¨(a) MBO
(Management by Objective or Joint Target Setting) :
¨This method was propounded by Alfred Sloans and Donaldson Brown
in 1920s. However, it was further popularised by Peter Drucker in his book "The Practice of Management" in
1954.
¨According to George S. Odiorne, MBO can be described as "a process whereby the
superior and the immediate subordinate of an organisation jointly identify the common goals, define each
individual's major areas of responsibility in terms of results expected of him
and use these measures as guides for operating the unit and assessing the
contribution of each of its members."
¨In this method
emphasis is laid on stating objectives for Key Result Areas (KRAs) in Quantifiable
terms. For
example, in case of Research and Development department, objective is stated in
the following terms. i.e. to design a new product by 31st March, 2005.
¨MBO is used as a
performance appraisal technique, as it is easy to measure whether the stated
objectives have been achieved or not.
¨(b) BARS (Behaviourally
Anchored Rating Scale) :
¨In order to overcome
the problem of judgmental evaluation, this method was conceived by some organisations. This method
combines the benefits of Essay Method, Critical Incident and Rating scales.
¨In this method the
employee's behaviour and performance
dimensions are analysed and used for
evaluating the performance of the employee. The HR department is involved in
the process of preparing the BARS. Based on the Employee's performance and behaviour, employees are
anchored in different slots of good, average and poor. The rater is required to
give corresponding ratings to the employee.
¨(c) Assessment
Centres :
¨This method was used to appraise army officers in
Germany way back in 1930s. The concept was adapted from army to business arena
in 1960s. In India, the concept has been adopted by organisations such as Crompton
Greaves, Eicher, Hindustan Lever and
Modi Xerox recently.
¨This method is mainly used to evaluate executive and
supervisory potential. Here employees are taken to a place away from work and a
series of tests and exercises are administered. For example, assesses are asked
to participate in; in-basket exercise, simulations, group exercise and role
plays. Performance of the employee is evaluated in each of these tests and
feedback is provided to the ratee, in terms of strengths and weaknesses.
¨(d) 360o
Appraisal Method :
¨Where multiple raters are involved in evaluating
performance, the technique is called 360-degree appraisal.
¨The 360-degree technique is understood as systematic
collection of performance data on an individual or a, group derived from a
number of stakeholders—the stakeholders being the immediate, team members
customers peers and self.
¨In this method an employee's performance is evaluated by
his supervisor, subordinates, peers and customers (or an outside expert).
¨All these appraisers provide information or feedback by
completing a questionnaire designed for this purpose.
¨The 360-degree degree appraisal provides a broader
perspective about an employee’s performance.
In addition, the technique facilitates greater self-development of the
employee. It enables an employee to compare his evaluation about self with
perceptions of others. Though this method was developed to bring about a degree
of objectivity, it still suffers from subjectivity.
¨(e) Cost Accounting Method :
¨This method evaluates
an employee's performance in relation to the contribution of an employee in
monetary terms. Here the rater evaluates the employee in terms of cost of
retaining the employee and the benefits the organisation derives from him/her. The following factors are taken
into account in this method :
¨(1) Cost of training the employee.
¨(2) Quality of product or service rendered.
¨(3) Accidents, damages, errors, spoilage, wastages, etc.
¨(4) The time spent in appraising the employee.
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