Page 196 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Principles and Practices of Management

Notes Periodic evaluation of employees’ performances is done in terms of goals and if required, goals
may be revised. MBO also calls for superior-subordinate interaction and supportive role of the
supervisor (which includes counselling/coaching).
However, the MBO system lays more stress on tangible goals and hence, intangible goals like
morale, good interpersonal relations, commitment to the job etc, are often ignored. Moreover,
the MBO exercise requires too much time and money.

Assessment Centre Method

This method is to test candidates in a social situation by a number of assessors, using a variety
of criteria (which may be a paper pencil test, interviews, in-basket exercise, business game, role
playing incident or a leaderless discussion). The assessors or evaluators are drawn from
experienced executives, working at different levels of management. Under this method
performance of employees is evaluated both individually and collectively. This method is
useful in measuring interpersonal skills, organising and planning ability, creativity, resistance
to stress, work motivation, decision making power, etc.

Human Asset Accounting Method

This method attaches money estimates in the value of manpower of an organisation. The process
is somewhat like estimating the goodwill value and can be appraised by developing a procedure
to undertake periodic measurement of certain variables. Such variables are either categorized as
key or intervening variables. Key variables are policies and decisions of an organisation, its
leadership strategies, skills and behaviour of an employee, etc. Intervening variables are loyalties,
attitudes, motivations, interpersonal relations, communication and decision making. Measuring
such variables over several years, quantification of human assets is difficult for the obvious
problem in developing the accounting procedure. It is not a very popular method of performance
appraisal.
However, this system is more appropriately used for evaluating the collective performance of
an organisation, rather than individual appraisal of an employee. This method is useful for
organisational development, as it helps in identifying the changed areas more scientifically
than any other method. We have discussed this method in a separate chapter.

Behaviourally Anchored Rating Scales (BARS)

This method helps in measuring and improving job performance more accurately. For each
performance area, some standard statements are provided. These are then put on the scales in
BARS. While developing such BARS, group discussions are conducted to identify significant job
dimensions that need to be evaluated. BARS may be of different types for different job dimensions.
Normally BARS are presented vertically with scale points ranging from five to nine. Because of
its behavioural orientation, it is considered as the most useful technique of performance appraisal.
Moreover, this system provides opportunity to both appraisee and appraiser to interact and
participate in developing standards for each performance area. This system being time consuming
and painstaking, despite its advantages, organisations try to avoid it.

360 Degree Appraisals

This appraisal method is now largely in use throughout the world. It requires performance
feedback from all important stakeholders of the organisation, like, the ratee himself, his superiors,
peers, other team members, customers and suppliers. Apart from its effectiveness in reporting

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