process. In this stage two types of corrective action may be recommended by the appraiser. One is positive means of salary increase or promotion if actual performance of appraisee is up to the mark and second is negative means of coaching and counselling may be done if the performance is poor. If necessary appraisee may be deputed for formal training courses.


Steps in Performance Appraisal Process – Top 5 Steps Involved in Developing an Effective Performance Appraisal Program

For developing an effective performance appraisal program the following steps should be followed:

1. Determination of Purpose:

Before any performance appraisal programme is initiated, it is essential to determine its objectives. The objective of the appraisal programme may be either to appraise the actual performance of individuals on their present jobs or to determine the potential of individuals to do higher jobs or both.

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Sometimes performance appraisal programmes are associated with specific objectives like training and development, transfer and promotion, increase in pay, etc.

2. Establishing the Criteria of Performance Measurement:

Standards of performance should be set up to measure the performance of various individuals on their jobs. The standards of performance should be laid down in clear-out terms and put in writing. The subordinate should be made to understand the standards which are going to be used to measure their performance.

The criteria to be used for measurement of performance will vary from job to job.

Some of the criteria which are commonly used in industrial enterprises are:

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(i) Optimum utilization of available resources,

(ii) Productivity,

(iii) Reduction in cost,

(iv) Improvement in profitability,

(u) Realization of enterprise objectives, and

(vi) Improvement in quality of products and services.

3. Determination of Frequency of Appraisal:

In fact, performance appraisal is a continuous process for the supervisor. But in most of the organizations, formal appraisal programmes are implemented once or twice a year. The frequency of appraisals will be determined by the objectives of appraisal and the level of employees to be appraised.

4. Selection and Training of Appraiser:

Generally, the appraiser or the rater is the immediate superior of the person to be appraised because he is most familiar with the person concerned and his job. But there are certain limitations of appraisal by one person because of judgmental role of the appraiser.

The appraiser may be biased towards certain traits about which he himself does not know. In order to avoid subjectively in appraisal, it is advisable to give sufficient training to the appraiser. It is also suggested that the performance of one man should be appraised by two persons independently in order to have objective results.

5. Designing of Appropriate Forms:

Since the results of performance appraisal are to be used for many important decisions such as transfer, promotion, etc., it is essential to keep a record of performance appraisal. For this purpose, suitable forms should be prepared for appraisal of all types of employees such as clerical, supervisory, operative and managerial. The contents of the forms will be determined by the purpose of appraisal.

Pigors and Myers suggest several steps to develop and administer the programme effectively:

1. The HR department may attempt to obtain as much as possible the agreement of line management in respect of the needs and objective of the programme. A choice has to be made among different kinds of appraisal methods judiciously.

2. The HR department has to examine the plans of other organisations as well as the relevant literature in the field to formulate the most suitable plan for the appraisal programme.

3. Attempts should be made to obtain the co-operation of supervisors in division of the appraisal form and discuss with them the different factors to be incorporated, weights and points to be given to each factors, and description or instructions to be indicated on the form.

4. The HR or industrial relations manager tends to explain the purpose and nature of the programme to all the supervisors and subordinates to be involved and effected by it. Care should be taken to take into confidence the representation of the union, if it exists in the company.

5. Attempt is to be made to provide intensive training to all the supervisors with a view to obtaining unbiased and uniform appraisal of their subordinates.

6. Care should be taken to acquire line and staff co-ordination and mutual checking of appraisals with a view to achieving intra and inter departmental consistency and uniformity.

7. There should be an arrangement for periodic discussion of the appraisal by the superior with each of the subordinates where attempts may be made to stress good points, indicate difficulties and encourage improved performance. Explicitly, in this context, the discussion should be in the form of a progress review and every opportunity should be given to the subordinate to express himself, if he feels that the appraisal has been biased and that it should be otherwise.

8. As soon as the appraisal has been duly discussed, attempts may be made to recommend for salary increase or promotion, if their decision seem to be possible in the light of appraisals.

9. There should be provision for challenge and review of appraisals, if the employees or their union representatives are dissatisfied with the personnel decisions which the management has taken on the basis of these appraisals.

