Page 137 - DMGT406_HUMAN_RESOURCE_MANAGEMENT

Human Resource Management

Notes This system is highly secret and confidential. Ratings are easily manipulated because the
evaluation was linked to promotion.
9. Cost Accounting Approach: This method evaluates performance from the monetary returns
the employee yields to his or her organization. Performance of the employee is evaluated
based on the established relationship between the cost and the benefit.

10. Comparative Evaluation Approach: These are a collection of different methods that
compare one worker's performance with that of his/her co-workers. They are useful in
deciding merit-pay increases, promotions and organizational rewards. The usual
comparative forms are ranking method and the paired comparison method.

Self Assessment

State whether the following statements are true or false:

3. Subjective measures in performance appraisal are most desirable.
4. Performance appraisals can reduce bias.
5. Assessment centre technique is costly and time-consuming.
6. A key aspect of performance management is Performance measurement.
7. Employees should not be involved in performance planning.

8.3.2 Future-oriented Appraisal

Management by Objective

It was Peter F Drucker gave the concept of MBO way back in 1954 when his The Practice of
Management was first published. There are four steps:
In some organizations, superior and subordinates work together to establish goals. These goals
can then by used to evaluate employee performance.
It involves setting the performance standard for the subordinates in a previously arranged time
period. As subordinates perform, they know fairly well what there is to do, what has been done,
and what remains to be done.
The actual level of goal attainment is compared with the goals agreed upon. This step helps
determine possible training needs.
It involves establishing new goals and possibly, new strategies for goals not previously attained.
The process is repeated.

The disadvantage is that it is not applicable to all jobs in all organizations. Jobs with little or no
flexibility, such as assembly-line work, are not compatible with MBO.

Psychological Appraisal

The appraisal normally consists of in-depth interviews, psychological tests, discussions with
supervisors and a review of other evaluations. The psychologist then writes about employee's
intellectual, emotional, motivational and other- related characteristics that suggest individual
potential and may predict future performance. Since the quality of the appraisal depends largely
on the skills of the psychologists, some employees object to this type of evaluation, especially if
cross-cultural differences exists.

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