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Choosing Performance Measurement Approach

There are five major approaches to measuring employee performance: comparative, attribute, quality, behavioral, and result. The comparative approach involves ranking employees against each other, the attribute approach rates employees on specific skills and qualities, the quality approach assesses customer satisfaction and process improvements, the behavioral approach focuses on how work is performed, and the result approach evaluates final outcomes. Each approach has advantages and disadvantages depending on the organization's goals and needs.

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2K views

Choosing Performance Measurement Approach

There are five major approaches to measuring employee performance: comparative, attribute, quality, behavioral, and result. The comparative approach involves ranking employees against each other, the attribute approach rates employees on specific skills and qualities, the quality approach assesses customer satisfaction and process improvements, the behavioral approach focuses on how work is performed, and the result approach evaluates final outcomes. Each approach has advantages and disadvantages depending on the organization's goals and needs.

Uploaded by

sreeya
Copyright
© Public Domain
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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 CHOOSING PERFORMANCE MEASUREMENT APPROACH

Measuring performance of employees is the backbone of any organization’s management.


Business owners usually measure employee performance by assessing how much contribution
the employee is making to the firm’s growth. This is conveyed to the employee at the time of
their performance appraisal.

Organizations can use different strategies and approaches for the purpose of measuring
performance of their employees. The five major approaches are:

Behavioural
approach

Comparative Result
approach approach
Performance
measurement
approaches

Attribute Quality
approach approach

Each of these approaches differs in characteristics and suitability. A firm can select any one or a
combination of these approaches on the basis of their business goals and management type.
1. Comparative approach of measuring performance

Comparative approach involves ranking an employee’s performance with respect to that of


others in the group. Individuals are ranked on the basis of highest to the lowest performer. There
are several techniques for comparative approach such as forced distribution technique, ranking
and paired comparison.

i) Forced Distribution technique: It involves ranking employees in groups.

For example: A group of top performers constituting 10%, a group of average performers
constituting 40%, another group of good performers constituting 40%. Finally, a group of low
performers constituting the remaining 10%.

This ensures reward for the top performers. Given proper training and guidance these top
performers can be promoted to higher managerial positions. While the poor performers are given
chance for further improvisation or dismissed, if their performance does not meet the standard
requirements. This will in turn causes new talent hire.

ii) Ranking technique: In this technique the employer ranks everyone from the highest performer
or the poorest performer (or best to worst) individually.

iii) Paired Comparison Technique: the organization compares one performer with the other and
assigns a score of 1 for the higher performer. The final performance score is the summation of all
the winning points.

Comparative approach is undertaken in case of firms with a small group of employees with
similar job profiles. Therefore, the disadvantage is that it is unsuitable in case of firms with a
large number of employees or a firm with different job profiles. Also, since the scale is based on
subjective judgment, there is a high chance of bias.

2. Attribute approach of measuring performance

In this system, the employees are rated on the basis of a specific set of parameters such as:

 Problem Solving Skills


 Teamwork, Communication
 Judgment, Creativity
 Innovation

i. Graphic Rating Scale: Entails rating the employee on a scale of 1 to 5 (lowest to highest) on a
given set of parameters.
ii. Mixed standard scale: Mixed rating scale is a more layered form of measurement. It is
developed by defining the relevant performance dimensions with statements representing good,
average and poor performance along each performance.

The major disadvantage with attribute approach of performance measurement is that of


subjectivity. In other words it may be heavily reliant on the nature of the evaluator. Another
limitation of this method is that it is accurate at identifying only the best and the worst
performers. However, the advantage of this method is its simplicity, because of which most
organisations go with it.

3. Quality approach of measuring performance

This approach focuses on improving customer satisfaction by reducing errors and achieving
continuous service improvisation. This approach takes into consideration both person and system
factors. Also employers take regular feedback on the personal and professional traits of the
employee from managers, peers and clients to resolve performance issues. The Quality Approach
mainly focuses on the use of Kaizen process in order to continuously improve the business
processes. Kaizen involves every employee and strongly encourages suggestions for
improvements, even if they are minor as long as improvements continue. Suggestions coming
from all levels of the workplace, from the assembly line to the CEO office, are examined and
implemented if useful. The advantages of this approach includes:

 Assessment of both employee and system


 Problem solving through teamwork
 Use of multiple sources to evaluate performance
 Involvement of both internal and external factors

4. Behavioural approach of measuring performance

This is one of the oldest performance measurement techniques. It focuses on the process or the
way the employee is doing his work. The way in which employee reacts and behaves in the
organization. For example - While dealing with an individual in work is he being supportive,
encouraging and trying to make good relation or when given task & assignments is he focused or
distracted. Also while completing his tasks is he being genuine or is he giving false promises to
his clients in order to sell the product.

Although the Behavioral approach is suitable for the reliability and accuracy, the major
drawback in this approach is the voluminous data that the managers have to remember.
Supervisors tend to remember only those behaviours that define closely to the performance scale
which leads to a biased rating.
5. Result approach of measuring performance

This approach is a simple and straight-forward concept, wherein organization rate employees on
the basis of employee performance results. It is very effective in motivating employees for
enhanced productivity and measuring the feedback. In this organizations rate employees on the
basis of employee performance results. This approach mainly focuses on the outcome or result
of employee’s work. The result is more important than the process by which the work is done.
The disadvantage in this is that performance is concluded only by seeing the final result, it
doesn’t matter how that result was achieved. For example- If a sales executive is fake promising
his clients to give some extra benefits in order to sell the products, this will be impacting the
organization in the future.

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