These steps, if followed carefully, are likely to help the superiors to evaluate their subordinates effectively.


Steps in Performance Appraisal Process – Discussed below

The steps involved in performance appraisal process are discussed below:

1. Determining Objectives:

Performance appraisal process begins with determination of objectives that the organization intends to achieve.

2. Establishing Performance Standard or Criteria:

The standards are set up in accordance with the objectives to be achieved, for appraising the performance of employees. Job performance standards describe the work requirements that are expected from an employee on a particular job.

These standards should be clear understandable and should be in measurable terms. If work performance cannot be measured in quantitative terms for instance, in case of a personal quality then it should be described clearly. The employee’s performances are judged against the standard set.

3. Communicating Standards:

The standard set must be communicated to the employees. This will help them to understand their roles and to know what exactly is expected from them. The standards should also be communicated to the appraisers or the evaluator’s .If there is any objection, it may be recorded and modified on the basis of feedback information obtained from evaluators and employees.

4. Measuring Performance – in this Stage Actual Performance of Employees is Measured:

The performance of employees is monitored throughout the year on continuous basis. This stage requires the careful selection of the appropriate techniques of measurement, taking care that personal bias does not creep into the process. There are different methods of performance appraisal. The most suitable one is selected.

5. Comparison with Actual Performance:

Actual performance and standards are compared in order to find out the deviations. The actual performance may be more than the desired performance or, the actual performance may be less than the desired performance.

6. Discussion:

The results of the appraisal must be communicated to the employees by the supervisor. The deviations and reasons for deviations are analyzed and discussed with the employees. The discussion are carried out on one to one basis with the employees to enable them understand the strength and weakness of his own.

7. Corrective Action:

If the result of performance appraisal discloses any negative deviation from standard then corrective actions is taken to improve the same. Coaching, training, counselling, etc., are conducted to improve the performance of employees.


Process of Performance Appraisal  – 6 Step Process for Appraising Performance of Employees

The performance appraisal is the evaluation process, in which the information is gathered, recorded, measured and analysed relating to the performance of the employees. A set of activities are arranged in a logical sequence to perform the task of evaluation. It includes the steps as establishment of performance standards, communication of performance standards and expectations, measurement of performance, comparison, appraisal feedback, corrective motivation and development action.

These steps are explained below:

Step-1 – Establishment of Performance Standards:

These should have evolved out of job analysis and the job description. The performance standards should be clear to achieve the objectives. Further it is required that these should be understood and measured. Management identifies and prioritizes the goals of the organisation. For accomplishment of the goals the jobs are to be performed.

Now, what level of performance is expected from the employees is to be discussed. For fixing the performance standard the comprehensive discussion should be there among managers, supervisors, employees, experts in-house and consultants.

The performance standard should be feasible to achieve. These should not be very low or high. The performance of slow, fast performer may not be suitable for everyone. That is why the average performance should be taken into account. Performance standards are the statements that specify what constitutes good work.

The all concerned persons involved in fixing performance standards develop the list of specific job tasks then they write statements that specify how the quality of the work will be determined. The performance standards should be specific, measurable, attainable, relevant and time-based.

The performance standards should be decided regarding the quality of work, quantity of output, with reference to the time taken, manners of work performed, method of doing the tasks, behaviour and costs involved in performing the jobs. These will give a clear idea to the supervisors and performers regarding what are expected from them on job.

Step-2 – Communication of Performance Standards and Expectations:

Once performance standards are established, it is necessary to communicate these expectations. It should not be a part of the employee’s job to guess what is expected of them. Unfortunately, too many jobs have vague performance standards. The problem is compounded when these standards are not communicated to the employee.

More transference of information from the manager to the subordinate regarding expectation is not communication. Timely and proper communication should be there between managers, supervisors and employees on jobs regarding the goals, expectation from employees, performance standards to be achieved, the jobs to be performed and methods of performing the jobs.

It should clearly explain these things so the clarity should be maintained. Communication takes place, effectively only when the transference of information takes place, is received, clearly understood by the subordinate and he provides the ‘feedback’ to his superior.

