Multiple-person Evaluation Techniques

The above discussed methods are used to evaluate employees one at a time. In this section, let us discuss some techniques of evaluating one employee in comparison to another. Three such frequently used methods in organisations are – ranking, paired comparison and forced distribution.
1. Ranking method: This is a relatively easy method of performance evaluation. Under this method, the ranking of an employee in a work group is done against that of another employee. The relative position of each employee is expressed in terms of his numerical rank. It may also be done by ranking a person on his job performance against another member of the competitive group. The quintessence of this method is that employees are ranked according to their relative levels of performance. While using this method, the evaluator is asked to rate employees from highest to lowest on some overall criterion. Though it is relatively easier to rank the best and
the worst employees, it is very difficult to rank the average employees. Generally,evaluators pick the top and bottom employees first and then select the next highest and next lowest and move towards the average (middle) employees. The longstanding limitations of this method are:
i. The ‘whole man’ is compared with another ‘whole man’ in this method. In practice, it is very difficult to compare individuals possessing varied behavioural traits.
ii. This method speaks only of the position where an employee stands in his group. It does not tell anything about how much better or how much worse an employee is when compared to another employee.
iii. When a large number of employees are working, ranking of individuals becomes a vexing issue.
iv. There is no systematic procedure for ranking individuals in the organisation. The ranking system does not eliminate the possibility of snap judgements. In order to overcome the above limitations, a paired comparison technique has been advanced by organisational scholars.
2. Paired comparison method: Ranking becomes more reliable and easier under the paired comparison method. Each worker is compared with all other employees in the group; for every trait, the worker is compared with all other employees. For instance, when there are five employees to be compared, then A’s performance is compared with that of B’s and decision is arrived at as to whose is better or worse. Next, B is also compared with all others. Since A is already compared with B, this time B is to be compared with only C, D and E. By this method, when there are five employees, fifteen decisions are made (comparisons). The number of decisions to be made can be determined with the help of the formulae n (n-2). Ranking the
employees by the paired comparison method may be illustrated as shown in the
Box 10.3. For several individual traits, paired comparisons are made, tabulated and then rank
is assigned to each worker. Though this method seems to be logical, it is not applicable when a group is large. When the group becomes too large, the number of comparisons to be made may become frighteningly excessive. For instance,
when n=100, comparisons to be made are 100 (100-2) = 100 (98) = 9800.
3. Forced distribution method: Under this system, the rater is asked to appraise the
employee according to a predetermined distribution scale. The rater’s bias is sought to be eliminated here because workers are not placed at a higher or lower end of the scale. Normally, the two criteria used here for rating are the job performance and promotability. Further, a five-point performance scale is used without any mention of descriptive statements. Workers are placed between the two extremes of ‘good’ and ‘bad’ performances. For instance, the workers of outstanding merit may be
placed at the top 10% of the scale. The rest may be placed as – 20% —good, 40%
—outstanding, 20% —fair and 10% —poor. To be specific, the forced distribution
method assumes that all top grade workers should go to the highest 10% grade; 20% employees should go to the next highest grade and so on. Apart from job performance as the criterion, another equally important factor in this method is promotability. Employees may be classified according to their promotional merits. The scale for this purpose may consist of three points – namely, quite likely promotional material, may/may not be promotional material and quite
unlikely promotional material. One strong positive point in favour of the forced distribution method is that by forcing the distribution according to predetermined percentages, the problem of making use of different raters with different scales is avoided. Further, this method
is appreciated on the ground that it tends to eliminate rater bias. The limitation of
using this method in salary administration however, is that it may result in low
morale, low productivity and high absenteeism. Employees who feel that they are
productive, but find themselves placed in a grade lower than expected feel frustrated
and exhibit, over a period of time, reluctance to work.
other methods of appraising performance include: Group Appraisal, Human Resource
Accounting, Assessment Centre, Field Review, etc. These are discussed in the
following sections:
4. Group appraisal: In this method, an employee is appraised by a group of appraisers. This group consists of the immediate supervisor of the employee, other supervisors who have close contact with the employee’s work, manager or head of the department and consultants. The head of the department or manager may be the Chairman of the group and the immediate supervisor may act as the Coordinator for the group activities. This group uses any one of multiple techniques discussed earlier. The immediate supervisor enlightens other members about the job characteristics, demands, standards of performance, etc. Then the group appraises the performance of the employee, compares the actual performance with standards, finds out the deviations, discusses the reasons therefor, suggests ways for improvement of performance, prepares an action plan, studies the need for change in the job analysis and standards and recommends changes, if necessary. This method eliminates ‘personal bias’ to a large extent, as performance is evaluated by multiple raters. But it is a very time consuming process.
5. Human resource accounting: HRA is a sophisticated way to measure (in financial Performance Appraisal terms) the effectiveness of personnel management activities and the use of people in an organisation. It is the process of accounting for people as an organisational resource. It tries to place a value on organisational human resources as assets and
not as expenses. The HRA process shows the investment the organisation makes in its people and how the value of these people changes over time. The acquisition cost of employees is compared to the replacement cost from time to time. The value of employees is increased by investments made by the company to improve the quality of its human resources such as training, development, and skills acquired by employees over a period of time through experience, etc. When qualified, competent people leave an organisation, the value of human assets goes down. In this method, employee performance is evaluated in terms of costs and contributions of employees. Human resource costs include expenditure incurred by the company
in hiring, training, compensating and developing people. The contributions of human resources is the money value of labour productivity. The cost of human resources may be taken as the standard. Employee performance can be measured in terms of employee contribution to the organisation. Employee performance can be taken as positive when contribution is more than the cost and performance can be viewed as negative if cost is more than contribution. Positive performance can be measured in terms of percentage of excess of employee contribution over the cost of employee. Similarly negative performance can be calculated in terms of percentage
of deficit in employee contribution compared to the cost of employee. These percentages can be ranked to ‘Zero Level’

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