APPRAISAL AND REWARD SYSTEM Essays - , Term Papers

Remi Ann T. Culaban BSBM1B APPRAISAL AND REWARD SYSTEM Performance Appraisal A formal, structured system for measuring and evaluating members of an organization. It is a process in an organization whereby each employee is evaluated to determine how he or she is performing. Why do we need appraisals? 1. Administrative Purpose To recognize good performance and identify poor performance to ultimately decide for promotions, retentions and termination. 2. Developmental Purpose To provide feedback; identify strength and weaknesses, determine transfers and assignments and establish individual training needs. The DATA collected from the appraisals can be used to evaluate the effectiveness of the company's training and developmental programs . Training Succession Training - identifying and developing new leaders who can replace old leaders Off-site Training - outside the company training that can result to staff development The P rocess of Performance Appraisal 1. Establishment of performance standards 2. Mutually set measurable goals 3. Measure actual performance 4. Compare actual performance with standards 5. Discuss the appraisal with the employee 6. If necessary, initiate corrective action Methods of Performance Appraisal There are three dierent approaches which can be used for appraising employees: 1. Absolute standards; 2. Relative standards; 3. Objectives 1. Absolute Standards Under this approach, the subjects of appraisal are not compared with other persons. This approach consists of the following methods: the essay appraisal, the critical incident appraisal, the checklist, the adjective rating scale, forced choice, and behaviorally anchored rating scales. Essay Appraisal A performance appraisal method whereby an appraiser writes a narrative about the employee. The employee's strengths and weaknesses are described and recommendations for development are indicated. Critical Incident Appraisal A performance appraisal method which requires eective or ineective performance for each employee being appraised. These incidents are critical incidents. Checklist A performance appraisal method where in the evaluator uses a list of behavioral descriptions and checks o those behaviors that apply to the employee. Adjective Rating Scale A lso known as graphic rating scale, is a performance appraisal method that lists a number of traits and a range of performance for each. The traits listed are assumed to be necessary to successful job performance. Examples of traits are quality of work, job knowledge and dependability. Forced-choice Appraisal A type of performance appraisal in which the rater must choose between two or more specic statements about an employee's work behavior. The supervisor or others familiar with the rate e 's performance evaluate how applicable each statement is. Oftentimes, the statements are ranked from most to least descriptive. 2. Relative Standards This category of appraisal methods compare individuals against other individuals. The most popular in this category are: 1. Group order ranking 2. Individual ranking 3. Paired comparison Group order ranking A relative standard of performance characterized as placing employees into a particular classication such as top 'one-fth.'' Under this method, the evaluators are asked to rank the employees as follows: top 5 percent, second 5 percent, third 5 percent, and the like. Individual ranking Method requires the evaluator merely to list the employees in order from highest to lowest. This method does not show the dierence between the rst and second, or between the second and third. Paired Comparison A n appraisal method whereby subordinates are placed in all possible pair and the supervisor must choose which of the two in each pair is the better performer. 3. Objectives The third approach to appraisal makes use of objectives. This approach, also known as Management By Objectives (MBO) , is a process of joint goal setting between a supervisor and a subordinate. It is also a process of converting organizational objectives into individual objectives. REWARDS SYSTEM - Keeps the organization motivated to reach their goals.