Step-3 – Measurement of Performance:

The third step in the appraisal process is the measurement of performance. To ascertain what actual performance is, necessary information about it should be obtained. One is concerned with how he measures and what he measures. There are four common sources of information frequently used by managers to measure actual performance; personal observation, statistical reports, oral reports and written reports.

Each has its strengths and weaknesses; however a combination of them increases both the number of input sources and the probability of receiving reliable information. It is the responsibility of the immediate manager or supervisor under whom the person is working.

The performance can be measured in quality, quantity, time, cost, difficulties faced, competencies expressed during work and initiatives taken for problem solution. Only the trained person can perform this task effectively. Otherwise the objective of the performance appraisal may be defeated.

Step-4 – Comparison of Actual Performance:

The fourth step in the appraisal process relates to the comparison of actual performance with standards. In first step the performance standards have been decided and in second stage the actual performance is measured.

Now in this step the actual performance is compared with the prefixed standards. The attempt in this step is to locate variations between standard performance and actual performance so that one can proceed to the next step in the process.

The deviations in quality, quantity, time, cost, competencies, behaviour, leadership, initiative, etc., can be identified. The slow and fast working persons can be identified through this comparison. If the comparison is not carried out then the goals and performance cannot be aligned to meet the planning requirements.

Step-5 – Appraisal Feedback:

In this step the information gathered relating to appraisal are analysed and discussed with the employee. The appraiser discuss with concerned employee regarding the strengths he has shown during the work. The place where he finds himself in a good position, the good performance he has given and the required competencies he has at present.

Focus is also given on the weak points of the workers and through discussion these areas are identified. Further, discuss the difficulties faced with the work due to him, machines, working procedure of any other reason. The ultimate goal of this is to improve the working of the employees as well as organisation.

Employees get feedback from the appraiser regarding the performance they have given their positive and negative points. Simultaneously, they get the counselling, coaching and suggestions for better working.

Step-6 – Corrective, Motivation and Development Action:

The last step in the appraisal process is the initiation of corrective, motivation and development action when necessary. Corrective action can be taken at the earliest to remove the cause of the problem. The performance may be poor due to workers, machines, working method, environmental, etc.

The immediate action will be initiated so that the problem can be corrected and it should not affect the performance adversely. Next, the actions will be taken to motivate the persons by identifying rewards, recognition, incentives, compensation and promotion. This will motivate as well as correct the behaviour of employees.

Finally, the management takes action for further education, training, improvement in working procedure and replacement of old technology. The ultimate goal of this stage is to remove the problems so that in present as well as in future the performance should not be affected.


Steps in Performance Appraisal Process – 6 Common Steps Involved in Performance Appraisal

Though steps are organization specific, some common steps involved in performance appraisal are as follows:

1. Establishment of performance expectation.

2. Communication of performance expectation to employees.

3. Measurement of actual performance.

4. Comparison of actuals with the standards.

5. Discussion of appraisal with the employees.

6. Initiation of corrective action.

1. Establishing Performance Standards:

The managers need to decide on what outputs, accomplishments and skills need to be evaluated. The standards should have evolved job analysis and job descriptions. They should be clear and expressed in unambiguous terms.

2. Communicating the Expected Standards:

Once the standards are established, they need to be communicated to the employees concerned. The transmission of standards should be ensured through feedback from employees on the basis of which standards may have to be modified, if necessary. In other words, communication of standards should be a two-way traffic.

3. Measuring the Actuals:

Actual performance is measured in terms of information collated from different sources like personal observation, statistical reports, performance records, oral reports, etc. Care is to be taken to see that rater’s bias does not enter into the evaluation process. Measurement should be purely facts and findings based.

4. Comparing the Actuals with the Standards:

Comparison may reveal the facts like over performance (extraordinary), under performance and near performance. Extraordinary performance needs acknowledgement through rewards and awards while under performance invites management attention to their weakness. This process leads the evaluator to the next step i.e., discussion with the appraisee.

5. Discussion with the Appraisee:

This is one of the most challenging tasks that the manager encounters in the appraisal process. Appraisal makes the appraisee know their strengths and weaknesses. The latter should be convinced of his weakness. Therefore, the report should be discussed in such a way so as to inspire the appraisee to overcome his weakness by availing himself of various facilities available in-house or outside the organization.

6. Initiating Corrective Action:

This is the final stage of appraisal process. In the light of report of performance appraisal, management spots out areas requiring corrections and measures warranted to set right those defects hindering achievement of standards. The corrective actions fall into two types namely, instant corrections and fundamental corrections. The former addresses the symptoms. It is also called fire-fighting measures. The latter addresses the causes of under-performance. Training, coaching, counselling, education and mentoring are all long-term remedies in this connection.


Steps in Performance Appraisal Process – 6 Step Process

The process of performance appraisal is explained as follows:

1. Establishing Performance Standards:

It constitutes the first step of the performance appraisal process. It involves setting up performance standards that are used to compare the actual performance of the employees with the desired performance. In addition, this step involves setting the criteria to judge whether or not the performance of the employees desirable.

The criteria set for evaluating the performance should be related to the job. For example, volume of sales may be a relevant evaluation criterion for a sales executive. The basis for evaluating the performance of employees is different in different enterprises. For instance, Pepsi Co uses volume growth and market share to calculate the incentives for senior-level employees.

The criteria for evaluation performance can be of three types, namely, trait based, behavior based, and performance based. Trait-based criteria assess the potential of employees in terms of attitude, creativity, initiative, and willingness to learn. Behavior-based criteria evaluate the desired behavioral patterns and soft skills of the employees.

In performance-based criteria, the enterprise divides the tasks into small projects and gives rating to individuals on the basis of their performance on each project. For example, HCL Technologies evaluates the performance of employees based on the performance-based criteria. Sometimes, enterprises use a combination of two or three criteria to evaluate an employee’s performance.

2. Communicating the Standards:

It refers to the second step of the performance appraisal process. This step takes place after identifying the expected level of performance in each job evaluation criterion. The expected level of performance, goals, and targets can be determined by performance standards set in the first step of the performance appraisal process.

For example, the performance standard set for a salesperson can be maximizing the sales volume. The enterprise should communicate these performance standards to the employees clearly, so that they can understand their roles and responsibilities. The performance standards should be SMART; that is, Specific, Measurable, Achievable, Realistic, and Time bound. They provide information to the employees about the expectations of the enterprise from them.

3. Determining the Person Responsible to Conduct the Appraisal:

It involves making a decision regarding the selection of the appraiser. Generally, the immediate superior of employees, who is familiar with the performance of employees, is considered the most suitable person to appraise them. Employees, during their tenure in the enterprise, communicate with their seniors, subordinates, colleagues, customers, and other individuals associated with the enterprise directly or indirectly.

Appraisal carried out by the superior is the traditional approach in which the immediate boss or reporting manager evaluates the performance of subordinates. In the self-appraisal system, employees are required to fill a performance appraisal form and provide information about their strengths, weaknesses, initiatives, and achievements in the enterprise.

After filling the performance appraisal form, employees are asked to appear for a performance appraisal interview with their superior. In some enterprises, the subordinates of an employee are asked to provide feedback about him/her. Peer appraisal is an appraisal done by an employee’s colleagues, who work at the same level of organizational hierarchy.

The main disadvantage of peer appraisal is that it can negatively impact the relationship between fellow workers, thus, leading to rivalry and jealousy. Sometimes, employees are evaluated on the basis of feedback received from the customers. Maruti Udyog Ltd. and AT&T are the enterprises that take feedback from customers about their employees.

360-degree appraisal refers to a combination of all the aforementioned sources for evaluating the performance of employees. In this appraisal, the performance of an employee is evaluated by taking feedback from all sources, such as employees, colleagues, superiors, team, and self. 360-degree appraisal is also known as multisource feedback. Wipro, Infosys, and Reliance Industries use this method for appraising their employees.

4. Measuring the Actual Performance:

It monitors the performance of employees for a specific period of time. It helps the enterprise to compare the actual performance of an employee against the pre-established standards, and identify the gaps in the employee’s performance. The enterprise provides training and guidance to the employees to improve their weak areas, if the performance is not as per the set standards. On the other hand, if the performance exceeds the standards, the employee may be awarded, promoted, or motivated by providing monetary or non­monetary incentives.

5. Communicating the Results of Appraisal to the Concerned Employee:

It involves discussing the result of the appraisal with the concerned employee. It is the responsibility of the reporting authority to communicate the result of the appraisal to the employees, provide positive feedback on their achievements, and specify the areas where they lack, and assist them in career management and personal development. This helps the employees to know their positive areas of contribution as well as rectify weak areas.

6. Taking Corrective Actions:

It refers to the last step of the performance appraisal process. In this step, decisions are made to improve the areas in which the employee lacks or take the corrective measures. The performance of employees can be improved by using various methods, such as coaching, guiding, counseling, and training.


Steps in Performance Appraisal Process Establishing Performance Standards, Communicating the Standards to Employees, Evaluating Actual Performance and a Few Others

Performance appraisal process involves a series of steps that are aimed to provide objective, balanced, and unbiased opinion about performance of employees.

These steps are:

1. Establishing performance standards

2. Communicating the standards to employees

3. Evaluating actual performance

4. Comparing actual performance with standards

5. Discussing the appraisal with employees

6. Taking corrective action, if necessary.

These steps are discussed below:

1. Establishing Performance Standards:

Performance standards, which reflect the performance dimensions also, form the basis for making appraisals. Job analysis and job description techniques can be used to determine the performance dimensions, so that all the critical elements of the job could be identified and deficiency and contamination can be avoided.

Deficiency occurs when important performance dimensions are omitted from the definition of a job. Contamination results when dimensions which are extraneous to the successful performance are included in the standards.

Nature of Performance Standards:

Performance standards should be clear, specific, and objective. They should be fair, realistic and attainable. Unrealistic and unattainable standards demotivate employees. Vague standards of performance like “a full day’s work” or “a good performance” do not clearly indicate what the jobholder is expected to achieve. The standards should, as far as possible, be expressed in qualitative and quantitative terms.

For example, quantitatively, standards may refer to targets for production or sales over a given period or the amount of time used in carrying out a job, and so on. Qualitatively, the standards may refer to the extent of accuracy and quality of work, ability to analyse data correctly or to evaluate customer complaints etc. (Cascio, Wayne, F, ibid).

Types of Performance Standards:

Performance standards may be classified as – (a) common performance standards, and (b) specific performance standards. Common performance standards are those that are applicable to almost all jobs.

These standards are used for measuring performance with reference to – (a) improvements in methods and procedures of work; (b) assigning responsibility and delegating authority; (c) ability to train, develop, and guide employees; and (d) behavioural dimensions and personality traits related to the performance of a job.

Specific performance standards are those that indicate what the specific job is, and how well and how much of it is to be performed and what are the duties and responsibilities expected to be discharged by the employee.

How to Develop Performance Standards?

Performance standards may be set on the basis of the knowledge of past performance taking care of critical performance dimensions and the areas that were found vague or that had led to conflicts.

Performance standards may also be evolved with the help of – (a) managers, (b) employees, (c) managers and employees working jointly, (d) groups or committees, (e) advisor (s) or consultant (s).

When a job is new, or the nature of an existing job has extensively been changed, or the Company or division has been reorganized, managers may evolve standards on the basis of their own knowledge and experience. These standards may be reviewed later to make them more realistic.

Employees may themselves be asked to set standards when a job is highly specialized and employees are also highly qualified. But in such a case, standards may not fully reflect all the important performance dimensions, and may also be either too tight or too loose.

A joint exercise by managers and employees has the merit of participatively establishing standards, which may have greater acceptability. But sometimes mutual bickerings may arise if managers and employees differ on any aspect of the job, and the standards may not be easily set.

Committees or groups may establish more precise standards because discussions among members may uncover critical elements of performance that may otherwise not be known easily.

Advisors and consultants who are familiar with the nature of the job may also help in establishing realistic and objective standards.

2. Communicating the Standards to Employees:

With a view to enabling employees to be aware of what is expected of them, performance standards are communicated to them. This communication must be complete and effective and managers should obtain feedback from employees to ensure that they have properly understood the performance requirements. Similarly, raters should also be aware of these standards so that they know what is to be evaluated.

3. Evaluating Actual Performance:

Common sources for collecting information about actual performance are – personal observation, written reports, oral reports, and statistical reports. ‘What’ is evaluated is, however, more important than ‘how’ it is evaluated (DeCenzo, David A., and Robbins Stephens, P. ibid).

People generally attempt to excel at those criteria that are evaluated. Therefore, actual performance should be evaluated with reference to performance criteria included in the standards and communicated to employees.

4. Comparing Actual Performance with Standards:

Some variation or deviation from standards can be expected in any activity. It is, however, important to know the extent of the variation between the standards and the actual performance, and the real causes of this variation.

5. Discussing the Appraisal with Employees:

Post-appraisal discussions are aimed to improve employee performance and productivity. Therefore, managers have the challenging task of presenting an accurate appraisal to employees and have them accept it in a constructive manner.

The information that employees receive about their performance during these discussions has a great impact on their self-esteem and subsequent work and conduct. Adequate preparation should, therefore, be made so that discussion takes place in an environment of mutual trust.

We all know that no two people are alike. Each one of us comes from a certain background (educational, social and economic), has different experiences, and develops certain personality traits.

Therefore, managers may well keep the following points in view during performance appraisal discussion:

(a) No One is Perfect:

No human being is perfect. Every one of us has some weaknesses and inadequacies, which may be physical, emotional, or mental. Since these are part of us, it requires a tremendous amount of will-power to change them. We may easily describe weaknesses in others because we think that we are objective, and expect that others will appreciate our viewpoint.

But so would others. Therefore, in all fairness, managers should not be unduly harsh on employees who display some weaknesses or inadequacies, but, instead, should try to convince them of their shortcomings and guide them to improve themselves.

(b) We do not See Ourselves as Others Do:

It is truism to say that “we do not see ourselves as others do.” It is unlikely that employees will appraise themselves in the same way as managers appraise them. Managers may find their employees good at some jobs but not at others. But employees may think that they have always been performing to the best of their ability and that their managers are not appreciative of their efforts.

Therefore, managers should try to convince their employees that there is no bias in their evaluations. Though employees may not always agree with their appraisals, at the end of the counselling session they should have a better understanding of how they have been evaluated.

(c) Need to Understand and Appreciate Employees’ Viewpoint:

It is not enough that managers are fair and objective in their evaluation; they should also be able to understand and appreciate employees’ viewpoint. They must have empathy with their employees, and understand the tatter’s hopes, fears and ambitions. This will help to create an atmosphere in which employees will accept their evaluation, and feel encouraged to make changes or improvements in their performance.

(d) Making Employees Accept the Benefit of Counselling:

Managers deal with human beings, and not with machines or other inanimate objects. They must, therefore, counsel slowly and carefully. The effort to change has to come from within the employees; managers can only point the way in this direction.

They must attempt to convince employees of the change at a pace that employees are willing and able to follow. In the end, employees should feel convinced that counselling has been for their benefit and they alone stand to gain the most from it.

6. Taking Corrective Action:

After comparing actual performance with standards, discovering the real causes for sub-standard performance, and discussion with employees, managers can take any one of the following courses of action:

i. Do nothing

ii. Remove the real cause for variation

iii. Revise the standards.

If the actual performance is according to the standard, or if the variation is within an acceptable range, no further action may be called for. A watch may, however, be kept to ensure that performance remains within the acceptable range.

If the variation is small but is of a serious nature, or if it is significant and the standard itself does not call for any revision, either immediate corrective action or basic corrective action may be taken. Immediate corrective action, which is also called “putting out fires”, deals with symptoms, and seeks to correct the variation immediately without caring for removing its root causes.

On the other hand, basic corrective action aims at removing the root causes of variation, so that the problem does not recur.

If the variation is because of unrealistic standard, which is either too high or too low, the standard itself may be revised. If employees could achieve the standard in the past but could not achieve it now, the assignable reasons for poor performance need to be found out. Do they feel that non-performance is rewarding? Are they nearing retirement and are only marking time? Are there any other factors that demotivate them?

If, in spite of being given all reasonable opportunity to improve, employees repeatedly perform below standard, and they are unlikely to improve their performance, they may have to be demoted, or even dismissed.


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